| Mon 6 Feb 2012, 15:30 | | GBG - Great Basin Gold Limited - Preliminary fourth quarter & full year 2011 |
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GBG
GBG
GBG - Great Basin Gold Limited - Preliminary fourth quarter & full year 2011
operating results
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 ANNOUNCES
PRELIMINARY FOURTH QUARTER AND FULL YEAR 2011 OPERATING RESULTS
February 6, 2012, Vancouver, BC - Great Basin Gold Limited ("Great Basin Gold"
or the "Company"), (TSX: GBG; NYSE Amex: GBG; JSE: GBG) reports preliminary
unaudited fourth quarter and full year 2011 operating results.
Hollister, Nevada Operations
Quarter ended Variance Year ended Variance
Dec 31 Sept 30 Dec 31 Dec 31
2011 2011 2011 2010
Ore 22,431 26,474 (15%) 96,030 89,613 7%
tonnes to
surface
Contained 21,773 23,811 (9%) 101,764 109,255 (7%)
Au eqv oz
extracted
Contained 0.81 0.75 8% 0.90 1.17 (23%)
average (26.2 (24.3 (29.0 (37.6
grade Au g/t) g/t) g/t) g/t)
oz/ton
Contained 6.22 6.74 (8%) 7.41 7.08 5%
average (200.1 (216.8 (238.2 (227.6
grade Ag g/t) g/t) g/t) g/t)
oz/ton
Tonnes 24,328 29,869 (19%) 98,068 116,029 (16%)
processed
Recovered 18,552 22.701 (18%) 86,444 88,149 (2%)
Au oz
Recovered 101,487 156,030 (35%) 521,099 448,353 16%
Ag oz
Recovered 20,727 26,045 (20%) 97,610 95,186 3%
Au eqv oz
Recovery 92% 92% - 92% 82% 12%
% Au
Recovery 70% 74% (5%) 72% 60% 20%
% Ag
Au eqv oz 17,603 22,790 (23%) 92,239 88,789 4%
sold
Cash cost 783 665 (18%) 674 740 9%
per Au
eqv oz
produced
(US$)
The Nevada operations produced 20,727 Au eqv ounces from trial mining
activities during the quarter (Q3 2011: 26,045 Au eqv ounces) and 97,610 Au
eqv oz for the full year of production (2010: 95,186 Au eqv oz), compared to
an average annual forecast of 100,000 Au eqv oz for the year. A similar
performance is expected in 2012. As previously indicated, the high grade
nature of the Hollister ore body can lead to quarterly grade fluctuations, and
this occurred in this quarter. The Au eqv grade increased by 8% from 0.75
oz/t (24.3 g/t) in Q3 2011 to 0.81 oz/t (26.2 g/t) in Q4 2011.
Fiscal 2011 was the first year that all material extracted from trial mining
activities was processed at our Esmeralda mill, which showed a marked
improvement in Au recovery from 2010, increasing from 82% to 92%. As the
performance of the acid wash and carbon regeneration system, which was
commissioned during November 2011, has not yet reached planned levels, the
mill continued with the process of replacing carbon on a continuous basis and
this impacted the amount of Au eqv oz sold as well as the cash costs reported
for the quarter. In an effort to mitigate the time delay in recognizing
produced metal as revenue and the insufficient capacity of local refiners, a
shipment of loaded carbon was sent to Rand Refinery in South Africa in late
December at an additional cost of approximately US$35 per Au eqv oz.
Notwithstanding the quarterly increase in cash costs, the year-on-year cash
costs decreased by 9% to US$674 per Au eqv oz which is only marginally above
the 2011 forecast of US$650 per Au eqv oz.
1. Gold equivalent ("Au eqv") calculations use US$1,400/oz for Au and US$30/oz
for Ag.
Burnstone, South Africa Operations
Quarter Quarter Variance Year
ended Dec ended ended
31 2011 Sept 30 Dec 31
2011 2011
Ore 2,900 2,786 4% 8,402
development
(meters)
Waste 1,083 1,403 23% 6,441
development
(meters)
Stoping 6,653 7,408 (10%) 22,943
(square
meters)
Stoping square 7,205 5,090 42% 7,205
meters
available
Ore tonnes to 126,282 138,158 (9%) 499,309
surface -
development
Ore tonnes to 21,007 24,379 (14%) 80,472
surface -
stoping
Ore tonnes to 147,289 162,537 (9%) 579,781
surface -
total
Contained Au 4,468 3,451 30% 13,845
oz extracted -
development
Contained Au 2,423 2,705 (10%) 7,609
oz extracted -
stoping
Contained Au 6,891 6,156 12% 21,454
oz extracted -
total
Contained 0.04 0.02 43% 0.03
average grade (1.14 (0.80 (0.89
Au eqv oz/ton g/t)) g/t) g/t)
- development
Contained 0.12 0.11 4% 0.09
average grade (3.71 (3.57 (3.04
Au eqv oz/ton g/t) g/t) g/t)
- stoping
Contained 0.05 0.04 23% 0.04
average grade (1.50 (1.22 (1.19
Au eqv oz/ton g/t) g/t) g/t)
- total
Tonnes milled 160,762 209,224 (23%) 775,524
Recovered Au 6,470 6,486 - 23,361
oz
Recovery % Au 89% 89% - 88%
Au oz sold 7,058 6,518 8% 21,989
Cash cost per 1,793 2,345 24% 1,780
Au oz produced
(US$)
The production ramp up at Burnstone continued, with ore development meters
increasing by 4% from 2,786 metres in Q3 2011 to 2,900 meters in Q4 2011.
Quarter-on-quarter, the square meters of stoping available increased by 42%.
With the improved information on geological structures being applied to
planned development, waste development meters per quarter decreased by 48%
from levels reported in Q1 2011 to 1,083 meters in Q4 2011.
Since intersecting an 80 meter graben fault in Q1 2011, in-fill drilling
comprising 19,051 meters from surface and 7,966 meters from underground was
completed to January 31, 2012, increasing confidence in the 24 to 30 months
mine plan. No significant faults were intersected over this period. In-fill
drilling will continue over the medium to longer term.
Quarter-on-quarter, ore development rates and production from stoping were
however less than plan due to the impact of the December 2011 Christmas break
as well as underground flooding of a number of development ends through
fissures following an unusually high seasonal rainfall In December 2011.
Permanent water reticulation infrastructure is under construction for
completion in Q2 2012, with interim measures implemented to manage the water
balance in the short term.
The combined development and stoping contained mined grade improved by 23%
from 1.22 g/t in Q3 2011 to 1.50 g/t; this was the result of more low profile
ore development than high profile ore development having occurred during the
period. Total Au production for the year came to 23,361 Au ounces,
approximately 6,000 Au ounces less than the revised guidance. Although we are
looking forward to a continued improved year on year performance at Burnstone,
we will continue to examine production guidance in the light of our
experiences in 2011.
The Metallurgical Plant continued to perform in-line with expectations, with
the decrease in processed tonnage being a result of the lower values of ore
tonnes hoisted from underground. Cash production costs reduced by 24% to
US$1,793/Au oz and by 11% to US$70 per tonne (Q3 2011: US$2,345 per Au oz and
US$79 per tonne). Cash costs are still impacted by the low average grade of
ore resulting from the high ratio of development ore to stoping material being
processed as well as the lower volumes than planned from stoping being mined
and processed. Improvements are expected as the grade increases to the average
reserve grade of the ore body and production nears steady state levels.
Other Corporate Updates
Of the total US$150 million restructured Term facility, the Company has drawn
US$130 million with the proceeds used to settle the principal due on Term Loan
1 and the standby-facility. As at December 31, 2011, the remaining proceeds
plus remaining funds available under this facility and near term cash sources
amounted to approximately $54 million in available cash resources.
On January 25, 2012 the Department of Water Affairs granted a water licence
that authorises the completion of the 88 kV power line between the Grootvlei
power station and the Burnstone mine that will provide a permanent feed of 51
MVA power to site. The authorization also allows for the completion of a
second line that will provide security of supply to the mine.
On a corporate note, Mr H. Wayne Kirk, has resigned as a non-executive
independent director of the Company for personal reasons, with an effective
date of January 30, 2012. The Board wishes to thank Wayne for his services
over the past 7 years.
The Company intends to release its financial results for the year ended
December 31, 2011 by the end of March 2012, at which time the production and
financial position guidance for 2012 will be updated.
President and CEO Ferdi Dippenaar commented: "Whilst our Nevada operations
returned a much improved performance compared to 2010, our Burnstone Mine
continues to face challenges in its production build-up programme. The focus
will be on improving the ore development rate required to deliver on the
production plan and with the benefit of the infill drilling completed over the
past 9 months which has improved our understanding of the ore body and the
good progress which is being made in improving the underground infrastructure,
we are looking forward to a much improved 2012."
For additional details on Great Basin Gold and its 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
About Great Basin Gold
Great Basin Gold (GBG: TSX; GBG: NYSE Amex; GBG: JSE) is a mining company
engaged in the exploration, development and production of gold properties. The
Company has two producing mines in the world`s two richest gold regions: the
Hollister operation on the Carlin Trend in Nevada, USA and the Burnstone
operation in the Witwatersrand goldfield of South Africa.
No regulatory authority has approved or disapproved the information contained
in this news release.
Cautionary Statement Regarding 2011 Preliminary Operating Results
We caution you that, whether or not expressly stated, all measures of the
Company`s fourth quarter and 2011 financial results and condition contained in
this news release, including production, sales and cash costs are preliminary
and reflect our expected 2011 results as at the date of the news release.
Actual reported fourth quarter and 2011 results are subject to management`s
final review as well as audit by the Company`s independent registered
accounting firm and may vary significantly from those expectation because of a
number of factors, including, without limitation, additional or revised
information and changes in accounting standards or policies or in how those
standards are applied. For a discussion of factors that may adversely affect
our financial results and condition, see the Company`s 2010 MD&A available on
the Company`s website or www.SEDAR.com. The Company will provide additional
discussion and analysis and other important information about its fourth
quarter and 2011 financial results and condition when it reports actual
results prior to March 31, 2012.
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 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.
Canada
6 February 2012
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Date: 06/02/2012 15:30:01 Produced by the JSE SENS Department.
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