VANCOUVER, Aug. 12 /CNW/ - Great Basin Gold Ltd, ("Great Basin" or the
"Company"), (TSX: GBG; NYSE Amex: GBG; JSE: GBG) announces results for the
quarter ended June 30, 2009. Two of the highlights were the good progress made
with the discovery of two new veins at the Hollister Property in Nevada, USA
and commencing the development of multiple reef drives at the Burnstone
Property in South Africa.
The Company incurred a loss of CDN 4 cent per share, which is similar to
the loss incurred for the March 2009 quarter. Gross revenue of CDN$28.2
million, before toll milling charges of CDN$6.3 million, was realized from the
sale of 26,517 gold equivalent ("Au eqv") ounces (Mar '09 - 18,189 Au eqv
ounces) from trial mining at Hollister during the quarter. Cash costs,
excluding milling costs, were CDN$439 (US$375) per ounce (Mar '09 - CDN$397 or
US$320 per ounce). Quarter on quarter cash costs per ton decreased by 15% to
CDN$434 (US$371). A total of 18,442 tons of ore (at a grade of 0.99 Au eqv
ounces1 per ton or 34.1 g/t), containing 18,219 Au eqv ounces, was extracted
during the quarter. The year to date production costs of CDN$402 (US$344) per
ounce and CDN$472 (US$403) per ton remain ahead of budgeted costs of CDN$426
(US$364) per ounce and CDN$540 (US$462) per ton.
Pre-development expenses for the Hollister property increased from
CDN$5.2 million to CDN$8.5 million, quarter on quarter. To date, an amount of
CDN$70 million has been expensed through the income statement for our
At Hollister, underground waste development continued with 2,307 ft (700
m) being completed, totaling 26,652 ft (8,076 m) to date. Ore development feet
were higher at 1,104 ft (335 m) compared to 645 ft (195 m) planned. The focus
in the past quarter has been on development to establish the 5050 Level, where
a total of 434 ft (132 m) of access excavations were completed. This is a high
grade stope with a current length of approximately 700 ft (213 m) and where
trial mining is planned to commence in the third quarter.
Underground evaluation and exploration drilling for other mineralized
structures totalled 19,590 ft (5,936 m). Exploration expenses for the quarter
increased to CDN$4.4 million (March '09 - CDN$4 million), of which CDN$3.6
million was spent on an underground exploration program at Hollister.
Following the discovery of two new veins in close proximity to the current
underground infrastructure, a follow-up drilling program has been initiated to
test the extent and depth of mineralization.
The refurbishment of the Esmeralda Mill was completed and commissioning
commenced in July 2009. A total of 3,000 tons have been shipped to site and
milling has commenced. It is planned to initially fill the plant with low
grade material until the delivery and installation of the float and gravity
section has been completed by October 2009. Permission by the Nevada
Department of Environmental Protection to construct a refinery on site can
only be granted once an analysis of the milled material from the operational
plant has been completed. The process typically takes 6 months to complete.
Until then Au concentrate will be shipped off-site for recovery.
For Burnstone, CDN$33 million (Mar '09 - CDN$7 million) was capitalized
in the quarter. In the six months ended June 30, 2009, CDN$40 million was
capitalized as activities related to the construction of the mine
Good progress continues to be made with the development of surface and
underground infrastructure at the Burnstone Project. As at August 9, 2009,
7,709 ft (2,336 m) of decline development had been completed. The access
decline continued beyond the reef elevation, with approximately 954 ft (289 m)
remaining to vertical shaft position. The cross-cut to Block B 3 has accessed
the Kimberley Reef and production stopes are being established. As at August
9, 2009, a total of 6,134 tons have been accumulated on the surface ore
stockpile. A total of 40 ft (12 m) remains to access Block C before stope
establishment for mining commences.
Sinking of the vertical shaft at Burnstone continued and at August 9,
2009, the shaft had reached a depth of 1,188 ft (360 m) below surface with 436
ft (133 m) remaining to shaft bottom. At a depth of 1,181 ft (358 m) the shaft
also intersected the Kimberley reef at the expected elevation, at which the
cover diamond drill hole graded 7.54 g/t over 116 cm (for 874 cmg/t). Samples
have been collected for assaying. The final depth of the shaft is planned at
1,624 ft (492 m). The refurbishment of the mills continues to be on schedule
and the civil excavations for the Metallurgical facility are planned for
completion by September 2009, after which the Metallurgical Plant construction
President and CEO Ferdi Dippenaar commented: "The Company continues to
make good progress at both its development projects. With the commissioning of
the Esmeralda Mill, our Hollister Mine can look forward to reporting more
consistent results which will assist in the understanding of its quarter on
quarter performance. At our Burnstone Mine, with the establishment of the
first stopes underway, the rate of mining should increase with more ore tons
reporting to the surface stockpile. Our target to have a fully operational
project at Burnstone by end June 2010 remains on track with the construction
of the metallurgical facility to commence after the completion of the civil
excavations, by the end of September 2009."
Johan Oelofse, Pr.Eng., FSAIMM, Chief Operating Officer of Great Basin
and a qualified person has reviewed this release on behalf of the Company.
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 www.sedar.com.
(1) Gold equivalent was calculated using a gold price of US$800 per ounce
and a silver price of US$12 per ounce.
For further information:
For further information: on Great Basin 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)