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GBG
GBG
GBG - Great Basin Gold Limited - Unaudited interim consolidated financial
statements for the quarter and nine months ended September 30, 2011
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, 2011
CONSOLIDATED BALANCE SHEETS
(Expressed in Canadian Dollars)
September December
30 31
2011 2010
$`000 $`000
Assets
Current assets
Cash and cash equivalents 6,522 12,855
Trade and other receivable 8,778 9,340
Inventories 28,669 18,440
Other current assets 2,294 1,283
46,263 41,918
Non-current assets
Loan due from related party 13,466 13,372
Property, plant and equipment 710,371 695,374
Other assets 5,197 4,719
TOTAL ASSETS 775,297 755,383
Liabilities
Current liabilities
Trade payable and accrued liabilities 49,407 61,731
Current portion of long-term debt 47,792 53,516
Current portion of other liabilities 5,324 278
102,523 115,525
Non-current liabilities
Long-term debt 184,948 156,062
Other liabilities 36,556 12,419
Site reclamation obligations 5,456 5,660
Total liabilities 329,483 289,666
Equity
Share capital 833,468 709,449
Warrants 55 6,108
Contributed surplus 81,543 77,676
Deficit (409,290) (353,911)
Accumulated other comprehensive (loss)
income (59,962) 26,395
445,814 465,717
TOTAL LIABILITIES AND EQUITY 775,297 755,383
CONSOLIDATED STATEMENT OF LOSS
For the three months ended September 30, 2011 and September 30, 2010
(Expressed in Canadian Dollars)
Three months ended September
30
2011 2010
$`000 $`000
Revenue 46,673 12,230
Cost of operations
Production cost (30,553) (14,931)
Depletion charge (1,407) (1,071)
Depreciation charge (5,030) (609)
Expenses
Exploration expenses (1,260) (3,161)
Pre-development expenses (6,287) (3,653)
Corporate and administrative costs (1,966) (2,074)
Environmental impact study (722) (763)
Foreign exchange (loss) gain - net (5,105) 921
Salaries and compensation
Salaries and wages (1,918) (2,146)
Share based payments expense (1,013) (1,123)
Loss from operating activities (8,588) (16,380)
Net interest (expense)income (5,584) 312
Net realized loss on financial (134) -
instruments
Net unrealized loss on financial (10) (3,606)
instruments recognized
Net unrealized marked-to-market (19,670) (3,699)
adjustments on financial instruments
Loss before income taxes (33,986) (23,373)
Income tax (1) 36
Loss for the period (33,987) (23,337)
Basic and diluted loss per share (0.07) (0.07)
Weighted average number of common 473,856
shares outstanding (thousands) 351,739
CONSOLIDATED STATEMENT OF LOSS
For the nine months ended September 30, 2011 and September 30, 2010
(Expressed in Canadian Dollars)
Nine months ended September
30
2011 2010
$`000 $`000
Revenue 129,754 56,992
Cost of operations
Production cost (74,733) (43,818)
Depletion charge (4,397) (4,612)
Depreciation charge (12,228) (1,845)
Expenses
Exploration expenses (7,604) (8,076)
Pre-development expenses (13,712) (10,338)
Corporate and administrative cost (6,186) (5,478)
Environmental impact study (1,647) (2,002)
Foreign exchange loss - net (1,928) (450)
Salaries and compensation
Salaries and wages (6,428) (5,333)
Share based payments expense (4,028) (3,831)
Loss from operating activities (3,137) (28,791)
Net interest (expense) income (15,988) 1,325
Net realized (loss) gain on (134) 422
financial instruments
Loss on disposal of mineral (232) -
property investment
Loss on settlement of senior (8,817) -
secured notes
Net unrealized loss on financial (7,219) (3,606)
instruments recognized
Net unrealized marked-to market (19,849) (3,699)
adjustments on financial
instruments
Loss before income taxes (55,376) (34,349)
Income tax (3) 23
Loss for the period (55,379) (34,326)
Basic and diluted loss per share (0.12) (0.10)
Weighted average number of common 453,501 343,135
shares outstanding
CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) INCOME
For the three months ended September 30, 2011 and September 30, 2010
(Expressed in Canadian Dollars)
Three months ended September
30
2011 2010
$`000 $`000
Loss for the period (33,987) (23,337)
Other comprehensive loss
Cumulative translation adjustment (56,401) 20,166
Other comprehensive (loss) income (56,401) 20,166
for the period
Comprehensive loss for the period (90,388) (3,171)
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
For the nine months ended September 30, 2011 and September 30, 2010
(Expressed in Canadian Dollars)
Nine months ended September
30
2011 2010
$`000 $`000
Loss for the period (55,379) (34,326)
Other comprehensive loss
Changes in fair value of financial - 603
instruments
Realized gain on available-for-sale - (1,530)
financial instruments upon transfer
to net income
Cumulative translation adjustment (86,357) 17,999
Other comprehensive loss (income) (86,357) 17,072
for the period
Comprehensive loss for the period (141,736) (17,254)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS`EQUITY AND DEFICIT
(Expressed in Canadian Dollars)
Nine months ended Nine months ended
September 30, 2011 September 30, 2010
$`000 $`000
Common shares Shares Shares
(thousands) (thousands)
Balance - January 1 709,449 567,596
414,015 334,158
Shares issued upon 7,288 4,462
exercise of share 3,010 2,058
options
Shares issued for 24,694 35,393 19,237 32,555
warrants
Proceeds on issuance of 81,175 -
shares for public
offering net of issue 33,827 -
costs
Shares issued for early - 3,910
settlement of senior
secured notes - 2,234
Shares issued for - 19,243
mineral properties - 10,574
Other 100 163 - -
Balance - September 30 833,468 627,766
475,646 368,261
Share purchase warrants Warrants
Warrants (thousands)
(thousands)
Balance - January 1 6,108 13,104
24,918 86,179
Proceeds on issuing (6,053) (1,776)
shares (24,694) (19,237)
Balance - September 30
224 55 66,942 11,328
Contributed surplus
Balance - January 1 77,676 74,403
Share based 6,599 5,696
compensation
Share purchase options (2,732) (1,498)
exercised, credited to
share capital
Balance - September 30 81,543 78,601
Deficit
Balance - January 1 (353,911) (326,770)
Loss for the period (55,379) (34,326)
Balance - September 30 (409,290) (361,096)
Accumulated other
comprehensive (loss)
income
Balance - January 1 26,395 927
Other comprehensive (86,357) 17,072
(loss) income
Balance - September 30 (59,962) 17,999
Total Accumulated (469,252) (343,097)
comprehensive loss and
deficit at end of the
period
TOTAL SHAREHOLDERS`
EQUITY
445,814 374,598
CONSOLIDATED STATEMENT OF CASH FLOWS
For the three months ended September 30, 2011 and September 30, 2010
(Expressed in Canadian Dollars)
Three months ended September
30
2011 2010
$`000 $`000
Operating activities
Loss for the period (33,987) (23,337)
Items not involving cash
Production non-cash charges 1,111 142
Pre-development non-cash charges 290 265
Exploration non-cash charges 30 87
Depreciation 5,198 660
Unrealized profit on financial (19) (77)
instruments
Unrealized loss on financial 10 3,606
instruments recognized
Unrealized marked-to-market adjustments 19,670 3,699
on financial instruments
Share based payments expense 1,013 1,123
Unrealized foreign exchange loss(gain) 6,139 (936)
Depletion 1,407 1,071
Interest expense 5,980 235
Interest income (396) (298)
Changes in non-cash operating working
capital
Trade and other receivables 216 11,148
Other current assets (1,649) (489)
Inventories (1,522) 589
Trade payables and accrued liabilities 6,793 3,105
Net cash generated from operating 10,284 593
activities
Investing activity
Purchase of property, plant and (36,630) (69,978)
equipment
Interest income 138 27
Reclamation deposits (252) (150)
Net cash utilized by investing (36,744) (70,101)
activities
Financing activities
Common shares and warrants issued for 12,615 30,023
cash, net of issue costs
Proceeds on issuance of debt - 24,553
Repayment of debt (15,968) (621)
Interest expense (1,516) (-)
Net cash (utilized by) generated from (4,869) 53,955
financing activities
Decrease in cash and cash equivalents (31,329) (15,553)
Cash and cash equivalents, beginning of 38,771 39,556
period
Foreign exchange movement on cash and (920) (914)
cash equivalents
Cash and cash equivalents, end of 6,522 23,089
period
CONSOLIDATED STATEMENT OF CASH FLOWS
For the nine months ended September 30, 2011 and September 30, 2010
(Expressed in Canadian Dollars)
Nine months ended September
30
2011 2010
$`000 $`000
Operating activities
Loss for the period (55,379) (34,326)
Items not involving cash
Production non-cash charges 2,078 141
Pre-development non-cash charges 665 788
Exploration non-cash charges 121 223
Depreciation 12,752 2,003
Share donation 163 -
Net realized profit on financial - (422)
instruments
Unrealized profit on financial (3) (43)
instruments
Unrealized loss on financial 7,219 3,606
instruments recognized
Unrealized marked-to-market 19,849 3,699
adjustments on financial
instruments
Share based payments expense 4,028 3,831
Unrealized foreign exchange loss 2,881 (1,489)
(gain)
Depletion 4,397 4,612
Interest expense 17,177 302
Interest income (1,189) (1,378)
Loss on settlement of senior 8,817 -
secured notes
Changes in non-cash operating
working capital
Trade and other receivables (362) (3,037)
Other current expenses (1,068) (1,070)
Inventories (9,232) 2,571
Trade payable and accrued 11,643 7,574
liabilities
Net cash generated from (utilized 24,557 (12,415)
by) operating activities
Investing activities
Advance to related party (1,468) -
Net proceeds on sale of financial - 3,527
instruments
Purchase of property, plant and (129,821) (146,039)
equipment
Additions to restricted cash - (5,882)
Interest income 460 1,060
Reclamation deposits (712) (52)
Net cash utilized by investing (131,541) (147,386)
activities
Financing activities
Common shares and warrants issued
for cash, net of issue costs 115,070 31,377
Proceeds on issuance of debt 68,810 72,401
Repayment of debt (71,723) (5,852)
Interest expense (10,556) (5,453)
Cash generated from financing 101,601 92,473
activities
Increase (decrease) in cash and
cash equivalents (5,383) (67,328)
Cash and equivalents, beginning of 12,855 89,464
period
Foreign exchange movement on cash (950) 953
and cash equivalents
Cash and equivalents, end of period 6,522 23,089
1. GENERAL INFORMATION
Great Basin Gold Ltd. ("Great Basin" or "the Company") is incorporated
under the laws of the Province of British Columbia and its registered
address is 1108-1030 West Georgia Street, Vancouver BC, Canada. The Company
is a mineral exploration and development company that is currently focused
on delivering two advanced stage projects: the Hollister Project on the
Carlin Trend in Nevada, USA and the Burnstone Project in the Witwatersrand
Goldfields in South Africa. The Company, currently recognized as an
emerging producer, will migrate to the rank of a junior gold producer as
production from these two projects increases during 2011 and 2012. Over and
above the exploration being conducted at the above mentioned properties,
greenfields exploration is being undertaken in Tanzania and Mozambique.
Operating results for the three and nine month periods ended September 30,
2011 are not necessarily indicative of the results that may be expected for
the full fiscal year ending December 31, 2011. 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 period presented.
2. BASIS OF PREPARATIONS AND ADOPTION OF IFRS
The Company prepares its financial statements in accordance with Canadian
Generally Accepted Accounting Principles ("GAAP") as set out in the
Handbook of the Canadian Institute of Chartered Accountants ("CICA
Handbook"). In 2010, the CICA Handbook was revised to incorporate
International Financial Reporting Standards ("IFRS"), and requires publicly
accountable enterprises to apply such standards effective for years
beginning on or after January 1, 2011. Accordingly, the Company has
commenced reporting on this basis in its 2011 interim consolidated
financial statements. In these financial statements, the term "Canadian
GAAP" refers to Canadian GAAP before the adoption of IFRS.
These interim consolidated financial statements have been prepared in
accordance with IFRS applicable to the preparation of interim financial
statements, including IAS 34, Interim Financial Reporting and IFRS 1, First-
time adoption of International Financial Reporting Standards. The
accounting policies followed in these interim financial statements are the
same as those applied in the Company`s interim financial statements for the
period ended March 31, 2011. The Company has consistently applied the same
accounting policies throughout all periods presented, as if these
policies had always been in effect. The interim financial statements
discloses the impact of the transition to IFRS on the Company`s reported
equity as at September 30, 2010 and comprehensive loss for the three and
nine months ended September 30, 2010.
The accounting policies applied in these interim consolidated financial
statements are based on IFRS effective for the year ended December 31,
2011, as issued and outstanding as of November 10, 2011, the date the Board
of directors approved the statements. Any subsequent changes to IFRS that
are given effect in the Company`s annual consolidated financial statements
for the year ending December 31, 2011 could result in restatement of these
interim consolidated financial statements, including the transition
adjustments recognized on change-over to IFRS.
The interim consolidated financial statements should be read in conjunction
with the Company`s Canadian GAAP annual financial statements for the year
ended December, 2010, and the Company`s interim financial statements for
the quarter ended March 31, 2011 prepared in accordance with IFRS
applicable to interim financial statements, which are both available
through the internet on SEDAR at www.sedar.com.
3. SIGNIFICANT ACCOUNTING POLICIES, JUDGEMENTS AND ESTIMATION UNCERTAINTY
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 for those changes recognized on change-
over to IFRS, as described in interim financial statements for quarter
ended March 31, 2011.
Critical accounting estimates and judgments
The Company makes estimates and assumptions concerning the future that
will, by definition, seldom equal actual results. These estimates and
judgments have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities, the disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Significant areas requiring the use of management estimates relate to
impairment of mineral property interests, valuation of inventories,
allocation of purchase price consideration to the fair value of
identifiable assets and liabilities acquired, the determination of
amortization, depletion and accretion, determination of reclamation
obligations, the determination of the fair values of financial instruments,
assumptions used in determining the fair value of non-cash share based
payments, warrants and derivatives, determination of valuation allowances
for deferred income tax liabilities, estimated market related interest rate
used to calculate the equity component of compound financial instruments
and allocation of indirect mining and overhead expenses to production and
development costs.
4. SEGMENT DISCLOSURE
The Company operates in reportable operating segments to deliver on its
strategy to explore, develop and operate mineral properties. Management has
determined the operating segments based on the reports reviewed by the
Company`s Chief Operating Decision Maker ("CODM" that are used to make
strategic decisions. The company`s CODM is its Chief Executive Officer.
Geographic information is as follows:
Assets September 30 December 31
2011 2010
$`000 $,000
Corporate entities
Assets other than mineral property
interests 5,062 14,159
Tanzania
Assets other than mineral property
interests 339 618
Mineral property interests 45,127 45,127
United States
Assets other than mineral property
interests 28,412 21,640
Mine development and equipment 44,101 40,508
Mineral property interests 52,476 53,742
South Africa
Assets other than mineral property
interests 32,481 25,764
Mine development and equipment 495,478 469,702
Mineral property interests 71,821 84,123
Total assets 755,383
775,297
Three months Nine months ended
ended
Revenue September 30 June 30
2011 2010 2011 2010
$`000 $`000 $`000 $`000
Nevada operations
Sale of refined precious
metals 35,754 12,230 106,949 56,992
South African operations
Sale of refined precious
metals 10,919 - 22,805 -
46,673 12,230 129,754 56,992
Refined precious metals are sold to RK Mine Finance Trust I under the terms
of an off-take agreement.
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
Director
Ground Floor, 138 West Street
Sandown, Johannesburg
South Africa
Tel 011 301 1800
Fax 011 301 1840
Ronald W Thiessen
Director
1500 Royal Centre, 1055 West Georgia Street,
Vancouver, BC Canada V6E 4N7
Toll Free 1 800 667?2114
www.grtbasin.com
16 November 2011
Johannesburg
Sponsor
Sasfin Capital
Date: 16/11/2011 13:00:10 Produced by the JSE SENS Department.
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