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GBG
GBG
GBG - Great Basin - Unaudited Interim Consolidated Financial Statements For
The Quarter And Nine Months Ended September 30, 2009
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" or "the Company")
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER AND NINE
MONTHS ENDED SEPTEMBER 30, 2009
CONSOLIDATED BALANCE SHEETS
(Expressed in Canadian Dollars)
September 30 December 31
2009 2008
$ $
Assets
Current assets
Cash and cash equivalents 55,938,369 33,549,118
Amounts receivable 2,299,628 4,940,950
Inventory 13,835,065 8,246,093
Due from related parties - 23,174
Other assets 6,781,363 6,846,767
78,854,425 53,606,102
Property, plant and equipment 152,861,415 48,849,185
Reclamation deposits 4,483,835 2,886,539
Mineral property interests 254,647,546 259,858,656
TOTAL ASSETS 490,847,221 365,200,482
Liabilities and Shareholders`
Equity
Current liabilities
Accounts payable and accrued
liabilities 24,345,112 26,276,562
Due to related parties - 252,854
Current portion of long term
borrowings 2,978,744 916,745
27,323,856 27,446,161
Long-term borrowings 69,761,294 62,060,594
Future income taxes 13,270,560 14,747,392
Site reclamation obligations 3,495,286 3,738,380
86,527,140 80,546,366
Shareholders` equity
Share capital 566,617,162 428,656,646
Warrants 13,103,653 24,005,896
Contributed surplus 47,823,151 21,599,521
Deficit (257,348,192) (217,267,111)
Accumulated other comprehensive
income 6,800,451 213,003
376,996,225 257,207,955
TOTAL LIABILITIES AND SHAREHOLDERS`
EQUITY 490,847,221 365,200,482
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the three months ended September 30, 2009 and September 30, 2008
(Expressed in Canadian Dollars)
Three months ended September
30
2009 2008
$ $
(Expenses) income
Exploration expenses (3,532,014) (10,694,189)
Pre-development expenses (8,443,224) (17,862,731)
Accretion of reclamation obligation 15,106 (17,647)
Conference and travel (253,153) (499,238)
Environmental impact study (191,293) -
Foreign exchange gain 1,449,386 352,565
Legal, accounting, and audit (434,780) (300,764)
Loss on disposal of assets (8,706) -
Office and administration (1,324,109) (1,960,038)
Other income 60,616 174,809
Salaries and compensation
Salaries and wages (2,034,433) (1,291,775)
Stock-based compensation (437,125) (2,430,059)
Shareholder communications (91,247) (146,141)
Trust and filing (78,532) (68,135)
Loss before the undernoted and (15,303,508) (34,743,343)
income taxes
Interest expense (27,683) (260,106)
Interest income 540,566 328,341
Unrealized loss on held-for-trading (2,223,880) (130,040)
financial instruments
Loss before income taxes (17,014,505) (34,805,148)
Taxes (381,363) -
Future income tax recovery 1,013,393 3,676,161
Loss for the period (16,382,475) (31,128,987)
Other comprehensive income
Unrealized gain(loss)on available- 633,062 (485,350)
for-sale financial instruments
Unrealized loss on foreign exchange (5,965,896) (3,045,922)
translation of self-sustaining
foreign operations
Other comprehensive loss (5,332,834) (3,531,272)
(21,715,309) (34,660,259)
Total comprehensive loss for the
period
Basic and diluted loss per share (0.05) (0.15)
Weighted average number of common 333,530,901
shares outstanding 214,345,476
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the nine months ended September 30, 2009 and September 30, 2008
(Expressed in Canadian Dollars)
Nine months ended September
30
2009 2008
$ $
Revenue 33,737,518 7,889,614
(Expenses) income
Production cost (19,391,374) (3,890,532)
Depletion (3,178,627) -
Exploration expenses (11,899,214) (20,437,332)
Pre-development expenses (22,139,216) (53,812,664)
Accretion of reclamation obligation - (52,113)
Conference and travel (1,113,771) (1,310,160)
Corporate social responsibility (1,111,215) -
Environmental impact study (551,178) -
Foreign exchange gain (loss) 1,810,406 (1,881,438)
Legal, accounting, and audit (754,545) (900,104)
Loss on disposal of assets (8,706) -
Office and administration (3,711,009) (5,480,809)
Other income 135,324 249,708
Salaries and compensation
Salaries and wages (4,951,834) (3,526,700)
Stock-based compensation (7,337,504) (7,587,633)
Shareholder communications (380,584) (435,025)
Trust and filing (325,128) (484,562)
Loss before the undernoted and (41,170,657) (91,659,750)
income taxes
Interest expense (145,887) (260,106)
Interest income 2,475,405 2,121,352
Loss from associate - (351,446)
Mineral properties written off (154,065) -
Unrealized loss on held-for-trading (2,061,692) (502,775)
financial instruments
Loss before income taxes (41,056,896) (90,652,725)
Taxes (749,340) -
Future income tax recovery 1,725,155 9,472,783
Loss for the period (40,081,081) (81,179,942)
Other comprehensive income (loss)
Unrealized gain (loss) on available- 1,362,291 (1,420,967)
for-sale financial instruments
Unrealized gain (loss) on foreign
exchange translation of self-
sustaining foreign operations 5,225,157 (3,045,922)
Other comprehensive income (loss) 6,587,448 (4,466,889)
(33,493,633) (85,646,831)
Total comprehensive loss for the
period
Basic and diluted loss per share (0.13) (0.39)
Weighted average number of common
shares outstanding 302,052,085 209,980,225
CONSOLIDATED STATEMENTS OF SHAREHOLDERS`EQUITY AND DEFICIT
(Expressed in Canadian Dollars)
Nine months ended Nine months ended
September 30, 2009 September 30, 2008
$ $
Common shares Shares Shares
Balance at 428,656,646 390,139,711
beginning of the
period 215,166,542 203,395,902
Equity line: 3,910,984 -
shares issued
for cash, net of
share issue 2,846,800 -
costs
Public offering: 132,699,566 -
shares issued
for cash, net of
share issue 115,000,000 -
costs
Share Purchase 1,314,766 6,609,230
options 654,169 2,250,386
exercised
Shares issued 35,200 29,700
for mineral
properties 20,000 10,000
Shares issued - 22,787,802
for Rusaf Gold
Limited, April
2008 - 6,613,636
Shares issued - 76,923
for Rusaf Gold
Limited, July
2008 - 22,041
Shares issued
for Puma Gold
(Pty) Ltd,July - - 1,862,354 6,648,604
2008
Share purchase - 2,223,803
warrants
exercised - 998,890
Balance at end 566,617,162 42,851,773
of the period 333,687,511 215,153,209
Share purchase Warrants
warrants Warrants
Balance at 24,005,896 17,934,934
beginning of the
period 49,180,312 31,433,202
Adjustment to - -
warrants issued
pursuant to
Senior Secured
Notes 8,248,240 -
Warrants issued 5,307,983 -
pursuant to
public offering,
net of share
issue costs 57,500,000 -
Exercised - - (998,890) (545,894)
Expired (28,750,000) (16,210,226) - -
Balance at end
of the period 86,178,552 13,103,653 30,343,312 17,389,040
Contributed
surplus
Balance at 21,599,521 11,509,102
beginning of the
period
Non-cash stock- 10,477,159 8,821,573
based
compensation
Share purchase
options
exercised,
credited to
share capital (463,755) (1,953,988)
Fair value of 16,210,226 -
warrants expired
Options and - 1,763,476
warrants on
acquisition of
Rusaf Gold
Limited
Balance at end 47,823,151 20,140,163
of the period
Deficit
Balance at (217,267,111) (132,395,033)
beginning of the
period
Loss for the (40,081,081) (81,179,942)
period
Balance at end (257,348,192) (213,574,975)
of the period
Accumulated
other
comprehensive
income (loss)
Balance at 213,003 602,872
beginning of the
period
Unrealized gain 1,362,291 (1,420,967)
(loss) on
available-for-
sale financial
instruments
Accumulated 5,225,157 (3,045,922)
unrealized gain
(loss) on
foreign exchange
translation of
self-sustaining
foreign
operations
Balance at end 6,800,451 (3,864,017)
of the period
Total (250,547,741) (217,438,992)
Accumulated
comprehensive
loss and deficit
at end of the
period
TOTAL
SHAREHOLDERS`
EQUITY 376,996,225 248,605,984
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended September 30, 2009 and September 30, 2008
(Expressed in Canadian Dollars)
Three months ended September 30
2009 2008
$ $
Operating activities
Loss for the period (16,382,475) (31,128,987)
Items not involving cash
Depreciation 801,450 826,950
Future income tax recovery (1,013,393) (3,676,161)
Unrealized loss on held-for-trading
on financial instruments 2,223,880 130,040
Non-cash stock-based compensation
expense 1,285,086 2,663,641
Unrealized foreign exchange gain (3,199,217) (1,803,079)
Accretion reclamation obligation 9,373 17,647
Amortization charge 15,246 4,785
Interest accrual 141,063 220,866
Changes in non-cash operating
working capital
Amounts receivable 4,309,764 3,748,867
Prepaid expenses (169,501) (394,956)
Inventory (5,827,765) (5,342,603)
Accounts payable and accrued
liabilities (16,293) 3,055,016
Reclamation obligation - (4,635)
Cash used in operating activities (17,822,782) (31,682,609)
Investing activities
Mineral property acquisition costs (60,835) -
Proceeds on sale of assets 61,666 -
Additions to property, plant and (33,118,919) (2,246,163)
equipment
Purchase of shares in Kryso - (274,788)
Resources Plc
Reclamation deposits 43,336 (197,791)
Cash used in investing activities (33,074,752) (2,718,742)
Financing activities
Common shares issued for cash, net
of issue costs 333,727 2,870,940
Advances received in terms of - 13,240,349
project financing facility
Repayment of long term borrowings (382,384) -
Advances from related parties 8,476 108,859
Cash (utilized by) generated from 16,220,148
financing activities (40,181)
Decrease in cash and cash (50,937,715) (18,181,203)
equivalents
Cash acquired through the - 5,987
acquisition of Puma Gold (Pty) Ltd
Foreign exchange movement on cash (3,299,779) 244,579
and cash equivalents
Cash and equivalents, beginning of
the period 110,175,863 22,560,142
Cash and equivalents, end of the 4,629,505
period 55,938,369
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2009 and September 30, 2008
(Expressed in Canadian Dollars)
Nine months ended September 30
2009 2008
$ $
Operating activities
Loss for the period (40,081,081) (81,179,942)
Items not involving cash
Depreciation 2,368,786 1,964,510
Future income tax recovery (1,725,155) (9,472,783)
Unrealized loss on held-for-trading 2,061,692 502,775
on financial instruments
Loss from associate - 351,446
Mineral properties written off 154,065 -
Non-cash stock-based compensation
expense 8,185,465 8,821,573
Unrealized foreign exchange (gain) (1,926,608) 372,154
loss
Accretion reclamation obligation 24,479 52,113
Amortization charge 43,786 4,785
Depletion 3,178,627 -
Interest expense accrual 375,112 220,866
Interest income accrual (56,471) -
Changes in non-cash operating
working capital
Amounts receivable 2,641,322 446,310
Prepaid expenses (167,488) (46,496)
Inventory (3,881,901) (6,344,682)
Accounts payable and accrued
liabilities (1,035,634) 7,898,187
Reclamation obligation - 8,365
Cash used in operating activities (29,841,004) (76,400,819)
Investing activities
Mineral property acquisition costs (60,835) (230,096)
Proceeds on sale of assets 61,666 -
Additions to property, plant and (87,677,856) (18,034,802)
equipment
Purchase of shares in Kryso - (274,788)
Resources Plc.
Reclamation deposits (1,553,633) (681,408)
Cash used in investing activities (89,230,658) (19,221,094)
Financing activities
Common shares and warrants issued
for cash, net of issue costs 142,769,544 6,237,772
Advances received in terms of - 13,240,349
project financing facility
Repayment of long term borrowing (780,880) -
Advances (to) from related parties (229,680) 520,651
Cash generated from financing 141,758,984 19,998,772
activities
Increase (decrease) in cash and
cash equivalents 22,687,322 (75,623,141)
Foreign exchange movement on cash (298,071) (2,611,271)
and cash equivalents
Cash acquired through the - 5,987
acquisition of Puma Gold (Pty) Ltd
Cash acquired through the - 4,494,976
acquisition of Rusaf Gold Limited
Cash and equivalents, beginning of
the period 33,549,118 78,362,954
Cash and equivalents, end of the 4,629,505
period 55,938,369
CONSOLIDATED SCHEDULE OF EXPLORATION EXPENSES
(Expressed in Canadian Dollars)
Mineral Property Interests Nine months Year ended
ended September December 31
30
2009 2008
$ $
Burnstone - Exploration
Assays and analysis 27,181 40,817
Drilling 80,123 2,342,178
Engineering - 62,128
Environmental, socio-economic and 2,872 (77,592)
land
Equipment rental 2,572 19,461
Geological 54,163 669,751
Graphics 585 5,596
Property fees and exploration option 134 7,749
payments
Site activities 173,339 182,379
Exploration expenses before the 340,969 3,252,467
following
Non-cash employee benefits - 56,895
Exploration expenses incurred during
the period 340,969 3,309,362
Cumulative exploration expenditures, 31,042,717 27,733,355
beginning of period
Cumulative exploration expenditures,
end of period 31,383,686 31,042,717
Hollister - Exploration
Assays and analysis 189,022 1,348,040
Drilling 6,042,470 8,316,210
Engineering 553,290 66,888
Environmental, socio-economic and 24,838 -
land
Freight 153,055 -
General office and administration 590,442 -
Geological 9,953 (19,146)
Graphics - 3,578
Property fees and exploration option 74,897 133,747
payments
Site activities 2,263,584 1,367,880
Exploration expenses before the 9,901,551 11,217,197
following
Non-cash employee benefits - 196,221
Exploration expenses incurred during 9,901,551
the period 11,413,418
Cumulative exploration expenditures, 45,195,303 33,781,885
beginning of period
Cumulative exploration expenditures,
end of period 55,096,854 45,195,303
Rusaf Gold - Exploration
Assays and analysis 81,102 938,192
Depreciation 225,003 218,553
Drilling 11,577 2,492,273
Engineering 21,185 186,313
Environmental, socio-economic and 3,343 13,091
land
Equipment rental - 477,055
Freight 52,702 450,618
Geological 87,171 935,816
Graphics - 16,494
Property fees and exploration option 440,994 329,373
payments
Site activities 549,233 1,481,027
Exploration expenses incurred during 1,472,310 7,538,805
the period
Cumulative exploration expenditures, 7,538,805 -
beginning of period
Cumulative exploration expenditures, 9,011,115 7,538,805
end of period
Other - Exploration
Assays and analysis 44 284,553
Depreciation 13,817 14,459
Drilling - 6,605
Engineering - 62,721
Environmental, socio-economic and 4,500 -
land
Equipment rental 51,200 139,746
Freight 3,463 141,198
Geological 91,288 473,250
Property fees and exploration option 992 103,863
payments
Site activities 19,080 384,967
Transportation - 29,790
Exploration expenses incurred during 184,384 1,641,152
the period
Cumulative exploration expenditures, 4,169,243 2,528,091
beginning of the period
Cumulative exploration expenditures, 4,353,627 4,169,243
end of period
Total exploration expenses before
the following 11,899,214 23,649,621
Non-cash employee benefits - 253,116
Total exploration expenses incurred
during the period 11,899,214 23,902,737
Cumulative exploration expenditures,
beginning of period 87,946,068 64,043,331
Cumulative exploration expenditures,
end of period 99,845,282 87,946,068
CONSOLIDATED SCHEDULE OF PRE-DEVELOPMENT EXPENSES
(Expressed in Canadian Dollars)
Mineral Property Interests Nine months ended Year ended
September 30 December 31
2009 2008
$ $
Burnstone - Pre-development
Mine development
Establishment work - 193,475
Equipment rental and services - 892,541
Surface infrastructure - 658,127
Portal construction - 1,292,687
Underground access and - 5,558,031
infrastructure
Depreciation - 1,144,751
Other cost
Access road - 470,575
Operational costs - 4,801,643
Long hole stoping pilot project - 192,504
Waste rock dump - 27,063
Vertical shaft - 7,778,719
Energy project - 86,256
Permanent infrastructure - surface - 582,674
Pre-development expenses before the - 23,679,046
following
Non-cash employee benefits - 414,214
Pre-development expenses incurred - 24,093,260
during the period
Cumulative pre-development 39,173,505 15,080,245
expenditures, beginning of period
Cumulative pre-development
expenditures, end of period 39,173,505 39,173,505
Hollister - Pre-development
Depreciation 1,289,501 1,673,964
General office and administration 1,594,013 -
Interest paid 375,112 -
Property evaluation 352,897 -
Surface infrastructure - 1,880,509
Underground access and 17,397,134 25,274,165
infrastructure
Operational costs 282,598 9,013,695
Pre-development expenses before the 21,291,255 37,842,333
following
Non-cash employee benefits 847,961 661,970
Pre-development expenses incurred
during the period 22,139,216 38,504,303
Cumulative pre-development 56,854,588 18,350,285
expenditures, beginning of period
Cumulative pre-development expenses,
end of period 78,993,804 56,854,588
Total pre-development before the
following 21,291,255 61,521,379
Non-cash employee benefits 847,961 1,076,184
Total pre-development expenses
incurred during the period 22,139,216 62,597,563
Cumulative pre-development
expenditures, beginning of period 96,028,093 33,430,530
Cumulative pre-development
expenditures, end of period 118,167,309 96,028,093
1. NATURE OF OPERATIONS
These unaudited interim consolidated financial statements have been prepared
in accordance with Canadian Generally Accepted Accounting Principles ("GAAP").
They do not include all the financial statement disclosures required for
annual financial statements under GAAP. These unaudited interim consolidated
financial statements should be read in conjunction with the Company`s annual
consolidated financial statements which are available through the internet on
SEDAR at www.sedar.com.
Operating results for the nine month period ended September 30, 2009 are not
necessarily indicative of the results that may be expected for the full fiscal
year ending December 31, 2009. In the opinion of management, these unaudited
interim consolidated financial statements reflect all adjustments that are
necessary for a fair presentation of the results for the interim periods
presented.
2. SIGNIFICANT ACCOUNTING POLICIES
These unaudited interim consolidated financial statements follow the same
accounting policies and methods of application as the Company`s most recent
annual financial statements, except as described in note 3.
3. ADOPTION OF NEW ACCOUNTING POLICIES
Effective January 1, 2009, the Company adopted the following accounting
standards issued by the Canadian Institute of Chartered Accountants ("CICA").
These new standards have been adopted with no restatement of prior period
financial statements.
(a) Goodwill and intangible assets (Section 3064 and 1000)
Section 3064 replaces CICA 3062 and provides guidance on the recognition,
measurement, presentation and disclosure of goodwill and intangible assets,
other than the initial recognition of goodwill or intangible assets acquired
in a business combination. The adoption of the Section had no impact on the
Company`s statement of operations.
(b) Credit risk and the fair value of financial assets and financial
liabilities (EIC 173)
Effective January 1, 2009, the Company adopted the recommendations of the
Emerging Issues Committee ("EIC") of the CICA relating to Abstract EIC 173,
Credit Risk and the Fair Value of Financial Assets and Financial Liabilities.
This Abstract confirms that an entity`s own credit risk and the credit risk of
the counterparty should be taken into account in determining the fair value of
financial assets and financial liabilities, including derivative instruments,
for presentation and disclosure purposes. The adoption of this Abstract had no
significant impact on the Company`s consolidated financial statements
(c) Mining Exploration costs (EIC174)
This Abstract considers when exploration costs related to mining properties
may be capitalized, and if exploration costs are initially capitalized, when
mining properties should be assessed for impairment to determine whether a
write-down is required, and what conditions indicate impairment and is
effective for financial statements issued after March 27, 2009. The adoption
of this Abstract had no significant impact on the Company`s consolidated
financial statements.
4. SEGMENT DISCLOSURE
The Company operates in a single reportable operating segment, the exploration
and development of mineral properties. Geographic information is as follows:
Assets September 30 December31
2009 2008
Canada
Assets other than mineral property
interests 53,687,279 22,610,226
Mineral property interests 1 1
Tanzania
Assets other than mineral property
interests 1,347,346 1,551,261
Mineral property interests 36,466,782 36,466,782
United States
Assets other than mineral property
interests 17,347,571 12,863,764
Mine development and equipment 34,737,417 14,678,623
Mineral property interests 86,329,009 92,505,493
South Africa
Assets other than mineral property
interests 18,135,698 25,547,931
Mine development and equipment 110,944,364 28,090,021
Mineral property interests 131,851,754 130,886,380
Total assets 490,847,221 365,200,482
Revenue September 30 September 30
2009 2008
United States
Ore sales 33,737,518 7,889,614
During the nine months ended September 30, 2009 the Company generated net
revenue of $33,737,518 (2008: $7,889,614) from its Hollister operation.
The ore was sold under the terms of various toll milling and ore purchase
agreements to Newmont Mining Corporation and Echo Bay Minerals Company
("Kinross").
5. SUBSEQUENT EVENTS
a) Share options granted
The Company granted 490,000 options to employees on October 9, 2009 with an
exercise price of $1.65 per common share and expiry date of October 9, 2012.
b) $110 Million bought deal public offering of convertible debentures
On October 29, 2009 the Company announced that it has entered into an
agreement with a syndicate of underwriters led by RBC Capital Markets and
including, BMO Capital Markets,Raymond James Ltd. and Thomas Weisel
Partners Canada Inc., pursuant to which the underwriters will purchase $110
million principal amount of senior unsecured convertible debentures (the
"Debentures") at a price of $1,000 per Debenture (the "Offering"), by way of a
short form prospectus. The Company has granted the underwriters an over-
allotment option to purchase up to an additional 15% of the Offering, for a
period of 30 days following the closing.
The Debentures will mature on November 30, 2014 and will accrue interest at
the rate of 8.0% per annum payable on a semi-annual basis. At the holder`s
option, the Debentures may be converted into common shares of Great Basin Gold
at any time up to the maturity date. The conversion price will be C$2.15 for
each common share, representing a premium of approximately 25% to the closing
price on October 29, 2009, subject to adjustment in certain circumstances.
The Offering is scheduled to close on or about November 17, 2009 and is
subject to certain conditions including, but not limited to, the receipt of
all necessary approvals including the approval of the Toronto Stock Exchange.
The full set of financial statements and Management Discussion and Analysis
are available on Great Basin`s website: www.grtbasin.com
Approved by the Board of Directors
Ferdi Dippenaar Ronald W Thiessen
Director Director
Ground Floor, 138 West Street 1500 Royal Centre, 1055 West
Sandown, Johannesburg Georgia Street,
South Africa Vancouver, BC Canada V6E 4N7
Tel 011 301 1800 Toll Free 1 800 667?2114
Fax 011 301 1840
www.grtbasin.com
09 November 2009
Johannesburg
Sponsor
Nedbank Capital
Date: 09/11/2009 13:00:01 Produced by the JSE SENS Department.
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