Great Basin Reports Progress in Quarter Ending September 30 2008
November 12 2008 - 8:00AM
PR Newswire (US)
VANCOUVER, Nov. 12 /PRNewswire-FirstCall/ -- Great Basin Gold Ltd.
("Great Basin" or the "Company") (TSX: GBG; AMEX: GBN; JSE: GBG)
announces results for the quarter ending September 30, 2008. Two of
the highlights subsequent to the quarter were the granting of the
New Order Mining Right for its Burnstone Project in South Africa
and the positive feedback on the third milling campaign completed
at Newmont's Midas Mine for the Company's Hollister Project in the
United States. The Company incurred a loss of CDN 15 cents compared
to the CDN 16 cents loss for the June 2008 quarter. No revenue was
recognized during the quarter as the batch processing of ore
material at Newmont's Midas Mill was still underway.
Pre-development expenses for both projects decreased from CDN$32.5
million to CDN$28.5 million quarter on quarter. On October 29,
2008, the Company announced that the Department of Minerals and
Energy had granted Southgold Exploration, the Company's wholly
owned subsidiary, a New Order Mining Right. This now allows the
Company to mine for gold, silver and aggregate in the Burnstone
Project area. Burnstone development costs will now be capitalized
as from November 2008. Good progress was also made with the
development of surface and underground infrastructure at the
Burnstone Project. At November 10, 2008, 2,019 meters of decline
development had been completed, with 181 meters of further
development remaining in the cross-cut to reef. The Company remains
on target to access the bulk mining area in early 2009. Sinking of
the vertical shaft at Burnstone commenced during April 2008, and at
November 10, 2008, the shaft had reached a depth of 165 meters
below surface. Twenty meters of the 80 meters of development
required for the construction of a clear water dam level have been
completed and additional activities are now focused on constructing
the permanent headgear as well as the installation of the main
sinking winder. On completion, a faster rate of shaft sinking will
be achieved. The final depth of the shaft is planned at 501 meters.
Although project funding to a total amount of CDN$122 million has
been recommended by the respective credit committees of Investec
Bank Ltd and Nedbank Capital, a division of Nedbank Ltd, final
approval is outstanding and is expected in the next few days. Of
the total project funding, an amount of CDN$17 million will be
available as standby-debt for potential cost overruns. To date,
CDN$26 million of the current facility with Investec Bank Ltd has
been drawn down. The total cost of the debt is approximately 16%.
In terms of the facility agreement, the Company is obliged to
contribute another CDN$35 million to the project before the next
draw down. Good progress was also reported from the Hollister
Property in Nevada, USA. Trial stoping continued on the Gweneviere
and Clementine veins with a total of 9,873 tons being extracted
during the quarter. A total of 11,239 tons at a head grade of 1.5
oz/t of gold and 12.0 oz/t of silver were milled from which a net
of 15,418 gold equivalent ounces were recovered(1). Recoveries of
88% and 93% were reported for gold and silver, respectively.
Approximately US$10 million of revenue is expected to be realized
from this campaign in the December quarter. Year to date, an
estimated total of 46,910 equivalent ounces have been extracted at
Hollister. A total of 17,225 tons at an estimated head grade of 1.4
oz/t of gold and 10 oz/t of silver have been stockpiled.
Underground cash costs totaled US$360/oz during the quarter, which
is a 17% decrease from the June quarter. The operation will benefit
from economies of scale as the tonnage build-up continues.
Metallurgical processing costs incurred on the ore treated
subsequent to the quarter end are based on a 20% of actual metal
recovery and equates to US$175/oz, inclusive of $10 in
transportation costs. The Company is currently reviewing
alternative facilities to treat its ore and plans to have an
improved arrangement in place by December 2008. To allow for
flexibility, underground waste development is ahead of schedule
with 10,379 feet being completed compared to the plan of 5,394
feet. This has resulted in an acceleration of pre-development
expenses. Positive surface exploration results continued with
follow up drilling in the newly discovered vein system in the
Hatter Graben area of the Hollister Property. Although assays are
pending, confirmation drilling continues to indicate the existence
of an interesting and prospective deposit. Although the Company
plans to cut back on all exploration expenditures, it is
anticipated that exploration in this exciting area will continue.
President and CEO Ferdi Dippenaar commented: "Although we have made
good progress in all areas of our business, recent events in the
capital market have focused us on preserving our cash resources and
allocating expenditures in areas that will ensure that we meet
production targets. We will continue with limited surface
exploration, mainly on the Hollister Property in Nevada while the
weather allows it. In the other regions, we have cut back on
expenditures until the cash position of the Company improves. At
Burnstone, we are probably two months away from intersecting the
reef in the decline, and mining will commence soon after. We are in
the fortunate position, as we could see revenue from both
operations within the next 6 months." Johan Oelofse, Pr.Eng.,
FSAIMM, Chief Operating Officer of Great Basin and a qualified
person has reviewed this release on behalf of the Company.
------------------------------------- (1) Gold equivalent is
calculated at metal prices of US$828.96/oz for gold and US$12.22/oz
for silver. No regulatory authority has approved or disapproved the
information contained in this news release. Cautionary and
Forward-Looking Statement Information This release includes certain
statements that may be deemed "forward-looking statements". All
statements in this release, other than statements of historical
facts, that address possible future commercial production, reserve
potential, exploration drilling results, development, feasibility
or exploitation activities and events or developments that Great
Basin expects to occur are forward-looking statements. Although the
Company believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are
not guarantees of future performance and actual results or
developments may differ materially from those in the
forward-looking statements. Factors that could cause actual results
to differ materially from those in forward-looking statements
include market prices, exploitation and exploration successes, and
continued availability of capital and financing, and general
economic, market or business conditions. Investors are cautioned
that any such statements are not guarantees of future performance
and those actual results or developments may differ materially from
those projected in the forward-looking statements. For more
information on the Company, Investors should review the Company's
annual Form 40-F filing with the United States Securities and
Exchange Commission and its home jurisdiction filings that are
available at http://www.sedar.com/. DATASOURCE: Great Basin Gold
Ltd. CONTACT: on Great Basin and its gold properties, 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, 1-888-633-9113; Barbara
Cano at Breakstone Group in the USA, (646) 452-2334
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