Great Basin Gold Announces Progress on Burnstone Project Funding

    VANCOUVER, June 10 /CNW/ - Great Basin Gold Ltd. ("Great Basin Gold" or
the "Company") (TSX: GBG; NYSE Amex:   GBG; JSE: GBG) today announced that it
has granted a mandate to Investec Bank Limited ("Investec") for the arranging
of project funding for the Company's Burnstone project in South Africa. The
facility consists of a ZAR850 million (US$106 million) senior debt facility
and a ZAR180 million (US$23 million) standby debt facility to cover potential
cost overruns. Significant progress has been made in the finalization of a
syndicate of banks for this purpose, with final credit approvals already
obtained by some of the envisaged participants and in-principle approvals by
the other potential syndicate members.
    The facility will have a maximum term of 7 years with capital and
interest repayment commencing June 30, 2011. Interest rates are linked to the
Johannesburg inter banking borrowing rate ("JIBAR") with a premium of 4.5%
above JIBAR post completion and a 5% premium prior to completion.
    The Company will enter into a fence structure (zero cost collar) for
approximately 300,000 gold ounces (being approximately 20% of Burnstone's
production during the loan term) with lenders to provide a cost effective
hedging structure required by the facilities.
    The Company is required to contribute equity amounting to approximately
55% of the total Burnstone project cost. The estimated required equity
contribution by the Company (based on the current project plan) amounts to
ZAR1,075 million (US$134 million) of which ZAR560 million (US$70 million) has
been spent to March 31, 2009. The Company is required to deposit ZAR180
million (US$23 million) into a standby equity account under the control of the
lenders with these funds to be allocated towards cost overruns prior to draw
down on the standby debt facility. The Company will also repay the existing
ZAR200 million loan facility, as well as accrued interest of approximately
ZAR20 million, advanced by Investec in July 2008, for purposes of the
Burnstone project. The senior debt facility will be secured by the assets of
the Burnstone project, with a completion guarantee to be put in place by the
    The facilities are subject to the completion of suitable loan and
security documentation, and include conditions precedent usual for project
funding of this nature. These conditions precedent include completion of
technical and legal due diligence, and an updated and agreed financial model.
Technical and legal due diligence is well advanced and it is envisaged that
the loan documentation will be concluded prior to June 30, 2009.
    Development of the Burnstone project is well underway with multiple
access points to the mining blocks currently being established to allow for
the build up in reef tonnage available for production in the second half of
2009. The current project schedule indicates June 30, 2010 as the date for
mill commissioning and first revenue to be generated in the subsequent months.
    Ferdi Dippenaar, President and CEO, commented; "Although the current
financial market volatility has had a significant impact on the process to
obtain approval for the project funding facility, the returns from the
Burnstone project remains extremely positive under the current market
conditions. The Burnstone project has been subjected to significant scrutiny
by the lenders during their approval process and the Project came out strong
on every occasion. This is also testament to the economic robustness of the

    Ferdi Dippenaar
    President and CEO

    No regulatory authority has approved or disapproved the information
    contained in this news release.

    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 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, exploitation 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 home
jurisdiction filings that are available at

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 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

Organization Profile

Great Basin Gold Ltd.

More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890