Great Basin Gold Announces Extended Life of Mine Projections for Hollister Gold Project



    VANCOUVER, Feb. 23 /CNW/ - Great Basin Gold Ltd. ("Great Basin Gold" or
the "Company"), (TSX: GBG; NYSE Alternext: GBG; JSE: GBG) announces an update
of the financial forecast for the Hollister Development Block ("HDB"), based
on the Company's work programs to December 31 2008. The HDB constitutes
approximately 5% of the Company's 100% owned Hollister Property which is
located on the Carlin Trend, some 80 km from Elko, Nevada, USA.
    Underground access of the high grade Gwenivere and Clementine vein
systems was completed in 2005, allowing for 55,000 ft of underground drilling
in 2006 and 2007. Mineral reserves were established that formed the basis of a
2007 feasibility study (September 9, 2007 technical report filed at
www.SEDAR.com). Since that time, Great Basin Gold has continued underground
drilling as well as drifting on the veins. To December 31, 2008 a total of
29,926 ft of underground development has been completed of which 9,100 ft has
been done on veins. Over 135,000 ft of diamond drilling has been completed,
designed to continue the delineation of the vein systems. Twenty-four discrete
veins have been identified to date. In addition, several bulk samples have
been extracted and treated at nearby milling facilities under toll mining and
ore purchase agreements.
    Great Basin Gold's in-house management and technical team as well as
external consultants have prepared an updated report based on a revised
mineral resource announced June 18, 2008 and the results of the 2008 work. A
number of the project plans remain as in the 2007 feasibility study, with
other key parameters described below. The National Instrument 43-101 compliant
technical report (the "2009 Update") is currently being finalized and is
expected to be filed on www.sedar.com during February 2009.
    Proven and probable mineral reserves(1) including tons extracted in 2008
were used for the life of mine ("LOM") model and financial analysis which are
1.28 million tons grading 0.90 oz/ton gold and 4.8 oz/ton silver at a 0.33
oz/ton gold cut-off, containing 1.2 million gold equivalent ounces to be
recovered over the 10-year mine life. Remaining proven and probable mineral
reserves are 1.23 million tons grading 0.844 oz/ton gold and 4.32 oz/ton
silver at a 0.33 oz/ton gold cut-off, containing 1.1 million gold equivalent
ounces. This is a 23% increase in gold equivalent ounces from the mineral
reserves in the 2007 feasibility study.
    Life of mine capital costs have increased, related to the extended life
of mine which requires additional underground development. The acquisition and
refurbishment costs of the Esmeralda Mill (which is now the chosen site for
milling) have also been included in the capital estimate rather than using
toll milling as proposed in the 2007 feasibility study. Of the currently
projected LOM capital cost of US$110 million, the Company has spent US$53
million to develop the mine and related infrastructure. The remaining required
capital over the life of the mine is estimated at US$57 million.
    Cash costs for mining and processing are estimated at US$426 per
recovered equivalent gold ounce(2). This is an increase from US$323 per ounce
in the 2007 feasibility study and is a direct result of the increased haulage
cost to the Esmeralda Mill, estimates on commodity prices and the slightly
lower estimated average grade over the life of mine. Cash costs are inclusive
of all mine site costs, direct development, milling and ore haulage, general
and administrative costs as well as royalties payable. Total cost per
recovered equivalent gold ounce increased from US$423 to US$559 as a result of
the increase in the LOM capital for the project. Total costs are inclusive of
cash costs, amortization and federal taxes.
    At long term prices of US$800/oz for gold and US$12/oz for silver, the
HDB has an Internal Rate of Return (IRR) of 41.2% and an after-tax Net Present
Value (NPV) of US$130 million using a 5% discount rate.
    Ferdi Dippenaar, President and CEO, commented: "Continued drilling at
Hollister has resulted in an increase in both life of mine projections and the
number of ounces expected to be mined from this highly prospective deposit.
Even at a gold price well below current prices, the life of mine has been
projected to extend from 6 years to 10 years. We believe this may very well
increase as we continue with programs to explore and infill-drill the vein
system which is still open on strike and at depth.
    The increase in the projected costs from the feasibility is in line with
industry inflation and the required changes to the project due to alternative
milling arrangements."
    Johan Oelofse, PrEng, FSAIMM, Chief Operating Officer for Great Basin, a
qualified person, supervised the 2009 Update and has reviewed this news
release.
    The Company also advises that the Equity Line Agreement, announced in
December 2008, has now completed and the Company issued an aggregate of
2,846,900 shares to Investec at an average price of $1.38.

    
    Ferdi Dippenaar
    President and CEO


    Notes:

    (1) The 2009 Update Mineral Reserves include approximately 50,200 tons
    that were extracted in 2008. Remaining Mineral Reserves include Proven of
    109,600 tons grading 1.107 oz/ton gold and 7.77 oz/ton silver and
    Probable of 1,124,700 tons grading 0.818 oz/ton gold and 3.98 oz/ton
    silver. The gold equivalent was calculated using prices of US$800/oz for
    gold and US$12/oz for silver.

    (2) Cash cost per ounce and total cost per ounce are numbers commonly
    used in the mining industry to assess performance. They are not terms
    recognized under generally accepted accounting principles.


     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, bank loan arrangements, reserve potential, exploration drilling
results, development, feasibility or exploitation activities and events or
developments that Great Basin Gold 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 for precious metals,
credit availability, development and exploration successes, continuity of
mineralization, uncertainties related to the ability to obtain necessary
permits, licenses and title and delays due to third party opposition,
geopolitical uncertainty, changes in government policies regarding mining and
natural resource exploration and exploitation, 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 Canadian
jurisdiction filings that are available at www.sedar.com.
    All information relating to the contents of the 2009 Update and to the
2007 feasibility study, including but not limited to statements of the HDB
project's potential and information such as capital and operating costs,
production summary, and financial analysis are forward looking statements. The
2009 Update was prepared to quantify the HDB project's capital and operating
cost parameters and to determine the project's likelihood of feasibility and
optimal production rate. The capital and operating cost estimates which were
used have been developed based on detailed capital cost to production level
relationships.
    The following are the principal risk factors and uncertainties which, in
management's opinion, are likely to most directly affect the ultimate
feasibility of the HDB project. The mineralized material at the HDB project is
currently classified as a measured and indicated resource, and a portion of it
qualifies under Canadian mining disclosure standards as a proven and probable
reserve, but readers are cautioned that no part of the HDB project's
mineralization is considered to be a reserve under US mining standards as all
necessary mining permits and project financing would be required in order to
classify the project's mineralized material as an economically exploitable
reserve. Although work has been done to confirm the mine design, mining
methods and processing methods assumed in the 2009 Update, construction and
operation of the mine and processing facilities depend on securing
environmental and other permits on a timely basis. Additional permits, when
required, have yet to be applied for and there can be no assurance that
required permits can be secured or secured on a timely basis. Although costs,
including design, procurement, construction and on-going operating costs and
metal recoveries have been established at a level of detail required for a
feasibility study, these could be materially different from those contained in
the 2009 Update. There can be no assurance that these infrastructure
facilities can be developed on a timely and cost-effective basis. Energy risks
include the potential for significant increases in the cost of fuel and
electricity. The 2009 Update assumes specified, long-term price levels for
gold and silver. The prices of these metals are historically volatile, and the
Company has no control of or influence on the prices which are determined in
international markets. There can be no assurance that the price of gold or
silver will continue at current levels or that they will not decline below the
prices assumed in the 2009 Update. Prices for gold and silver have been below
the price ranges assumed in 2009 Update at times during the past ten years,
and for extended periods of time. The project will require additional
financing. Although interest rates are at historically low levels, there can
be no assurance that debt and/or equity financing will be available on
acceptable terms. Other general risks include those ordinary to very large
construction projects, including the general uncertainties inherent in
engineering and construction cost, the need to comply with generally
increasing environmental obligations, and accommodation of local and community
concerns.





For further information:

For further information: For additional details on Great Basin Gold Ltd.
and its gold properties, please visit the Company's website at
www.grtbasin.com or contact Investor Services: Tsholo Serunye in South Africa,
+27 (0)11 301 1800; Michael Curlook in North America, 1-888-633-9332; Barbara
Cano at Breakstone Group in the USA, (646) 452-2334

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Great Basin Gold Ltd.

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