| Mon 10 May 2010, 14:47 | | GBG - Great Basin Gold - Great Basin reports operational and financial results |
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GBG
GBG
GBG - Great Basin Gold - Great Basin reports operational and financial results
for the quarter ended March 31, 2010
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")
GREAT BASIN REPORTS OPERATIONAL AND FINANCIAL RESULTS FOR THE QUARTER ENDED
MARCH 31, 2010
Great Basin Gold Ltd. ("Great Basin" or the "Company") (TSX: GBG; NYSE Amex:
GBG; JSE: GBG) announces results for the first fiscal quarter ended March 31,
2010. Highlights from Nevada operations include excellent operational
performance at Hollister and improved efficiencies at the Esmeralda Mill
facility, which had its first gold pour on April 14, 2010. In South Africa, the
sinking phase of the Vertical Shaft at Burnstone was completed and good progress
was made in the construction of the mill facility. Corporately, the Company is
nearing completion of binding documentation for a previously announced US$47
million export loan facility with Credit Suisse AG. Currency amounts are stated
in Canadian dollars unless otherwise indicated.
Great Basin incurred a loss of $0.02 per share for the quarter, compared to
$0.03 per share for the quarter ended December 31, 2009. The Esmeralda Mill
recovered 12,533 Au eqv ounces, of which 6,109 Au eqv ounces were sold,
generating revenue of $6.8 million. Total tons extracted through trial mining
activities at Hollister increased by 53% over the fourth quarter of 2009. A
total of 25,777 tons of ore grading 1.07 Au eqv ounces per ton or 36.6 g/t and
containing 27,707 Au eqv ounces was extracted during the quarter, compared to
16,785 tons containing 20,660 Au eqv ounces in the previous quarter. Au eqv
ounces extracted increased by 34%.
At Hollister, cash production costs for the quarter amounted to $622 (US$599)
per ton, consisting of $454 (US$437) mining and $169 (US$162) milling and
haulage costs. The mining cash production costs were 24% lower than the previous
quarter and 31% lower than in the quarter ended March 31, 2009. On an Au eqv oz
basis, cash production costs for the quarter amounted to $824 (US$793),
consisting of $600 (US$577) for mining and $224 (US$215) for processing and
haulage costs. Cash costs per ounce were still relatively high, mainly related
to throughput and recoveries still impacted by the mill optimization project,
and increased road maintenance charges resulting from winter conditions, as well
as charges related to off-site carbon stripping to recover gold. These costs are
expected to decrease with the completion of the optimization project and the
installation of the furnace at the Esmeralda Mill, which now allows for on-site
pouring of dore.
At March 31, 2010, the Hollister ore stockpile contained approximately 48,700
tons with an estimated metal content of 48,500 Au eqv ounces.
The upgrading of the Esmeralda Mill continued with the completion of the
conversion of the carbon-in-pulp to a carbon-in-leach circuit, the installation
of the Merrill Crowe system and the installation of a furnace which allowed for
the first gold pour. Mill throughput increased by 98% over the previous quarter;
Au eqv ounces recovered increased by 83%. This quarter will see the installation
of the second carbon stripping unit to provide further recovery and throughput
enhancements.
At Burnstone, development costs of $33 million were capitalized in the quarter,
compared to $26 million in the quarter ended December 31 2009. As a result of an
increased amount of activity related to the Burnstone Mill facility, the capital
expenditure is expected to increase to $58 million in the second quarter.
Good progress also continues to be made in the development of surface and
underground infrastructure at Burnstone. At May 6, 2010, some 8,748 ft (2,667 m)
of decline development was completed, with 213 ft (65 m) remaining to be done
before it is linked up with the vertical shaft. A total of 6,042 ft (1,842 m)
of on-reef development has been completed to date and good continuity is shown
in the exposed part of the reef. The long hole stoping trials are progressing
well and the rate of mining is expected to increase as more mining areas become
available. The Company plans to implement this form of mechanized mining on a
trial basis over a 9 to 12 month evaluation period. Focus is on the
establishment of more stopes in Block B while activities in Block C are mainly
focused on reef development. Block C Middle level was accessed during the
quarter with 65 ft (20 m) remaining before Block C Upper is accessed. The
additional access points in Block C will allow for an increase in opening up of
new mining areas. A total of approximately 85,000 tons have been accumulated on
the ore stockpiles which will be used for the mill commissioning.
A highlight of the quarter was the completion of the sinking phase of the
Burnstone vertical shaft on May 4, 2010. Installation of the shaft equipment is
planned to commence by May 11. The vertical shaft has reached its final depth of
depth of 1,598 ft (487 m). The initial development on 40 Level and 41 Level
Stations were completed and will allow for ore handling once the shaft has been
commissioned. Installation of the surface fans has commenced, in preparation for
the completion of raise boring of the ventilation shaft; this project is making
good progress with only 75 ft (23 m) remaining to be done.
Delivery of the Burnstone mills is planned for mid-May, following the completion
of the associated infrastructure. The winder house is now complete and the
installation of the separate rock and personnel conveyance winders remain on
schedule. Internal electrical reticulation infrastructure has been completed and
work continues on the delivery of Eskom power to site, which is expected to be
completed by mid-June 2010.
The Company also secured additional financing through a US$47 million export
finance facility. Execution of customary loan and security documentation and
fulfillment of conditions precedent that include obtaining certain third party
consents is nearing completion. If all conditions to closing can be met, closing
of the facility and funding is targeted for on or before May 15, 2010.
Restructuring of the put option on the Senior Secured notes issued in November
2008 also resulted in postponing potential debt payment of US$34.2 million to
December 2011.
President and CEO Ferdi Dippenaar commented on the quarter "The Company
continues to make solid progress at both its gold development projects. We
expect the good trial mining performance at the Hollister project to continue
with operational efficiency improvements continuing at the Esmeralda Mill. The
Burnstone project is at an extremely exciting phase of its development with all
remaining construction activities well underway. Our target date for the
delivery of the Burnstone project is just weeks away."
Johan Oelofse, Pr.Eng., FSAIMM, Chief Operating Officer of Great Basin and a
qualified person, as defined by Canadian regulatory policy, has reviewed and
assumed responsibility for the technical information contained in this release.
Complete quarterly details are contained the Company`s March 31, 2010 quarterly
report and related management`s discussion and analysis on file at
www.sedar.com. 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, 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.
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" 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.
Johannesburg
Monday, 10 May 2010
Sponsor
Nedbank Capital
Date: 10/05/2010 14:47:01 Produced by the JSE SENS Department.
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