| Tue 3 May 2011, 14:30 | | GBG - Great Basin Gold provides operational update |
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GBG
GBG
GBG - Great Basin Gold provides operational 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" or "the Company")
GREAT BASIN GOLD PROVIDES OPERATIONAL UPDATE
Including initial Production and Revenue from the Burnstone Mine
May 3, 2011, Vancouver, BC - Great Basin Gold Ltd. ("Great Basin Gold" or the
"Company"), (TSX: GBG; NYSE Amex: GBG; JSE: GBG) reports an operational update
for the quarter ended March 31, 2011 (Q1 2011). The Company will file its
interim financial statements for Q1 2011 on May 16, 2011 and will hold an
earnings call on May 17, 2011 at 9 am (EST).
Burnstone
The Metallurgical Plant, as well as all other major capital projects was
successfully commissioned by the end of January 2011. During the quarter,
Burnstone recovered 5,511 gold ounces (Au oz) and sold 2,794 oz to record its
maiden revenue of $3.8 million. The cash production cost per tonne for the
period is estimated at US$70 (ZAR490), which is in-line with the planned cost
during production build-up. Ounces recovered were predominantly from development
ore processed, which at a lower head grade of 0.03 Au oz/t (1.03 g/t) grade
resulted in a gold recovery of 83%. Gold recoveries are expected to improve as
the grade of the mill feed increases. The impact of the lower head grade
resulted in a cash production cost of approximately US$1,365 (ZAR 9,555) per oz.
The Metallurgical Plant processed approximately 200,000 tonnes during the
quarter, in-line with the production build-up plan. Underground tonnes are being
augmented with the stockpile material to allow the mill to operate at an average
of 90,000 tonnes per month until such time as production from underground is
sufficient to increase to the planned processing rate of 125,000 tonnes per
month.
Mechanized development continued with 3,288 meters being developed during the
quarter against a plan of 3,600 meters, bringing the total development for the
project to date to 12,402 meters of which 6,855 are on reef. Long Hole Stoping
continued with a total of 6,000 square meters stoped to date. Good progress was
made with the second phase of the shaft infrastructure on 40 and 41 Level, with
the tramming loop and second access to the shaft tip being completed. This will
alleviate the congestion at the tips and allow for the further ramp-up of tonnes
though the shaft system. Over and above the area stoped to date, 16 panels were
also drilled and available for blasting at the end of March, 2011.
Hollister
During the quarter, 21,828 tonnes were extracted through trial mining at
Hollister, an average grade of 1.03 gold equivalent oz (Au eqv oz) (1).
Hollister maintained its production momentum from Q4 2010 by recovering 28,500
Au eqv oz, of which only 17,500 Au eqv oz were recognized in revenue as an
additional 11,000 Au eqv oz were delivered but not sold to the refiner by
quarter end. Until such time as the installation of the acid regeneration system
has been completed at the Esmeralda Mill, the Company will continue to ship-
loaded carbon to the refinery as opposed to dore, there will be a timing delay
on when the revenue from these ounces can be recognized.
Since the introduction of clean carbon in February 2011, Au recoveries have
exceeded 90%, with the Au recovery for the quarter being 88%, and Ag recoveries
increasing to 68%. The Esmeralda Mill treated 21,634 tonnes during the quarter
with an average head grade of approximately 1 Au eqv oz/t (32.15 g/t). Cash
costs for the quarter are estimated at US$680 per Au eqv ounce. Although the
overall average in-situ grades in the Blanket Zone are lower than what was
encountered in the super high grade area, an additional 1,025 tons were mined
during the quarter, at an average grade in excess of 3 Au eqv oz/t.
The delay in recognizing revenue from the Nevada operations had a negative
impact on the earnings for the quarter. The net loss for the quarter is also
impacted by the fair value charges attributable to the mark-to-market of the
zero-cost collar hedge programs, as well as the settlement loss recognized on
repayment of the Senior Secured Notes in March 2011. The adjusted loss per share
for the quarter is estimated at $0.01 with the loss per share $0.05. The Company
had $68 million in cash reserves on March 31, 2011.
Ferdi Dippenaar, Great Basin Gold President and CEO, commented: "Although
experiencing the usual challenges with bringing a new mine into production,
Burnstone is settling into a production rhythm and the progress made by the team
on a monthly basis is reassuring. Production is expected to increase to 18,000
ounces in Q2 2011. The Nevada operations showed improvements in a number of
areas during the quarter, notably on ounces recovered through trial mining as
well as the improved recoveries at our Esmeralda Mill. The latter improvement
especially pleasing with the impact already evident in both the resulting cash
costs and the ounces delivered to the refinery. Not being able to recognize all
ounces at the refiners has impacted our operating margins as well as earnings.
Our short to medium term focus at both of these operations is to increase
production and manage costs, and unlock the intrinsic value of these quality
projects."
(1) Gold equivalent is calculated using metal prices of $1,350 per ounce for
gold and $25 per ounce for silver.
Johan Oelofse, Pr.Eng., FSAIMM, Chief Operating Officer of Great Basin Gold, a
Qualified Person as defined by regulatory policy, has reviewed and assumed
responsibility for the technical information contained in this release.
For additional details on Great Basin Gold 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 Technical Reports 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 Gold, investors should review the
Company`s annual Form 40-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 production cost per ounce/tonne 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. It is determined by dividing the relevant mining
and processing costs including royalties by the ounces produced/tonnes milled in
the period. There may be some variation in the method of computation of "cash
production cost per ounce/tonne" as determined by the Company compared with
other mining companies. Cash production costs per ounce/tonne 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. As a Non-
GAAP Financial Measure cash production costs should not be considered in
isolation or as a substitute for measures of performance prepared in accordance
with GAAP. There is material limitations associated with the use of such Non-
GAAP measures.
Sponsor
Nedbank Capital
Date: 03/05/2011 14:30:01 Produced by the JSE SENS Department.
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