GREAT BASIN REPORTS THIRD QUARTER RESULTS
VANCOUVER, Nov 16, 2010 /PRNewswire via COMTEX/ -- Great Basin Gold Ltd. ("Great
Basin" or the "Company") (CA:GBG)(GBG)(jse:GBG) announces results for the third
fiscal quarter which ended September 30, 2010.
Highlights at its nearly-completed Burnstone Project in South Africa include:
on-site metallurgical plant commissioning underway;
achieved first gold pour on October 31, 2010; and
completed vertical shaft equipping and licensing of hoists and infrastructure.
Highlights at its Hollister Project in Nevada, USA, include:
improved performance for both trial mining and Esmeralda mill processing;
14% increase in Measured and Indicated resource to 1.6 million gold equivalent
ounces (Au eqv oz)1; and
bonanza grades encountered in trial mining at Blanket Zone.
Earnings for the quarter were negatively impacted by extraordinary charges that
included a CDN$7 million fair value charge on the zero-cost-collar hedge program
executed in August 2010, a stockpile adjustment of CDN$1.3 million and a negative
adjustment of CDN$3 million to revenue following the completion of the milling
campaigns. Excluding these charges results in an adjusted loss per share of
CDN$0.03, which is a 67% improvement on the CDN$0.05 loss per share reported in
the third quarter of 2009.
Hollister Project
The Company sold 13,702 Au eqv oz2 recovered through its trial mining activities
during the quarter. A CDN$3.1 million negative adjustment upon completion of
milling of Hollister ore at Newmont facilities and a further adjustment related
to the stockpiles were recorded in the quarter, resulting in a net revenue of
CDN$12 million. The refurbishment project at the Esmeralda mill was completed
during the quarter, following a 3-week shutdown of the mill in July 2010, which
had a negative impact on the mill capacity, recoveries and cash production costs.
Cash production costs amounted to CDN$854 per Au eqv oz for the quarter. Mill
throughput at Esmeralda has subsequently improved to exceed 9,000 tons per month,
and cash production costs have decreased to less than CDN$600 per Au eqv oz for
the months of September and October 2010.
Contained Au eqv oz extracted through trial mining activities decreased by 22%
quarter-on-quarter: Ore tons extracted during the quarter were marginally lower
(803 tons). The average grade of 1.07 Au eqv oz per ton (36.8 g/t) of the
material extracted (q2 2010:1.33 Au eqv oz/ton) was the main contributor to the
decrease in contained Au eqv oz extracted. The average grade of the material
extracted during the quarter was in-line with Q1 2010 and the average grade
achieved in 2009, whereas the average grade of material extracted in Q2 2010 was
higher than the norm.
The Esmeralda mill's recoveries improved by 5% to 87% for gold and by 11% to 66%
for silver. A total of 19,611 tons were processed in the quarter, with a recovery
of 16,778 Au eqv oz. Performance is expected to improve further as the
optimization project in the mill has now been completed.?
On September 30, 2010, the ore stockpile contained 10,879 tons with an estimated
metal content of 7,717 Au eqv oz, which includes 4,769 tons containing an
estimated 850 Au eqv oz that was delivered to the Jerritt Canyon mill in 2008.
The latter material will be treated in the fourth quarter and our need for third
party milling arrangements will be concluded.?
During the third quarter, trial stoping on the Clementine #18 vein progressed
upwards to the unconformity horizon with overlying Tertiary volcanic strata. Lift
43 followed the structures controlling vein #18 at depth, and exposed these
structures in heavily clay and iron oxide altered volcanic tuffs. Spectacular
channel sample results, averaging 270 oz/ton gold (9,277 g/t) undiluted and 66.4
oz/ton gold (2,404 g/t) diluted over the 3.5-foot stope width were received along
the entire 180 feet (~55 meters) of strike exposure (see Great Basin news release
dated November 9, 2010).?
The dimensions of this zone of mineralization are being established through a
combination of short diamond drill holes and underground cross-cut and raise
excavations. Previous work on the Blanket zones elsewhere in the mine was based
on drilling. Individual assays range from 0.1 to 17 oz/ton gold (3.4 to 582.9
g/t) and intersections are generally broad zones with geometry of approximately
30 feet in thickness, 200-300 feet in length and 50-100 feet in width. These tend
to occur in tuffaceous zones (which are more permeable) at or close to the base
of the volcanic units. There is a clear relationship between these very high
grade zones (that exist within these grade shells) and the underlying structures
that control epithermal vein gold and silver mineralization.
Burnstone Project
For Burnstone, development costs of CDN$67 million were capitalized in the
quarter compared to CDN$69 million in the quarter ended June 30, 2010.
Pre-operating expenses of CDN$20 million for the quarter are included in the
capitalized development cost due to the project not achieving commercial
production. As the bulk of the expenditures relating to the construction of the
Burnstone mill have now been completed and the focus has moved to development
accessing mining areas, capital expenditures are expected to be lower,
approximately CDN$45 million, in the fourth quarter.
After being connected to the national power grid on August 8, 2010, electrical
reticulation to the general surface infrastructure, vertical shaft, underground
infrastructure, ventilation shafts and the metallurgical plant was successfully
completed. Good progress is being made with the metallurgical plant with the
crusher section, Semi Autogenous Grinding and ball mills, gravity circuit and
first three Carbon-In-Leach tanks commissioned. The current focus is completion
of the carbon, cyanide, elution and gold room commissioning. The first gold pour
took place on October 31, 2010 from gold recovered through the gravity circuit.
Good progress also continues to be made with the development of surface and
underground infrastructure with shaft equipping to surface completed during
August. After completion of the shaft loading bins, conveyors and other
equipment, hoisting commenced in the shaft on November 2, 2010.
At November 10, 2010, a total of 15,842 feet (4,830 metres) of on-reef
development has been completed and good continuity continues to be shown in the
exposed reef. The Long Hole Stoping trials are progressing well and the rate of
mining is increasing as more mining areas become available. The focus in Block B
is on establishing more stopes, while activities in Block C Middle and Upper are
mainly focused on reef development; these additional access points will allow for
an increase in opening up higher grade mining areas. A total of approximately
192,000 tonnes has been accumulated on the ore stockpiles, which is being used
for mill commissioning.?
Corporate
By October 15, 2010, approximately 57.5 million warrants (strike price of
CDN$1.60) had been exercised, resulting in CDN$92 million being added to
treasury.
President and CEO Ferdi Dippenaar commented: "The third quarter results contain a
number of out of the ordinary activities, including the completion of the third
party milling campaigns. These matters have now all been dealt with and we can
look forward to a much improved performance from our Nevada operations in the
fourth quarter. It will be the first period for which we will report results as
one operational unit, with all of the material extracted processed though our own
mill. This will more accurately reflect our cash cost structure and ensure full
exposure to the gold price by eliminating the impact of toll milling and ore
purchase agreements. We also expect more information on the extent of tonnage and
grades in the higher grade area above Clementine Vein #18.?
"Although good progress was made with the commissioning of the metallurgical
plant at our Burnstone Project in South Africa, the impact of receiving the
supply of electricity four months later than anticipated has had a negative
impact on our production plans, with a maximum of 10,000 ounces now expected to
be sold in 2010. Our estimates for 2011 have not been affected."
Great Basin is a mining company engaged in the exploration and development of
gold properties. The Company is currently focused on bringing two mines in the
world's two richest gold producing regions into production. The Hollister gold
project is located on the Carlin Trend in Nevada, USA and the Burnstone gold mine
is located in the Witwatersrand Basin goldfield of South Africa.
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.
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 Gold, investors should review the
Company's annual Form 40-F filing with the United States Securities and Exchange
Commission sec.gov and home jurisdiction filings that are available at
sedar.com.?
1 At a 0.25 oz/ton cut-off, measured and indicated resources are 1.12 million
tons grading 1.305 oz/ton gold and 10.3 oz/ton silver. For further details see
Great Basin news release dated September 9, 2010.
2 Gold equivalent ounces here and elsewhere in this document are calculated using
a gold price of US$1,000 per ounce and a silver price of US$15 per ounce.
SOURCE Great Basin Gold Ltd. |
