GREAT BASIN
PROVIDES FOURTH QUARTER OPERATIONAL AND FINANCIAL UPDATE
February 25, 2010, Vancouver, BC
- Great
Basin Gold Ltd. ("Great Basin" or the "Company") (TSX: GBG;
NYSE Amex: GBG; JSE: GBG) announces an operational update for its fourth
quarter, along with unaudited financial results for the quarter and the
financial year ended December 31, 2009. Highlights include operational improvements
at the Company's newly refurbished Esmeralda Mill facility for the Hollister
Project in Nevada, early successes with long hole stoping trial-mining methods
at both the Hollister and Burnstone projects and good progress in the construction
of the metallurgical facility, vertical shaft and underground infrastructure
at the Burnstone Project in South Africa.
Great Basin incurred an estimated loss of CDN$0.03 per share for the fourth
quarter as compared to CDN$0.05 per share for the quarter ended September
30, 2009. Year-on-year, the loss per share decreased from CDN$0.40 per share
in 2008 to CDN$0.16 cents per share in 2009. The cost reduction program
initiated in October 2008 resulted in decreased expenditures for exploration,
pre-development and administration. The Company had working capital of $92
million on December 31, 2009 of which $89 million is cash and cash equivalents.
At Hollister, ore tons and gold equivalent ounces extracted from trial mining
activities during the fourth quarter were lower than planned due to several
factors including more difficult mining conditions and an approximately
two week suspension of trial mining in order to review the causes of, and
take corrective action in connection with a worker falling accident during
November which, fortunately, resulted in only a minor injury. A total of
16,785 tons of ore containing 20,660 Au eqv oz [1] were extracted which
is, nevertheless, a 15% improvement over the third quarter of 2009. A total
of 81,211 Au eqv oz was extracted over the 2009 year. Cash costs per ton
mined for the quarter were adversely impacted by the lower than planned
tonnage; however, good progress was still made on reducing the operating
costs, and the cash cost per ore ton extracted from underground improved
12% from US$480 in 2008 to US$423 in 2009. In addition, changes in various
areas have been made, including management and supervision, which have already
resulted in improved performance for the first two months of 2010.
A total of 161,518 Au eqv oz has been extracted at Hollister since the commencement
of trial-mining activities in June 2008. The average project head grade
of 1.34 Au eqv oz per ton (45.9 g/t) to date remains in excess of the planned
grade of 1.0 Au eqv oz per ton. Delineation and exploration drilling conducted
during 2009 has provided valuable information on structure in the ore body
that is being incorporated into the medium and longer term mine plan.
Following the first phase of refurbishment and commissioning of the Esmeralda
mill in September 2009, the focus has been on improving the mill's efficiencies.
Some 8,070 ore tons, containing an estimated 6,866 Au eqv oz, were processed
through the Esmeralda mill processing facilities during the quarter. Based
on a recovery factor of 83%, this resulted in extraction of 5,676 Au eqv
oz. Further near-term operational improvements underway are expected to
yield higher mill recoveries. Although the mill is able to treat approximately
350 tons per day, current carbon stripping capacity is insufficient due
to the higher metal content. A second carbon stripping facility will be
installed by the end of March 2010, thereby doubling the carbon stripping
capacity.
No revenue was booked during the fourth quarter and, as a result, the Hollister
ore stockpile at December 31, 2009 contained 41,683 tons with an estimated
metal content of 41,446 Au eqv oz, and a further 5,676 Au eqv oz were in
process in the Esmeralda mill circuit. Doré bars are currently being
poured off-site and the first refined bullion was sold in early February
2010. The re-introduction of the refurbished Merrill-Crowe circuit and furnace
will see all doré being poured on-site as of the start of the second
quarter of 2010. A number of alternatives are currently being considered
to expedite toll processing or sale of excess ore on the stockpile.
At Burnstone, good progress continues to be made with the development of
surface and underground infrastructure. As at December 31, 2009, 8,292 ft
(2,528 m) of decline development had been completed and a total of 2,886
ft (880 m) of on-reef development was completed during the quarter, and
3,710 ft (1,131 m) to date, with good continuity in the reef exposed.
The initial long hole stoping trials have delivered positive results thus
far, and the Company plans to implement this higher level of mechanized
mining on a trial basis over a period of 9 to 12 months before final evaluation.
The current focus is the establishment of more mining stopes in Block B,
with activities in Block C mainly focused on reef development. At December
31, 2009, in excess of 60,000 tons have been accumulated in ore stockpiles.
Sinking of the vertical shaft at Burnstone has continued and, at February
21, 2010, the shaft had reached a depth of 1,476 ft (450 m) below surface
with 115 ft (35 m) remaining to shaft bottom. The final depth of the shaft
is planned at 1,591 ft (485 m). Development, totaling 902 ft (275 m), on
40 Level Station has been completed. Development of the 41 Level Station
commenced with 430 ft (131 m) being completed and 436 ft (133 m) remaining
before the sinking to shaft bottom re-commences, which is planned for mid-March
2010.
The refurbishment of the Burnstone mills continues to be on schedule. All
civil construction for the metallurgical plant facility will have been completed
by mid-March 2010, which will allow for the delivery of the mills as well
as an accelerated rate of construction of metallurgical plant infrastructure.
President and CEO Ferdi Dippenaar commented on the quarter: "The number
of gold equivalent ounces extracted through trial mining from our Hollister
Mine project in the December quarter was somewhat lower than planned due
to several factors; however I am pleased to report that the pace has picked
up significantly in early 2010.
Overall, the Company continues to make good progress at both its gold development
projects. Burnstone, in particular, is entering an extremely exciting phase
of its development, with vertical shaft, mills and metallurgical plant converging
on completion over the next several months."
Johan Oelofse, Pr.Eng., FSAIMM, Chief Operating Officer of Great Basin and
a Qualified Person, as defined by regulatory policy, has reviewed and assumed
responsibility for the technical information contained in this release.
Ferdi Dippenaar
President and CEO
For additional details on Great Basin and its gold properties as well as
further particulars about the financial and operational update, please visit
the Company's website at www.grtbasin.com or contact Investor Services:
Tsholo Serunye in South Africa
Michael Curlook in North America
Barbara Cano at Breakstone Group in the USA
|
27(0) 11 301 1800
1(888)633 9332
(646)452 2334
|
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 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, investors should review the Company's
annual Form 20-F filing with the United States Securities and Exchange Commission
www.sec.com and home jurisdiction filings that are available at www.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 cost per ounce produced 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 of test mining at the Hollister project. It is determined
by dividing the relevant mining and processing costs excluding royalties
by the ounces produced in the period. There may be some variation in the
method of computation of "cash cost per ounce produced" as determined
by the Company compared with other mining companies. In this context, "ounces
produced" includes in-process and doré inventory along with
ounces of gold sold in the period. Cash costs per ounce produced 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 of test mining at Hollister. As a Non-GAAP Financial Measures
cash cost per ounce should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with GAAP. There are
material limitations associated with the use of such Non-GAAP measures.