| Wed 10 Jun 2009, 14:30 | | GBG - Great Basin Gold Announces Progress on Burnstone Project Funding |
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GBG
GBG
GBG - Great Basin Gold Announces Progress on Burnstone Project Funding
GREAT BASIN GOLD LIMITED
(Incorporated in Canada and registered as an External Company in South Africa)
(Registration No. 2006/021304/10)
Share Code: GBG & ISIN Number: CA3901241057
("Great Basin Gold" or "the Company")
GREAT BASIN GOLD ANNOUNCES PROGRESS ON BURNSTONE PROJECT FUNDING
June 10, 2009, Vancouver, BC - Great Basin Gold Ltd. (TSX: GBG; NYSE Amex: GBG;
JSE: GBG) today announced that it has granted a mandate to Investec Bank Limited
("Investec") for the arranging of project funding for the Company`s Burnstone
project in South Africa. The facility consists of a ZAR850 million (US$106
million) senior debt facility and a ZAR180 million (US$23 million) standby debt
facility to cover potential cost overruns. Significant progress has been made in
the finalization of a syndicate of banks for this purpose, with final credit
approvals already obtained by some of the envisaged participants and in-
principle approvals by the other potential syndicate members.
The facility will have a maximum term of 7 years with capital and interest
repayment commencing June 30, 2011. Interest rates are linked to the
Johannesburg inter banking borrowing rate ("JIBAR") with a premium of 4.5% above
JIBAR post completion and a 5% premium prior to completion.
The Company will enter into a fence structure (zero cost collar) for
approximately 300,000 gold ounces (being approximately 20% of Burnstone`s
production during the loan term) with lenders to provide a cost effective
hedging structure required by the facilities.
The Company is required to contribute equity amounting to approximately 55% of
the total Burnstone project cost. The estimated required equity contribution by
the Company (based on the current project plan) amounts to ZAR1,075 million
(US$134 million) of which ZAR560 million (US$70 million) has been spent to March
31, 2009. The Company is required to deposit ZAR180 million (US$23 million) into
a standby equity account under the control of the lenders with these funds to be
allocated towards cost overruns prior to draw down on the standby debt facility.
The Company will also repay the existing ZAR200 million loan facility, as well
as accrued interest of approximately ZAR20 million, advanced by Investec in July
2008, for purposes of the Burnstone project. The senior debt facility will be
secured by the assets of the Burnstone project, with a completion guarantee to
be put in place by the Company.
The facilities are subject to the completion of suitable loan and security
documentation, and include conditions precedent usual for project funding of
this nature. These conditions precedent include completion of technical and
legal due diligence, and an updated and agreed financial model. Technical and
legal due diligence is well advanced and it is envisaged that the loan
documentation will be concluded prior to June 30, 2009.
Development of the Burnstone project is well underway with multiple access
points to the mining blocks currently being established to allow for the build
up in reef tonnage available for production in the second half of 2009. The
current project schedule indicates June 30, 2010 as the date for mill
commissioning and first revenue to be generated in the subsequent months.
Ferdi Dippenaar, President and CEO, commented; "Although the current financial
market volatility has had a significant impact on the process to obtain approval
for the project funding facility, the returns from the Burnstone project remains
extremely positive under the current market conditions. The Burnstone project
has been subjected to significant scrutiny by the lenders during their approval
process and the Project came out strong on every occasion. This is also
testament to the economic robustness of the Project."
Ferdi Dippenaar
President and CEO
For additional details on Great Basin Gold Ltd. and its gold properties, please
visit the Company`s website at www.grtbasin.com or contact Investor Services:
Tsholo Serunye in South Africa 27 (0)11 301 1800
Michael Curlook in North America 1 888 633 9332
Barbara Cano at Breakstone Group in the USA (646) 452-2334
No regulatory authority has approved or disapproved the information contained in
this news release.
This release includes certain statements that may be deemed "forward-looking
statements". All statements in this release, other than statements of historical
facts, that address possible future commercial production, reserve potential,
exploration drilling results, development, feasibility or exploitation
activities and events or developments that Great Basin Gold expects to occur are
forward-looking statements. Although the Company believes the expectations
expressed in such forward-looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance and actual
results or developments may differ materially from those in the forward-looking
statements. Factors that could cause actual results to differ materially from
those in forward-looking statements include market prices, exploitation and
exploration successes, continuity of mineralization, uncertainties related to
the ability to obtain necessary permits, licenses and title and delays due to
third party opposition, geopolitical uncertainty, changes in government policies
regarding mining and natural resource exploration and exploitation, and
continued availability of capital and financing, and general economic, market or
business conditions. Investors are cautioned that any such statements are not
guarantees of future performance and those actual results or developments may
differ materially from those projected in the forward-looking statements. For
more information on the Company, Investors should review the Company`s annual
Form 40-F filing with the United States Securities and Exchange Commission and
its home jurisdiction filings that are available at www.sedar.com.
Date: 10/06/2009 14:30:03 Produced by the JSE SENS Department.
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