Great Basin Gold Updates Hollister Mineral Resource and Reserve Estimates and
Operating Results for Hollister and Burnstone
VANCOUVER, Sept. 4, 2012 /PRNewswire via COMTEX/ -- Great Basin Gold Ltd. ("Great
Basin Gold" or the "Company"), (CA:GBG) (nyse mkt:GBG) (jse:GBG) announces
updated mineral resource and reserve estimates for the Company's Hollister Gold
Project ("Hollister") on the Carlin Trend in Nevada, USA as at June 30, 2012. The
updated mineral resources and reserves reflect depletion in excess of 370,000
tons which yielded approximately 400,000 gold equivalent ounces ("Au eqv oz")
since commencement of trial mining in 2008. The underground drilling program over
the past 18 months has been focused on increasing confidence in the estimates of
mineral resources and reserves to allow for improved mine planning and
forecasting. In addition, the underground drilling focused on delineating
material from the Tertiary volcanic-hosted disseminated gold mineralization and
the basement meta-sediment hosted gold-silver low sulfidation epithermal veins.
Future drilling will seek to increase the mineral resource and reserves to extend
the life of the project.
Mineral Resources
The mineral resource estimate for Hollister reflects important additional
information established from on-going underground drilling and trial mining since
the last resource estimate in September 2010. The resource estimate, which is
based on an in-situ epithermal vein wireframe model and a Tertiary-hosted
mineralization wireframe and grade shell model, is now informed by 12,312 grade
intersections, from a combination of 630 surface, 941 underground stope
delineation and infill/cover boreholes, and 5,547 ore control channel samples
taken during trial mining. The drilling program provided infill data to further
delineate stopes for trial mining, which significantly improved the understanding
of the lateral and vertical geological continuity of the vein systems. Trial
mining has generated geological mapping and channel sampling data that is being
used for empirical reconciliation of the resource wireframe model versus actual
excavated vein. As a result, more stringent parameters can now be applied to
Measured and Indicated classifications.
The current estimates are based on drilling, channel sampling and depletion of
material mined to June 30, 2012. The informing data obtained from the underground
drilling campaign and trial mining to date has increased the confidence in the
resource estimate and also resulted in a decrease in the estimated minable vein
width. The combination of more rigorous geological and vein modeling with
narrower vein widths (averaging 1.6 feet), resulting in reductions in the
estimated epithermal vein resources included in the model. Silver ("Ag") grades
included in the resource update have also declined as a result of the inclusion
of the Tertiary volcanic hosted disseminated material where trial mining has
indicated a lower Au/Ag ratio.
CLASSIFICATIONCut-off Tonnes TonsAuAuAu oz AgAgAg Oz Au Eq
oz/t(000)(000) oz/tg/t(000) oz/t g/t(000) Oz
(000)
Veins Measured0.101701870.922 31.60 1735.81971 079 196
0.151461611.054 36.11 1706.52211 039 192
0.201261391.192 40.85 1667.22481 006 187
Veins Indicated0.107298040.404 13.86 3251.9631 488 357
0.155365910.506 17.33 2992.2761 309 327
0.204244670.593 20.34 2772.5861 175 302
Tertiary Indicated 0.102442690.939 32.20 2522.069539264
0.151321451.637 56.13 2383.6122516249
0.2086952.405 82.47 2295.2179497240
Total Indicated0.109731 073 0.538 18.46 5771.9652 027 621
0.156677360.729 24.99 5362.5851 825 575
0.205105620.900 30.87 5063.01021 672 542
Total M & I0.101 1431 260 0.595 20.41 7502.5853 106 817
RESOURCES
0.158138970.787 26.99 7063.21102 864 767
0.206367010.958 32.85 6723.81312 678 729
CLASSIFICATIONCut-off Tonnes TonsAuAuAu Oz AgAgAg Oz Au Eq
oz/t(000)(000) oz/tg/t(000) oz/t g/t (000) Oz
(000)
Veins Inferred0.105085600.254 8.721421.136590155
0.153243580.329 11.29 1181.243446127
0.202242470.399 13.66 991.449351106
Tertiary Inferred 0.107778560.204 7.011750.311282181
0.152192410.426 14.62 1030.930209 107
0.201321460.593 20.33 871.240171 90
Total0.101 2851 416 0.224 7.683170.621872336
Inferred
RESOURCES
0.155435990.368 12.63 2211.137654235
0.203573930.471 16.14 1851.345521196
Notes:
1 Gold equivalent ounces (Au eqv oz) were calculated by using the
following metal prices: US$1,400/oz
for Au and US$30/oz for Ag. Metallurgical recoveries are not applied to
resource values; contained
metal estimates assume 100% recoveries.
2 Parameters for Measured = 50 feet (1/2 range), minimum number of
informing samples 12;
Indicated = 100 feet (1 x range), minimum number of informing samples 8;
Inferred = 750 feet
(7.5 x range), minimum number of informing samples 4.
Exploration Progress
Over the last year, work has continued on the collation and review of all
geophysical, geological and surface drilling data for the property, with the
intent of better defining the basement structures that control mineralization at
Hollister. Detailed surface mapping has also identified hydrothermal vent and
eruptive centers - areas that indicate the existence of long-lived geothermal
activity and potential additional deposition of Au-Ag mineralization at depth.
Targets outside the Clementine-Gwenivere vein systems have also been delineated
from this work, and will be prioritized for follow-up. Drilling (which has been
approved by the Bureau of Land Management) is initially planned for the Hatter
target (to upgrade inferred resources to mineral resource status) and the Velvet
- Butte areas that locate north and north-west of the current underground
activity. The Hatter target requires a minimum of eight boreholes to establish an
additional Inferred mineral resource. The mineralization at Hatter manifests as
two distinct N-S and E-W vein systems, which may indicate different phases of
mineralizing fluids.
Mineral Reserves
Within these mineral resources, mineral reserves have been delineated that are
available for mining as at June 30, 2012, providing an update to the estimate in
January 2011. The mineral reserves have been estimated at a cut-off grade of 0.25
oz/t Au for the epithermal veins and 0.15 oz/t Au for the Tertiary
mineralization. The cut-off grades are based on an analyses of fully diluted pay
limit (break even) grades which incorporate a gold and silver price of US$1400/oz
and US$30/oz, respectively, and estimated costs for mining, ore transport,
milling, and royalties. The break even grade for epithermal veins is 0.42 oz/t
Au, and for the Tertiary mineralization 0.25 oz/t Au. Mineral reserves total 0.46
Mt grading on average 0.88 oz/t Au and 2.9 oz/t Ag yielding 0.50 million Au eqv
oz.
ClassificationTonnes TonsAuAuAu oz AgAgAg oz Au eqv Au eqv
(000)(000) oz/tg/t(000) oz/t g/t (000) oz/toz
(000)
Veins Proven901000.976 33.46 984.7163 4741.078108
Veins Probable2662950.641 21.98 1892.2766520.688203
Tertiary Probable 1091211.395 47.82 1682.9983441.587191
Total Probable3754160.860 29.48 3572.4829960.950394
TOTAL P & P4655160.882 30.26 4552.99814700.974502
RESERVES
Notes:
1 Mineral reserves are fully diluted, and grades adjusted for
metallurgical recoveries of Au (92%)
and Ag (75%).
2 Metal prices of US$1,400 Au and US$30 Ag have been applied.
It is important to note that the mineral reserves only address that material
available for mining above the 4930 Level, which is the current lower development
level on the operation. The mining widths that have been planned are believed to
be achievable based on previous trial mining activities on the epithermal vein
system and the overlying Tertiary volcanic "disseminated" style. The Tertiary
mineralization occurs in broad pod-like style zones of gold concentration that
are generally developed around very high grade, narrow structures, sometimes
linked to underlying epithermal veins. The maximum stope design of 8 feet is
considered very conservative, and, coupled with the 10 foot pillar left around
these areas, offers significant tons and grade upside through mining method
optimization. Considerable upside exists with development of the Tertiary
reserves as an important ore source through a combination of maximizing access
and stoping options from the trackless infrastructure afforded by the spiral
ramp, as well as optimization of pillar/backfill designs, which will maximize
profitable extraction.
Continued exploration drilling in close proximity of the current mine
infrastructure is expected to extend the currently estimated minimum five year
mine life with additional vein structures delineated. Step-out drilling targeted
to increase the Mineral Resource of the project can be accelerated once the
Environmental Impact Study is completed which is expected to occur this year
The Company is currently preparing an updated detailed mine schedule based on the
updated reserves A preliminary updated economic analysis of the Nevada operations
based on the updated reserves and using metal prices of US$1,400 Au/oz and US$30
Ag/oz indicates a range of after-tax net present values ("NPV") at June 30, 2012
of approximately US$170 to US$190 million based on a 5% discount rate and a five
year life of mine. Increasing the gold price over the life of mine to US$1,500/oz
results in an NPV range of approximately US$190 to US$210 million.
Operational Performance
Nevada
Preliminary production results for July and August 2012 indicate an improvement
relative to the previous quarter with an average of 6,500 Au eqv oz sold per
month, compared to an average of 5,000 Au eqv oz per month sold in Q2 2012. The
0.69 Au eqv oz/t average grade from trial mining for July and August 2012 also
compares favorably to the 0.63 Au eqv oz/t trial mined in Q2 2012. Further
improvement is expected as additional higher grade stopes from the tertiary
material becomes available. The Esmeralda mill is performing as planned with
recoveries of 92% Au and 48% Ag thus far for Q3 2012. Cash costs for Q3 2012 are
expected to benefit from the lower milling costs now that dor? has been capable
of being poured on site since June 2012.
Burnstone
Ore development in July and August 2012 averaged 888 meters per month, a 50%
improvement on the monthly average of 590 meters achieved in Q2 2012. The
improvements to the temporary water reticulation system reported on earlier had a
positive impact on ore development. The Company will be taking over the
underground waste development following the termination of this contract with
Grinaker Lta in August 2012, which is expected to yield an estimated cost saving
of $1.2 million per month as well as improved efficiencies from development teams
and trackless equipment. Five thousand and fifty (5,050) square meters was stoped
during July and August 2012 with focus remaining on development until phase 1 of
the permanent water reticulation system is completed by the end of September
2012. Shaft availability has improved with the completion of the spillage decline
down to shaft bottom during August 2012. 180,000 tonnes at an average head grade
of 1.2 g/t were processed by the plant for July and August 2012 with 4,280 ounces
sold during the period. The head grade of material delivered to the plant remains
impacted by the development/stoping ratio which is only expected to improve once
stoping increases later on in 2012.
Strategic Review and Liquidity Challenges
The Special Committee of the Board continues to evaluate refinancing and asset
sell-down alternatives and is endeavouring to work with all stakeholders to
achieve an acceptable resolution of its near term liquidity challenges. A range
of viable options remain possible however the Company is not yet in a position to
provide any guidance as to if and when an announcement in this regard will be
made.
Lou van Vuuren, interim CEO, commented: "Our ongoing delineation drilling and
trial mining results continue to confirm the prospectivity of the Hollister
property, and has also increased our confidence in the reported resources and
reserves. With the completion in the June 2012 quarter of the Upper Zone spiral
ramp as well as 4930 Level, which provides a new access level to the mine and the
higher grade Clementine # 18 and 20 veins for trial mining, the focus will
continue to be on better delineation of mineralization that is accessible from
current underground infrastructure. As underground development continues, there
will be further opportunities to drill-test for extensions to a number of high
grade zones that have been identified from the evaluation of the Butte
bounding-fault structure as well as Hatter Graben system. Operationally we are
seeing an improvement with more expected as the Nevada operations return to
planned production levels and Burnstone completing the remaining critical
infrastructure. The Company continues to receive considerable interest in its
projects from qualified financiers and industry players and with the information
in this news release now having been disseminated we will be in a position to
accelerate our strategic process."
The mineral reserve estimates were completed by Martin Cooper, MGSSA, and the
mineral resource estimates by Freddie de Bruin and John Murgatroyd, Pr.Sci.Nat.,
all of Deswik Mining and Resource Consultants, under the supervision of Phil
Bentley, Pr.Sci.Nat., Great Basin Gold's Vice President: Geology & Exploration
and Dana Roets, FSAIMM, Great Basin Gold's Chief Operating Officer, both
Qualified Persons as defined by Canadian National Instrument 43-101 (Disclosure
Standards for Mineral Projects), who have reviewed and approved the technical
information in this news release.
Lou van Vuuren CEO (interim)
Samples collected from the Hollister Development Block Project are
delivered to Inspectorate America Corporation (Inspectorate) in Sparks,
Nevada.
Information Concerning Estimates of Measured, Indicated and Inferred Resources
This news release also uses the terms "measured resources", "indicated resources"
and "inferred resources". The Company advises investors that although these terms
are recognized and required by Canadian regulations (under National Instrument
43-101 Standards of Disclosure for Mineral Projects), the U.S. Securities and
Exchange Commission does not recognize them. Investors are cautioned not to
assume that any part or all of the mineral deposits in these categories will ever
be converted into SEC-recognised reserves. [Some are reserves under Canadian
standards.] In addition, 'inferred resources' have a great amount of uncertainty
as to their existence, and economic and legal feasibility. It cannot be assumed
that all or any part of an Inferred Mineral Resource will ever be upgraded to a
higher category. Under Canadian rules, estimates of Inferred Mineral Resources
may not form the basis of feasibility or pre-feasibility studies, or economic
studies except for Preliminary Assessment as defined under 43-101. Investors are
cautioned not to assume that part or all of an inferred resource exists, or is
economically or legally mineable.
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 related to the Company's liquidity challenges and need for near
term financing
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. |
