Great Basin Gold provides operational update
August 04 2011 - 1:56PM
PR Newswire (Canada)
VANCOUVER, Aug. 4, 2011 /CNW/ -- REPORTS 100% INCREASE IN REVENUE
VANCOUVER, Aug. 4, 2011 /CNW/ - Great Basin Gold Ltd. ("Great Basin
Gold" or the "Company"), (TSX: GBG; NYSE Amex: GBG; JSE: GBG)
reports an operational update for the 3 months ended June 30, 2011.
The Company will file its interim financial statements for Q2 2011
on August 15, 2011 and will hold an earnings call on August 16,
2011 at 9 am (EST). Great Basin Gold returned a much improved
quarter in respect of Au and Ag ounces sold which combined with an
expected improvement in cash costs should allow the Company to
report adjusted earnings per share for the quarter (Q1 2011:
adjusted loss per share of $0.01). Hollister The Nevada operations
recorded $49 million in revenue during the quarter on record sales
of 34,522 Au eqv(1) oz, an increase of 100% quarter on quarter.
During the continuing construction and installation of the acid
wash and carbon regeneration system at the Esmeralda Mill, loaded
carbon is sent to the refiner as opposed to dore. Improved refining
terms resulted in a decrease of approximately 5,000 Au eqv oz in
inventory held at the refiner from Q1 2011. The Esmeralda Mill
treated 22,237 tonnes during the quarter (Q1 2011:21,634) with a
marked improvement in Au and Ag recoveries of 95% and 75%. Cash
production costs for the quarter is expected to improve a further
8% quarter on quarter to approximately $611 per Au eqv oz in
Q2 2011. Underground exploration and stope delineation drilling
continued during the quarter, with a record footage of 45,000 feet
or 13,636 meters completed from 84 boreholes. The focus has been on
completing phases of drilling on the Blanket Zone and south east
Gwenivere targets, providing further data for incorporation in the
upcoming mineral resource update (anticipated release date
September 2011). The stope delineation drilling has continued to
tighten up controls for short interval trial stope planning.
Surface exploration has continued collating geological and
geophysical data as well as reviewing surface expressions of
interpretations with structural and geological observations.
Burnstone Operational efficiencies at Burnstone improved
significantly with mechanized ore development increasing by 33%
quarter on quarter to 1,550 meters in addition to 1,872 meters of
waste development completed during the quarter. The increase in ore
development allowed for an increase of 36% in the square meters
stoped quarter on quarter. Despite the relatively close drill
spacing in the current mining area, the exact position and
orientation of geological faults could not be identified earlier as
most of these are of a graben nature. Additional infill and
delineation drilling as well as extensive mapping and
interpretation of the structural information from the over 10
kilometers of underground development, now provides management with
more detailed data to incorporate these faulting into the mine
plan. An additional 66% waste development was completed during the
6 months ended June 30, 2011 in response to the geological faulting
encountered compared with the original planned meters. Excellent
progress has been made with long hole stoping as the mining method,
with the efficiency of the teams improving on a monthly basis. The
improved hanging and footwall conditions experienced in the C block
allowed for a significant improvement in decreasing the stoping
width which was measured as low as 67 cm in some stopes. This also
had a positive impact on the mining grade of stope material which
improved 60% from Q1 2011. The Metallurgical Plant is performing in
line with expectation with approximately 202,660 tonnes processed
during the quarter (Q1 2011:199,878 tonnes).Tonnes processed
however remain predominantly from development ore which includes
more dilution than stoped material and negatively impacts on the
mill head grade. Recoveries for the quarter improved to 85% (Q1
2011:83%) although still impacted by the low head grade ore
delivered to the mill. Recoveries are expected to improve to the
planned 95% as the head grade increases. The impact of the lower
head grade is reflected in the 5,619 Au ounces sold (Q1 2011:2,794
Au eqv oz) as well as the cash production cost per ounce of
approximately $1,450 (ZAR 10,130) expected for the quarter. During
the build-up phase a more accurate measurement is cost per tonne
which improved 12% to approximately $60 (ZAR420) (Q1 2011:$68) per
tonne for the quarter. _________________________ (1) Au eqv oz is
calculated based on US$1,400Au and US$30Ag. Corporate The Company,
with the assistance of RBC Capital markets, offered a $0.07 per
warrant early exercise discount to holders of the $1.25 warrants
expiring November 2011. Ten million of the warrants were exercised
prior to June 30, 2011 with another 9.2 million warrants exercised
subsequently, leaving approximately 223,000 warrants to be
exercised prior to expiry on November 15, 2011. The Company had
approximately $38 million in cash reserves on June 30, 2011 and has
also negotiated a US$40 million standby debt facility with Credit
Suisse AG. This facility will be available in the event that
additional working capital is required at Burnstone as a result of
the slower than planned production build-up. Legal documentation is
nearing completion with the targeted signature date being
mid-August, 2011. Ferdi Dippenaar, Great Basin Gold President and
CEO, commented: "Although experiencing the usual challenges with
bringing a new mine into production, Burnstone is settling into a
production rhythm and although the progress made by the team on a
monthly basis is reassuring, it is not yet at planned levels.
The need for additional waste development to access the
mining blocks impacted negatively on ore development which in turn
impacts on stopes available for mining. Production for the
remainder of the year will unfortunately be impacted by this
approximate 3 month delay in ore development and we expect to
recover between 50,000 to 60,000 Au oz for the second half of the
year and an estimated 60 000 to 70 000 ounces for the 12
month period. The Nevada operations showed improvements in a number
of areas during the quarter, notably in ounces extracted through
trial mining as well as the improved recoveries at our Esmeralda
Mill. The latter improvement is especially pleasing with the impact
already evident in the reduced cash costs and the increased ounces
delivered to the refinery. The current performance from our Nevada
operations and the standby debt facility provides the Company with
adequate cash resources to fund the delayed production build-up at
Burnstone. Our short to medium term focus at both of these
operations remains to increase production, manage costs and unlock
the intrinsic value of these quality projects." Johan Oelofse,
Pr.Eng., FSAIMM, Chief Operating Officer of Great Basin Gold, and
Phil Bentley, Pr. Sci. Nat., Vice President: Geology &
Exploration, Qualified Persons as defined by regulatory policy,
have 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 o mine expansions, environmental protection
and associated compliance costs arising from exploration, mine
development, mine operations and mine closures; o expected
effective future tax rates in jurisdictions in which our operations
are located; o the protection of the health and safety of mine
workers; and o 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 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 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. To
view this news release in HTML formatting, please use the following
URL:
http://www.newswire.ca/en/releases/archive/August2011/04/c9497.html
p /p p align="justify" For additional details on Great Basin Gold
and its gold properties as well as further particulars about the
financial and operational update, please visit the Company's
website at a href="http://www.grtbasin.com/"www.grtbasin.com/a
or contact Investor Services:bi /i/b /p table valign="top"
border="0" tr td Tsholo Serunye in South Africa
br/ Michael Curlook in North America
br/ Barbara Cano at Breakstone Group
in the USA /td td /td
td br/ /td td br/ /td td 27 (0) 11 301 1800br/ 1 (888) 633 9332br/
(646) 452 2334 /td /tr /table p /p
Copyright
Great Basin Gold, Ltd. (AMEX:GBG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Great Basin Gold, Ltd. (AMEX:GBG)
Historical Stock Chart
From Jul 2023 to Jul 2024