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GBG
GBG
GBG - Great Basin Gold Limited - Unaudited results for first quarter ended
31 March 2012
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 ENDED
MARCH 31, 2012 AND 2011
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in thousands of Canadian Dollars)
March 31 December 31
2012 2011
$`000 $`000
Assets
Current assets
Cash and cash equivalents 43,548 25,749
Trade and other receivables 4,561 14,060
Inventories 25,379 19,694
Other current assets 2,237 2,404
75,725 61,907
Non-current assets
Inventories 8,488 7,998
Loan due from related party 2,243 3,784
Property, plant and equipment 763,560 720,213
Other assets 5,531 5,327
Deferred income tax assets 50,102 51,081
TOTAL ASSETS 905,649 850,310
Liabilities
Current liabilities
Trade and other payables 58,246 56,038
Current portion of long term debt 22,352 20,371
Current portion of other liabilities 3,107 3,050
83,705 79,459
Non-current liabilities
Long term debt 263,054 262,075
Other liabilities 31,158 31,197
Site reclamation obligations 6,081 6,011
Total liabilities 383,998 378,742
Equity
Share capital 876,843 833,643
Warrants 3,757 -
Contributed surplus 85,279 83,337
Accumulated other comprehensive loss (54,810) (73,764)
Deficit (389,418) (371,648)
Total equity 521,651 471,568
TOTAL LIABILITIES AND EQUITY 905,649 850,310
CONSOLIDATED STATEMENTS OF LOSS
For the three months ended March 31, 2012 and 2011
(Expressed in thousands of Canadian Dollars, except per share data)
2012 2011
$`000 $`000
Revenue 33,373 26,343
Cost of operations
Production cost (27,071) (13,696)
Depletion charge (1,060) (1,134)
Depreciation charge (3,387) (1,214)
Expenses
Exploration expenses (2,114) (2,901)
Pre-development expenses (4,742) (3,739)
Corporate and administrative cost (1,580) (2,282)
Environmental impact study (520) (437)
Foreign exchange gain - net 2,909 2,463
Salaries and compensation
Salaries and wages (2,439) (2,339)
Share based payments expense (1,019) (1,441)
Loss from operating activities (7,650) (377)
Interest expense (7,091) (5,071)
Interest income 422 389
Net interest expense (6,669) (4,682)
Loss from operating activities after net (14,319) (5,059)
interest
Impairment of loan due from related party (2,623) -
Loss on derivatives instruments - net (498) (14,832)
Loss before income taxes (17,440) (19,891)
Income tax expense (330) (450)
Net loss for the period (17,770) (20,341)
Basic and diluted loss per share (0.04) (0.05)
Weighted average number of common shares 476,464 431,624
outstanding (thousands)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the three months ended March 31, 2012 and 2011
(Expressed in thousands of Canadian Dollars)
2012 2011
$`000 $`000
Net loss for the period (17,770) (20,341)
Other comprehensive income (loss)
Cumulative translation adjustment 18,954 (26,649)
Other comprehensive income(loss) for the 18,954 (26,649)
period
Comprehensive income (loss) for the period 1,184 (46,990)
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the three months ended March 31, 2012 and 2011
(Expressed in thousands of Canadian Dollars)
2012 2011
$`000 $`000
Share capital
Balance - January 1 833,643 709,449
Employee share options - proceeds on - 2,221
issuing shares
Warrants - proceeds on issuing shares - 6,504
Proceeds on issuance of shares in public 43,200 81,270
offering (net of transaction costs)
Balance - March 31 876,843 799,444
Warrants
Balance - January 1 - 6,108
Proceeds on issuing shares - (1,066)
Proceeds on issuance of shares in public 3,757 -
offering (net of transaction costs)
Balance - March 31 3,757 5,042
Contributed surplus
Balance - January 1 83,337 77,676
Employee share options
Value of services recognized 1,942 1,870
Proceeds on issuing shares - (812)
Balance - March 31 85,279 78,734
Deficit
Balance - January 1 (371,648) (353,911)
Net loss for the period (17,770) (20,341)
Balance - March 31 (389,418) (374,252)
Accumulated other comprehensive (loss)
income
Balance - January 1 (73,764) 26,395
Other comprehensive income (loss) 18,954 (26,649)
Balance - March 31 (54,810) (254)
TOTAL SHAREHOLDERS` EQUITY 521,651 508,714
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2012 and 2011
(Expressed in thousands of Canadian Dollars)
2012 2011
$`000 $`000
Operating activities
Loss for the period (17,770) (20,341)
Items not involving cash
Production non-cash charges 826 170
Depletion 1,060 1,134
Depreciation 3,540 1,394
Exploration non-cash charges 20 59
Pre-development non-cash charges 269 388
Unrealized foreign exchange gain (3,103) (2,812)
Share based payments expense 1,019 1,441
Impairment of loan due from related 2,623 -
party
Loss on derivative instruments - net 498 14,802
Adjusted for
Interest expense 7,091 5,071
Interest income (422) (389)
Changes in non-cash operating working
capital
Trade and other receivables 9,511 1,784
Other current assets 171 183
Inventories (6,502) (8,540)
Trade and other payables 1,734 (3,826)
Net cash generated from (utilized by) 565 (9,482)
operating activities
Investing activity
Advance to related party (631) -
Purchase of property, plant and equipment (28,817) (36,534)
Interest income 107 170
Reclamation deposits (142) (361)
Net cash utilized by investing activities (29,483) (36,725)
Financing activities
Common shares and warrants issued for 46,957 88,117
cash, net of issue costs
Proceeds on issuance of debt 9,957 68,810
Repayment of debt (8,736) (53,686)
Interest expense (1,984) (1,128)
Net cash generated from financing 46,194 102,113
activities
Increase in cash and cash equivalents 17,276 55,906
Cash and cash equivalents, beginning of 25,749 12,855
period
Foreign exchange movement on cash and 523 (744)
cash equivalents
Cash and cash equivalents, end of 43,548 68,017
period
1. NATURE OF OPERATIONS
Great Basin Gold Ltd. is incorporated under the laws of the Province of
British Columbia and its registered address is 1108-1030 West Georgia
Street, Vancouver BC, Canada. Great Basin Gold Ltd., including its
subsidiaries ("Great Basin" or "the Company"), is a mineral exploration and
development company with two operating assets, both in the production build-
up phase, the Hollister Project on the Carlin Trend in Nevada, USA and the
Burnstone Project in the Witwatersrand Goldfields in South Africa. 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 month period ended March 31, 2012 are not
necessarily indicative of the results that may be expected for the full
fiscal year ending December 31, 2012. 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
The interim consolidated financial statements for the three months ended
March 31, 2012 has been prepared in accordance with IAS34, Interim financial
reporting. The condensed interim financial information should be read in
conjunction with the annual financial statements for the year ended December
31, 2011, which have been prepared in accordance with International
Financial Reporting Standards ("IFRS") as issued by the International
Accounting Standards Board ("IASB").
3. 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. Accordingly, they should be read in conjunction
with the Company`s most recent annual financial statements. The policies
applied in these condensed consolidated financial statements are based on
IFRS issued and outstanding as of May 11, 2012, the date the Board of
Directors approved the financial statements.
Accounting standards and amendments issued but not yet adopted
Refer to note 2 of the Company`s most recent annual financial statements for
a comprehensive listing of revised standards and amendments which are
effective for annual periods beginning on or after January 1, 2013 with
earlier application permitted. The Company has not yet assessed the impact
of these standards and amendments or determined whether it will early adopt
them.
4. ESTIMATES
The preparation of interim financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities,
income and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements, the
significant judgements made by management in applying the Company`s
accounting policies and key sources of estimation uncertainty were the same
as those that applied to the consolidated financial statements for the year
ended December 31, 2011.
5. SEGMENT DISCLOSURE
The Company operates in reportable operating segments to deliver on its
strategy to explore, develop and exploit 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.
Segment statement of income - March 2012
North South Tanzanian Other1 Total
American African operations $`000 $`000
operations operations $`000
$`000 $`000
Revenue 23,053 10,320 - - 33,373
Cost of operations
Production cost (13,042) (14,029) - - (27,071)
Depletion charge (1,004) (56) - - (1,060)
Depreciation (970) (2,417) - - (3,387)
charge
Expenses
Exploration (1,665) (118) (331) - (2,114)
expenses
Pre-development (4,742) - - - (4,742)
expenses
Corporate and - (24) (24) (1,532) (1,580)
administrative
cost
Environmental (520) - - - (520)
impact study
Foreign exchange - 45 (1) 2,865 2,909
gain (loss) - net
Salaries and
compensation
Salaries and - - - (2,439) (2,439)
wages
Share based - - - (1,019) (1,019)
Compensation
Profit (loss) from 1,110 (6,279) (356) (2,125) (7,650)
operating
activities
Interest expense (1,038) (1,637) - (4,416) (7,091)
Interest income - 413 - 9 422
Net interest (1,038) (1,224) - (4,407) (6,669)
expense
Profit (loss) from 72 (7,503) (356) (6,532) (14,319)
operating
activities after
net interest
Impairment of loan - - - (2,623) (2,623)
due from related
party
Profit (loss) on 861 (1,359) - - (489)
derivative
instruments - net
Profit (loss) 933 (8,862) (356) (9,155) (17,440)
before income
taxes
Income tax expense (330) - - - (330)
Net profit (loss) 603 (8,862) (356) (9,155) (17,770)
for the period
1 Corporate entities
Segment statement of income - March 2011
North South Tanzanian Other1 Total
American African operations $`000 $`000
operations operations $`000
$`000 $`000
Revenue 22,509 3,834 - - 26,343
Cost of operations
Production cost (11,239) (2,457) - - (13,696)
Depletion charge (1,105) (29) - - (1,134)
Depreciation (728) (486) - - (1,214)
charge
Expenses
Exploration (2,435) (124) (342) - (2,901)
expenses
Pre-development (3,739) - - - (3,739)
expenses
Corporate and - - (51) (2,231) (2,282)
administrative
cost
Environmental (437) - - - (437)
impact study
Foreign exchange - - (6) 2,469 2,463
(loss)gain - net
Salaries and
compensation
Salaries and - - - (2,339) (2,339)
wages
Share based - - - (1,441) (1,441)
Compensation
Profit (loss) from 2,826 738 (399) (3,542) (377)
operating
activities
Interest expense (156) (1,270) - (3,645) (5,071)
Interest income - 368 - 21 389
Net interest (156) (902) - (3,624) (4,682)
expense
Profit (loss) from 2,670 (164) (399) (7,166) (5,059)
operating
activities after
net interest
(Loss) profit on (8,451) 2,436 - (8,817) (14,832)
derivative
instruments - net
(Loss) profit (5,781) 2,272 (399) (15,983) (19,891)
before income
taxes
Income tax expense (450) - - - (450)
Net (loss) profit (6,231) 2,272 (399) (15,983) (20,341)
for the period
1 Corporate entities
Refined precious metals were sold to RK Mine Finance Trust I ("RK Mine")
under the terms of an off-take agreement.
Statement of financial position
March 31, 2012 North South Tanzanian Other1 Total
American African operations $`000 $`000
operations operations $`000
$`000 $`000
Total assets 175,214 665,287 45,237 19,911 905,649
Total 85,044 192,508 18 106,428 383,998
liabilities
December 31, North South Tanzanian Other1 Total
2011 American African operations $`000 $`000
operations operations $`000
$`000 $`000
Total assets 180,682 613,772 45,392 10,464 850,31
0
Total 100,198 174,941 19 103,584 378,74
liabilities 2
Additions to non-current assets2
North South Tanzanian Other1 Total
American African operations $`000 $`000
operations operations $`000
$`000 $`000
March 31, 2012 1,111 29,330 - 32 30,473
December 31, 2012 7,353 143,641 (117) 89 150,966
1 Corporate entities
2 Additions to non-current assets exclude other than financial instruments
and deferred tax assets
6. SUBSEQUENT EVENTS
Subsequent to March 31, 2012
(a) Public offering - overallotment
On April 5, 2012, the Company issued 10 million units for proceeds of $7.5
million upon closing the $50 million public offering`s overallotment (refer
note 10(b) of the full set of financial statements).
A unit consists of one Great Basin common share and one half of a purchase
warrant. The warrants are exercisable at $0.90 per warrant and will expire
on March 30, 2014. The Company paid the underwriters a fee of $0.4 million
and incurred other share issue costs of approximately $0.04 million.
(b) Related party transaction
Following negotiations between the Company, Tranter and Investec, a Term
sheet was agreed to during late April 2012 setting out the mutually
beneficial proposal whereby the Company provides Tranter with further
financial assistance over a period of 18 months to enable them to meet their
proposed restructured loan repayment obligations to Investec and thereby
remove their current breach on the loan agreement. In terms of the proposal
Investec will remove all cash margin requirements and also restructure the
repayment in such a manner that the required assistance from the Company
does not impact on its short term cash requirements. The parties are
currently working on finalizing the legal agreements and obtaining the
required approvals to enter into the binding legal agreements. It is
anticipated that this restructured loan and financial assistance agreement
will be executed before May 30, 2012.
Refer to note 6 of the full set of financial statements for information on
the loan advanced to Tranter.
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
Ronald W Thiessen
Director
Ground Floor, 138 West Street
Sandown, Johannesburg
South Africa
Tel 011 301 1800
Fax 011 301 1840
1500 Royal Centre, 1055 West
Georgia Street
Vancouver, BC Canada V6E 4N7
Toll Free 1 800 667?2114
www.grtbasin.com
15 May 2012
Johannesburg
Sponsor
Sasfin Capital
Date: 15/05/2012 12:30:01 Produced by the JSE SENS Department.
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