| Thu 25 Feb 2010, 15:30 | | GBG - Great Basin Gold - Great Basin Provides Fourth Quarter Operational And |
|
GBG
GBG
GBG - Great Basin Gold - Great Basin Provides Fourth Quarter Operational And
Financial Update
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 PROVIDES FOURTH QUARTER OPERATIONAL AND FINANCIAL UPDATE
February 25, 2010, Vancouver, BC - Great Basin Gold Ltd. ("Great Basin" or the
"Company") (TSX: GBG; NYSE Amex: GBG; JSE: GBG) announces an operational
update for its fourth quarter, along with unaudited financial results for the
quarter and the financial year ended December 31, 2009. Highlights include
operational improvements at the Company`s newly refurbished Esmeralda Mill
facility for the Hollister Project in Nevada, early successes with long hole
stoping trial-mining methods at both the Hollister and Burnstone projects and
good progress in the construction of the metallurgical facility, vertical
shaft and underground infrastructure at the Burnstone Project in South Africa.
Great Basin incurred an estimated loss of CDN$0.03 per share for the fourth
quarter as compared to CDN$0.05 per share for the quarter ended September 30,
2009. Year-on-year, the loss per share decreased from CDN$0.40 per share in
2008 to CDN$0.16 cents per share in 2009. The cost reduction program
initiated in October 2008 resulted in decreased expenditures for exploration,
pre-development and administration. The Company had working capital of $92
million on December 31, 2009 of which $89 million is cash and cash
equivalents.
At Hollister, ore tons and gold equivalent ounces extracted from trial mining
activities during the fourth quarter were lower than planned due to several
factors including more difficult mining conditions and an approximately two
week suspension of trial mining in order to review the causes of, and take
corrective action in connection with a worker falling accident during November
which, fortunately, resulted in only a minor injury. A total of 16,785 tons of
ore containing 20,660 Au eqv oz (Note 1) were extracted which is,
nevertheless, a 15% improvement over the third quarter of 2009. A total of
81,211 Au eqv oz was extracted over the 2009 year. Cash costs per ton mined
for the quarter were adversely impacted by the lower than planned tonnage;
however, good progress was still made on reducing the operating costs, and the
cash cost per ore ton extracted from underground improved 12% from US$480 in
2008 to US$423 in 2009. In addition, changes in various areas have been made,
including management and supervision, which have already resulted in improved
performance for the first two months of 2010.
A total of 161,518 Au eqv oz has been extracted at Hollister since the
commencement of trial-mining activities in June 2008. The average project head
grade of 1.34 Au eqv oz per ton (45.9 g/t) to date remains in excess of the
planned grade of 1.0 Au eqv oz per ton. Delineation and exploration drilling
conducted during 2009 has provided valuable information on structure in the
ore body that is being incorporated into the medium and longer term mine plan.
Following the first phase of refurbishment and commissioning of the Esmeralda
mill in September 2009, the focus has been on improving the mill`s
efficiencies. Some 8,070 ore tons, containing an estimated 6,866 Au eqv oz,
were processed through the Esmeralda mill processing facilities during the
quarter. Based on a recovery factor of 83%, this resulted in extraction of
5,676 Au eqv oz. Further near-term operational improvements underway are
expected to yield higher mill recoveries. Although the mill is able to treat
approximately 350 tons per day, current carbon stripping capacity is
insufficient due to the higher metal content. A second carbon stripping
facility will be installed by the end of March 2010, thereby doubling the
carbon stripping capacity.
No revenue was booked during the fourth quarter and, as a result, the
Hollister ore stockpile at December 31, 2009 contained 41,683 tons with an
estimated metal content of 41,446 Au eqv oz, and a further 5,676 Au eqv oz
were in process in the Esmeralda mill circuit. Dore bars are currently being
poured off-site and the first refined bullion was sold in early February 2010.
The re-introduction of the refurbished Merrill-Crowe circuit and furnace will
see all dore being poured on-site as of the start of the second quarter of
2010. A number of alternatives are currently being considered to expedite
toll processing or sale of excess ore on the stockpile.
At Burnstone, good progress continues to be made with the development of
surface and underground infrastructure. As at December 31, 2009, 8,292 ft
(2,528 m) of decline development had been completed and a total of 2,886 ft
(880 m) of on-reef development was completed during the quarter, and 3,710 ft
(1,131 m) to date, with good continuity in the reef exposed.
The initial long hole stoping trials have delivered positive results thus far,
and the Company plans to implement this higher level of mechanized mining on a
trial basis over a period of 9 to 12 months before final evaluation. The
current focus is the establishment of more mining stopes in Block B, with
activities in Block C mainly focused on reef development. At December 31,
2009, in excess of 60,000 tons have been accumulated in ore stockpiles.
Sinking of the vertical shaft at Burnstone has continued and, at February 21,
2010, the shaft had reached a depth of 1,476 ft (450 m) below surface with 115
ft (35 m) remaining to shaft bottom. The final depth of the shaft is planned
at 1,591 ft (485 m). Development, totaling 902 ft (275 m), on 40 Level Station
has been completed. Development of the 41 Level Station commenced with 430 ft
(131 m) being completed and 436 ft (133 m) remaining before the sinking to
shaft bottom re-commences, which is planned for mid-March 2010.
The refurbishment of the Burnstone mills continues to be on schedule. All
civil construction for the metallurgical plant facility will have been
completed by mid-March 2010, which will allow for the delivery of the mills as
well as an accelerated rate of construction of metallurgical plant
infrastructure.
President and CEO Ferdi Dippenaar commented on the quarter: "The number of
gold equivalent ounces extracted through trial mining from our Hollister Mine
project in the December quarter was somewhat lower than planned due to several
factors; however I am pleased to report that the pace has picked up
significantly in early 2010.
Overall, the Company continues to make good progress at both its gold
development projects. Burnstone, in particular, is entering an extremely
exciting phase of its development, with vertical shaft, mills and
metallurgical plant converging on completion over the next several months."
Johan Oelofse, Pr.Eng., FSAIMM, Chief Operating Officer of Great Basin and a
Qualified Person, as defined by regulatory policy, has reviewed and assumed
responsibility for the technical information contained in this release.
Ferdi Dippenaar
President and CEO
For additional details on Great Basin and its gold properties as well as
further particulars about the financial and operational update, 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 document contains "forward-looking statements" that were based on Great
Basin`s expectations, estimates and projections as of the dates as of which
those statements were made. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology such as "outlook",
"anticipate", "project", "target", "believe", "estimate", "expect", "intend",
"should" and similar expressions.
Forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the Company`s actual results,
level of activity, performance or achievements to be materially different from
those expressed or implied by such forward-looking statements. These include
but are not limited to:
- uncertainties and costs related to the Company`s exploration and
development activities, such as those associated with determining whether
mineral resources or reserves exist on a property;
- uncertainties related to feasibility studies that provide estimates of
expected or anticipated costs, expenditures and economic returns from a
mining project; uncertainties related to expected production rates,
timing of production and the cash and total costs of production and
milling;
- uncertainties related to the ability to obtain necessary licenses,
permits, electricity, surface rights and title for development projects;
- operating and technical difficulties in connection with mining
development activities;
- uncertainties related to the accuracy of our mineral reserve and mineral
resource estimates and our estimates of future production and future cash
and total costs of production, and the geotechnical or hydrogeological
nature of ore deposits, and diminishing quantities or grades of mineral
reserves;
- uncertainties related to unexpected judicial or regulatory proceedings;
- changes in, and the effects of, the laws, regulations and government
policies affecting our mining operations, particularly laws, regulations
and policies relating to
- mine expansions, environmental protection and associated compliance
costs arising from exploration, mine development, mine operations
and mine closures;
- expected effective future tax rates in jurisdictions in which our
operations are located;
- the protection of the health and safety of mine workers; and
- mineral rights ownership in countries where our mineral deposits are
located, including the effect of the Mineral and Petroleum Resources
Development Act (South Africa);
- changes in general economic conditions, the financial markets and in the
demand and market price for gold, silver and other minerals and
commodities, such as diesel fuel, coal, petroleum coke, steel, concrete,
electricity and other forms of energy, mining equipment, and fluctuations
in exchange rates, particularly with respect to the value of the U.S.
dollar, Canadian dollar and South African rand;
- unusual or unexpected formation, cave-ins, flooding, pressures, and
precious metals losses (and the risk of inadequate insurance or inability
to obtain insurance to cover these risks);
- changes in accounting policies and methods we use to report our financial
condition, including uncertainties associated with critical accounting
assumptions and estimates;
- environmental issues and liabilities associated with mining including
processing and stock piling ore;
- geopolitical uncertainty and political and economic instability in
countries which we operate; and
- labour strikes, work stoppages, or other interruptions to, or
difficulties in, the employment of labour in markets in which we operate
mines, or environmental hazards, industrial accidents or other events or
occurrences, including third party interference that interrupt the
production of minerals in our mines.
For further information on Great Basin, investors should review the Company`s
annual Form 20-F filing with the United States Securities and Exchange
Commission www.sec.com and home jurisdiction filings that are available at
www.sedar.com. The Company undertakes no obligation to update forward-looking
information if circumstances or management`s estimates or opinions should
change except as required by law.
Cautionary Note regarding Non-GAAP Measurements
Cash cost per ounce produced is a not a generally accepted accounting
principles ("GAAP") based figure but rather is intended to serve as a
performance measure providing some indication of the mining and processing
efficiency and effectiveness of test mining at the Hollister project. It is
determined by dividing the relevant mining and processing costs excluding
royalties by the ounces produced in the period. There may be some variation in
the method of computation of "cash cost per ounce produced" as determined by
the Company compared with other mining companies. In this context, "ounces
produced" includes in-process and dore inventory along with ounces of gold
sold in the period. Cash costs per ounce produced may vary from one period to
another due to operating efficiencies, waste to ore ratios, grade of ore
processed and gold recovery rates in the period. We provide this measure to
our investors to allow them to also monitor operational efficiencies of test
mining at Hollister. As a Non-GAAP Financial Measures cash cost per ounce
should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. There are material limitations
associated with the use of such Non-GAAP measures.
Note:
(1) Gold equivalent ounces used here, and elsewhere in this document, was
calculated using a gold price of US$800 per ounce and a silver price of
US$12 per ounce.
25 February 2010
Sponsor
Nedbank Capital
Date: 25/02/2010 15:30:02 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
