Great Basin Gold provides operational update
VANCOUVER, Oct. 24, 2011 /PRNewswire via COMTEX/ -- BURNSTONE CONTINUES TO
IMPROVE
Great Basin Gold Ltd. ("Great Basin Gold" or the "Company"),
(CA:GBG)(GBG)(jse:GBG) reports an operational update for the three months ended
September 30, 2011. The Company will file its Management Discussion and Analysis
and interim financial statements for the third quarter ("Q3 2011") on November
15, 2011 and will hold an earnings call on November 16, 2011 at 9 am (EST).
Hollister
The Nevada operations produced 26,045 Au eqv ounces1 from trial mining activities
during the quarter (q2 2011:26)(q2 2011:757 Au eqv ounces). During the quarter,
ore tonnes mined from the Hollister project increased 5% to 26,474 (q2
2011:25)(q2 2011:297 tonnes) and tonnes processed at the Esmeralda mill increased
by 34% from 22,237 to 29,869. The contained grade of 0.9 Au eqv oz/t was lower
than the 1.35 Au eqv oz/t reported for the previous quarter, but is in-line with
the reserve grade of the Hollister ore body. Notwithstanding the significant
increase in tonnes processed during the quarter, gold and silver recoveries at
the Esmeralda mill remained within the targeted levels at 92% Au and 74% Ag,
respectively. The installation of the acid wash and carbon regeneration system at
the Esmeralda Mill was completed during the first week in October 2011 and dor?
is planned to be poured on site starting at the end of October 2011. Only 22,790
Au eqv ounces were sold during the quarter (q2 2011:34)(q2 2011:522 Au eqv
ounces) with 6,850 Au eqv ounces remaining at the refiner that will be sold and
the revenue recognized in Q4 2011.
Primary waste development was again focused on the Blanket Zone ("BZ") spiral
ramp, the BZ Alimak raise, and the 5400 BZ I-Drift. During the quarter, the BZ
Ramp achieved 1,136 feet (344 meters) of advance; 204 feet (62 meters) of
development remained at quarter end to complete the ramp. The 5400 I-drift, which
originates from the BZ Alimak raise, was advanced 169 feet (51 meters) to the
east during the quarter, with 161 feet (49 meters) remaining to reach the +1 opt
Au grade shells modelled from surface and underground drilling for the 3000N 1W
area.
___________________________ 1 Gold equivalent ("Au eqv") calculations use
US$1,400/oz for Au and US$30/oz for Ag.
Burnstone
Operational improvements continued at Burnstone, with mechanized ore development
increasing by 80% quarter on quarter to 2,786 meters (q2 2011:1)(q2 2011:550
meters). Ore to waste development ratio also improved, with ore representing 67%
of total development during the quarter (q2 2011:45% ore development). Following
increased infill and cover drilling to identify geological structures and
faulting, improved geological data and refinement of interpretations, waste
development was reduced from 1,872 to 1,403 meters during Q3 2011.
Further optimization of the Long Hole Stoping mining method continued during the
period with a revised stope lay-out design implemented that increases the square
meters available for stoping for each meter of ore development by 88% from 9 to
over 17 square meters. The revised layout, which could allow larger stopes to be
mined, is still in its trial phase but positive preliminary results are already
evident. This stope design change would have a short term impact as fewer stopes
would be available, initially, for mining because of the increase in development
meters required to open up the larger stopes. However, over the longer term this
change could positively impact the ore tonnes mined per meter developed as well
as cash costs on a per ton and per ounce basis. Notwithstanding the impact of
opening up the larger stopes, the stoping square meters increased by 45% to 7,408
square meters during the quarter (q2 2011:5)(q2 2011:122 square meters), with
stoping widths of between 60 - 80 cm being achieved on a consistent basis. The
contained gold grade from stoped material also increased by 39% to 3.57 g/t (q2
2011:2.57 g/t). The contained gold grade from development ore also increased by
25% to 0.80 g/t (q2 2011:0.64 g/t). Stope block availability is expected to
increase steadily during Q4 2011.
The Metallurgical Plant continued to perform in-line with expectations, with
209,224 tonnes processed during the quarter (q2 2011:202)(q2 2011:660 tonnes).
Although the last of the lower grade surface stock pile material was milled
during the quarter, plant recoveries improved to 89% (q2 2011:85%) mainly due to
the higher grades of stope and development tonnes provided from underground.
Although recovered ounces of gold were below planned levels, the gold recovered
increased by 33% quarter on quarter to 6,486 ounces with sales of 6,518 ounces
recorded.
Corporate
As at September 30, 2011, the Company had approximately $14 million in cash and
near cash reserves with 6,850 Au eqv ounces remaining at the refiner that will be
converted to cash in Q4 2011. The previously announced US$40 million standby debt
facility with Credit Suisse Ag remains undrawn with the entire facility
available.
Ferdi Dippenaar, Great Basin Gold President and CEO, commented: "The Nevada
operations continue to build momentum in delivering improved quarter on quarter
operational results as evident from the Q3 2011 performance. At Burnstone,
production is increasing but remains behind schedule. Although the initial
production build up is important for cash flow purposes, the decision to change
the underground stope layouts will impact on the short term availability of
mining areas, but is expected to result in a number of positive benefits over the
longer term exploitation of the ore body. We believe that our decision to utilize
mechanized mining as the preferred mining method at Burnstone was the correct
one, with the results starting to support this. The continued improvement in ore
development and stoping rates at Burnstone is reassuring, with more improvement
expected in the short term to get to the planned production levels. The cash flow
generated from the expected continued improvement in operational performance from
both operations as well as the undrawn $40 million standby debt facility should
provide the Company with adequate cash resources to fund its working capital
requirements."
Johan Oelofse, Pr.Eng., FSAIMM, 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 Technical Reports 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.com and home jurisdiction filings that are available at
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 production cost per ounce/tonne 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. It is determined by dividing the relevant mining and processing
costs including royalties by the ounces produced/tonnes milled in the period.
There may be some variation in the method of computation of "cash production cost
per ounce/tonne" as determined by the Company compared with other mining
companies. Cash production costs per ounce/tonne 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. As a Non-GAAP
Financial Measure cash production costs should not be considered in isolation or
as a substitute for measures of performance prepared in accordance with GAAP.
There is material limitations associated with the use of such Non-GAAP measures. |
