VANCOUVER, Feb. 25 /PRNewswire-FirstCall/ -- Great Basin Gold Ltd.
("Great Basin" or the "Company") (TSX: GBG; NYSE Amex: GBG; JSE:
GBG) announces an operational update for its fourth quarter, along
with unaudited financial results for the quarter and the financial
year ended December 31, 2009. Highlights include operational
improvements at the Company's newly refurbished Esmeralda Mill
facility for the Hollister Project in Nevada, early successes with
long hole stoping trial-mining methods at both the Hollister and
Burnstone projects and good progress in the construction of the
metallurgical facility, vertical shaft and underground
infrastructure at the Burnstone Project in South Africa. Great
Basin incurred an estimated loss of CDN$0.03 per share for the
fourth quarter as compared to CDN$0.05 per share for the quarter
ended September 30, 2009. Year-on-year, the loss per share
decreased from CDN$0.40 per share in 2008 to CDN$0.16 cents per
share in 2009. The cost reduction program initiated in October 2008
resulted in decreased expenditures for exploration, pre-development
and administration. The Company had working capital of $92 million
on December 31, 2009 of which $89 million is cash and cash
equivalents. At Hollister, ore tons and gold equivalent ounces
extracted from trial mining activities during the fourth quarter
were lower than planned due to several factors including more
difficult mining conditions and an approximately two week
suspension of trial mining in order to review the causes of, and
take corrective action in connection with a worker falling accident
during November which, fortunately, resulted in only a minor
injury. A total of 16,785 tons of ore containing 20,660 Au eqv
oz(1) were extracted which is, nevertheless, a 15% improvement over
the third quarter of 2009. A total of 81,211 Au eqv oz was
extracted over the 2009 year. Cash costs per ton mined for the
quarter were adversely impacted by the lower than planned tonnage;
however, good progress was still made on reducing the operating
costs, and the cash cost per ore ton extracted from underground
improved 12% from US$480 in 2008 to US$423 in 2009. In addition,
changes in various areas have been made, including management and
supervision, which have already resulted in improved performance
for the first two months of 2010. A total of 161,518 Au eqv oz has
been extracted at Hollister since the commencement of trial-mining
activities in June 2008. The average project head grade of 1.34 Au
eqv oz per ton (45.9 g/t) to date remains in excess of the planned
grade of 1.0 Au eqv oz per ton. Delineation and exploration
drilling conducted during 2009 has provided valuable information on
structure in the ore body that is being incorporated into the
medium and longer term mine plan. Following the first phase of
refurbishment and commissioning of the Esmeralda mill in September
2009, the focus has been on improving the mill's efficiencies. Some
8,070 ore tons, containing an estimated 6,866 Au eqv oz, were
processed through the Esmeralda mill processing facilities during
the quarter. Based on a recovery factor of 83%, this resulted in
extraction of 5,676 Au eqv oz. Further near-term operational
improvements underway are expected to yield higher mill recoveries.
Although the mill is able to treat approximately 350 tons per day,
current carbon stripping capacity is insufficient due to the higher
metal content. A second carbon stripping facility will be installed
by the end of March 2010, thereby doubling the carbon stripping
capacity. No revenue was booked during the fourth quarter and, as a
result, the Hollister ore stockpile at December 31, 2009 contained
41,683 tons with an estimated metal content of 41,446 Au eqv oz,
and a further 5,676 Au eqv oz were in process in the Esmeralda mill
circuit. Dore bars are currently being poured off-site and the
first refined bullion was sold in early February 2010. The
re-introduction of the refurbished Merrill-Crowe circuit and
furnace will see all dore being poured on-site as of the start of
the second quarter of 2010. A number of alternatives are currently
being considered to expedite toll processing or sale of excess ore
on the stockpile. At Burnstone, good progress continues to be made
with the development of surface and underground infrastructure. As
at December 31, 2009, 8,292 ft (2,528 m) of decline development had
been completed and a total of 2,886 ft (880 m) of on-reef
development was completed during the quarter, and 3,710 ft (1,131
m) to date, with good continuity in the reef exposed. The initial
long hole stoping trials have delivered positive results thus far,
and the Company plans to implement this higher level of mechanized
mining on a trial basis over a period of 9 to 12 months before
final evaluation. The current focus is the establishment of more
mining stopes in Block B, with activities in Block C mainly focused
on reef development. At December 31, 2009, in excess of 60,000 tons
have been accumulated in ore stockpiles. Sinking of the vertical
shaft at Burnstone has continued and, at February 21, 2010, the
shaft had reached a depth of 1,476 ft (450 m) below surface with
115 ft (35 m) remaining to shaft bottom. The final depth of the
shaft is planned at 1,591 ft (485 m). Development, totaling 902 ft
(275 m), on 40 Level Station has been completed. Development of the
41 Level Station commenced with 430 ft (131 m) being completed and
436 ft (133 m) remaining before the sinking to shaft bottom
re-commences, which is planned for mid-March 2010. The
refurbishment of the Burnstone mills continues to be on schedule.
All civil construction for the metallurgical plant facility will
have been completed by mid-March 2010, which will allow for the
delivery of the mills as well as an accelerated rate of
construction of metallurgical plant infrastructure. President and
CEO Ferdi Dippenaar commented on the quarter: "The number of gold
equivalent ounces extracted through trial mining from our Hollister
Mine project in the December quarter was somewhat lower than
planned due to several factors; however I am pleased to report that
the pace has picked up significantly in early 2010. Overall, the
Company continues to make good progress at both its gold
development projects. Burnstone, in particular, is entering an
extremely exciting phase of its development, with vertical shaft,
mills and metallurgical plant converging on completion over the
next several months." Johan Oelofse, Pr.Eng., FSAIMM, Chief
Operating Officer of Great Basin and a Qualified Person, as defined
by regulatory policy, has reviewed and assumed responsibility for
the technical information contained in this release. Ferdi
Dippenaar President and CEO 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
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, investors should review the Company's annual Form 20-F
filing with the United States Securities and Exchange Commission
http://www.sec.com/ and home jurisdiction filings that are
available at http://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 cost per ounce produced 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 of test mining
at the Hollister project. It is determined by dividing the relevant
mining and processing costs excluding royalties by the ounces
produced in the period. There may be some variation in the method
of computation of "cash cost per ounce produced" as determined by
the Company compared with other mining companies. In this context,
"ounces produced" includes in-process and dore inventory along with
ounces of gold sold in the period. Cash costs per ounce produced
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 of test mining at
Hollister. As a Non-GAAP Financial Measures cash cost per ounce
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP. There are
material limitations associated with the use of such Non-GAAP
measures. ---------------------------- (1) Gold equivalent ounces
used here, and elsewhere in this document, was calculated using a
gold price of US$800 per ounce and a silver price of US$12 per
ounce. DATASOURCE: Great Basin Gold Ltd. CONTACT: on Great Basin
and its gold properties as well as further particulars about the
financial and operational update, please visit the Company's
website at http://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
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