| Mon 31 Aug 2009, 14:30 | | GBG - Great Basin Gold Obtains Credit Approval for Burnstone Project Finance |
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GBG
GBG
GBG - Great Basin Gold Obtains Credit Approval for Burnstone Project Finance
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 OBTAINS CREDIT APPROVAL FOR BURNSTONE PROJECT FINANCE
August 31, 2009, Vancouver, BC - Great Basin Gold Ltd, ("Great Basin" or the
"Company"), (TSX: GBG; NYSE Amex: GBG; JSE: GBG) today announced that it has
obtained Credit approval thereby securing the finance facility for its 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 be utilized for potential cost overruns.
The facilities are subject to the execution of suitable loan and security
documentation, and include conditions precedent usual for facilities of this
nature. The Company does not plan to draw down on this facility until the end
of 2009.
The facility will be provided by Investec Bank Limited, Nedbank Capital, ABSA
Capital (a division of Absa Bank Limited) and the Development Bank of Southern
Africa ("the Lenders") and will have a maximum term of 7 years with interest
repayment commencing December 30, 2010 and capital repayment commencing on June
30, 2011. The senior debt facility carries interest at the Johannesburg
Interbank Agreed Rate ("JIBAR") plus a margin of 5% pre-completion and JIBAR
plus a margin of 4.5% post completion.
A hedging structure customary for facilities of this nature is required by the
Lenders and a participation collar hedge for an estimated 285,000 ounces
(approximately 20% of production over the repayment term) has been agreed upon.
This structure retains the objective of a zero-cost-collar by eliminating
upfront or downstream finance cost to the Company. The Company has retained the
option to early settle the hedge structure as well as to restructure the hedge,
to the satisfaction of the hedge providers, thereby allowing the Company
increased upside participation for rising gold prices. The hedge structure will
be ZAR denominated with pricing of the structure to be determined prior to the
first draw down of the facilities.
The Company is required to contribute equity amounting to approximately 55% of
the total Burnstone Project cost and deposit ZAR180 million (US$23 million) in
standby equity, to be allocated to potential cost overruns, into an escrow
account under the control of the Lenders prior to first draw down. The Company
will also repay the existing ZAR200 million (US$25 million) loan facility, as
well as accrued interest of approximately ZAR30 million (US$4 million), advanced
by Investec Bank Limited in July 2008 for purposes of the Burnstone Project. The
project finance facility will be secured by the assets of the Burnstone Project,
with a completion guarantee to be put in place from the Company.
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 in the second half of 2009. The current Project schedule
indicates end of June 2010 as the date for mill commissioning and first revenue
to be generated in the subsequent months.
Ferdi Dippenaar, CEO and President commented; "Although the current financial
market volatility has had a significant impact on the process to obtain final
approval for the project funding facility, we are delighted that this facility
has now been secured. A major risk in completing this low cost, long life
project with a Life of Mine production of some 4.1 million ounces has now been
negated. We are making good progress with the delivery of the project with the
development of the vertical shaft and metallurgical plant on schedule for
completion by June 2010. To date, approximately 11,000 ore tonnes have been
placed on the surface stockpile which will be used for the commissioning of the
metallurgical plant. 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."
For additional details on Great Basin 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.
Cautionary and Forward Looking Statement Information
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 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, 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: 31/08/2009 14:30:01 Produced by the JSE SENS Department.
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