| Mon 24 Oct 2011, 14:45 | | GBG - Great Basin Gold Limited - Provides operational update - |
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GBG
GBG
GBG - Great Basin Gold Limited - Provides operational update -
Burnstone continues to improve
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 PROVIDES OPERATIONAL UPDATE - BURNSTONE CONTINUES TO
IMPROVE
October 24, 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 three months ended September 30, 2011.
The Company will file its Management Discussion and Analysis and
interim financial statements for the third quarter ("Q3 2011") on
November 15, 2011 and will hold an earnings call on November 16, 2011
at 9 am (EST).
Hollister
The Nevada operations produced 26,045 Au eqv ounces (1) from trial
mining activities during the quarter (Q2 2011: 26,757 Au eqv ounces).
During the quarter, ore tonnes mined from the Hollister project
increased 5% to 26,474 (Q2 2011: 25,297 tonnes) and tonnes processed at
the Esmeralda mill increased by 34% from 22,237 to 29,869. The
contained grade of 0.9 Au eqv oz/t was lower than the 1.35 Au eqv oz/t
reported for the previous quarter, but is in-line with the reserve
grade of the Hollister ore body. Notwithstanding the significant
increase in tonnes processed during the quarter, gold and silver
recoveries at the Esmeralda mill remained within the targeted levels at
92% Au and 74% Ag, respectively. The installation of the acid wash and
carbon regeneration system at the Esmeralda Mill was completed during
the first week in October 2011 and dore is planned to be poured on site
starting at the end of October 2011. Only 22,790 Au eqv ounces were
sold during the quarter (Q2 2011: 34,522 Au eqv ounces) with 6,850 Au
eqv ounces remaining at the refiner that will be sold and the revenue
recognized in Q4 2011.
Primary waste development was again focused on the Blanket Zone ("BZ")
spiral ramp, the BZ Alimak raise, and the 5400 BZ I-Drift. During the
quarter, the BZ Ramp achieved 1,136 feet (344 meters) of advance; 204
feet (62 meters) of development remained at quarter end to complete the
ramp. The 5400 I-drift, which originates from the BZ Alimak raise, was
advanced 169 feet (51 meters) to the east during the quarter, with 161
feet (49 meters) remaining to reach the +1 opt Au grade shells modelled
from surface and underground drilling for the 3000N 1W area.
Burnstone
Operational improvements continued at Burnstone, with mechanized ore
development increasing by 80% quarter on quarter to 2,786 meters (Q2
2011: 1,550 meters). Ore to waste development ratio also improved, with
ore representing 67% of total development during the quarter (Q2 2011:
45% ore development). Following increased infill and cover drilling to
identify geological structures and faulting, improved geological data
and refinement of interpretations, waste development was reduced from
1,872 to 1,403 meters during Q3 2011.
Further optimization of the Long Hole Stoping mining method continued
during the period with a revised stope lay-out design implemented that
increases the square meters available for stoping for each meter of ore
development by 88% from 9 to over 17 square meters. The revised layout,
which could allow larger stopes to be mined, is still in its trial
phase but positive preliminary results are already evident. This stope
design change would have a short term impact as fewer stopes would be
available, initially, for mining because of the increase in development
meters required to open up the larger stopes. However, over the longer
term this change could positively impact the ore tonnes mined per meter
developed as well as cash costs on a per ton and per ounce basis.
Notwithstanding the impact of opening up the larger stopes, the stoping
square meters increased by 45% to 7,408 square meters during the
quarter (Q2 2011: 5,122 square meters), with stoping widths of between
60 - 80 cm being achieved on a consistent basis. The contained gold
grade from stoped material also increased by 39% to 3.57 g/t (Q2 2011:
2.57 g/t). The contained gold grade from development ore also increased
by 25% to 0.80 g/t (Q2 2011: 0.64 g/t). Stope block availability is
expected to increase steadily during Q4 2011.
The Metallurgical Plant continued to perform in-line with expectations,
with 209,224 tonnes processed during the quarter (Q2 2011: 202,660
tonnes). Although the last of the lower grade surface stock pile
material was milled during the quarter, plant recoveries improved to
89% (Q2 2011: 85%) mainly due to the higher grades of stope and
development tonnes provided from underground,
Although recovered ounces of gold were below planned levels, the gold
recovered increased by 33% quarter on quarter to 6,486 ounces with
sales of 6,518 ounces recorded.
Corporate
As at September 30, 2011, the Company had approximately $14 million in
cash and near cash reserves with 6,850 Au eqv ounces remaining at the
refiner that will be converted to cash in Q4 2011. The previously
announced US$40 million standby debt facility with Credit Suisse Ag
remains undrawn with the entire facility available.
Ferdi Dippenaar, Great Basin Gold President and CEO, commented: "The
Nevada operations continue to build momentum in delivering improved
quarter on quarter operational results as evident from the Q3 2011
performance. At Burnstone, production is increasing but remains behind
schedule. Although the initial production build up is important for
cash flow purposes, the decision to change the underground stope
layouts will impact on the short term availability of mining areas, but
is expected to result in a number of positive benefits over the longer
term exploitation of the ore body. We believe that our decision to
utilize mechanized mining as the preferred mining method at Burnstone
was the correct one, with the results starting to support this. The
continued improvement in ore development and stoping rates at Burnstone
is reassuring, with more improvement expected in the short term to get
to the planned production levels. The cash flow generated from the
expected continued improvement in operational performance from both
operations as well as the undrawn $40 million standby debt facility
should provide the Company with adequate cash resources to fund its
working capital requirements. "
Johan Oelofse, Pr.Eng., FSAIMM,, 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
(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
(1) Gold equivalent ("Au eqv") calculations use US$1,400/oz for Au and
US$30/oz for Ag.
24 Octobet 2011
Sponsor:
Sasfin Capital (A division Sasfin Bank Limited)
Date: 24/10/2011 14:45:01 Produced by the JSE SENS Department.
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