VANCOUVER,
Feb. 6, 2012 /PRNewswire/ - Great
Basin Gold Limited ("Great Basin Gold" or the "Company"), (TSX:
GBG; NYSE Amex: GBG; JSE: GBG) reports preliminary unaudited fourth
quarter and full year 2011 operating results.
Hollister, Nevada Operations
|
Quarter
ended |
Variance |
Year ended |
Variance |
Dec 31 2011 |
Sept 30 2011 |
Dec 31 2011 |
Dec 31 2010 |
Ore tonnes to surface |
22,431 |
26,474 |
(15%) |
96,030 |
89,613 |
7% |
Contained Au eqv oz extracted |
21,773 |
23,811 |
(9%) |
101,764 |
109,255 |
(7%) |
Contained average grade Au
oz/ton |
0.81 (26.2 g/t) |
0.75 (24.3 g/t) |
8% |
0.90 (29.0 g/t) |
1.17 (37.6 g/t) |
(23%) |
Contained average grade Ag
oz/ton |
6.22 (200.1 g/t) |
6.74 (216.8 g/t) |
(8%) |
7.41 (238.2 g/t) |
7.08 (227.6 g/t) |
5% |
Tonnes processed |
24,328 |
29,869 |
(19%) |
98,068 |
116,029 |
(16%) |
Recovered Au oz |
18,552 |
22.701 |
(18%) |
86,444 |
88,149 |
(2%) |
Recovered Ag oz |
101,487 |
156,030 |
(35%) |
521,099 |
448,353 |
16% |
Recovered Au eqv oz |
20,727 |
26,045 |
(20%) |
97,610 |
95,186 |
3% |
Recovery % Au |
92% |
92% |
- |
92% |
82% |
12% |
Recovery % Ag |
70% |
74% |
(5%) |
72% |
60% |
20% |
Au eqv oz sold |
17,603 |
22,790 |
(23%) |
92,239 |
88,789 |
4% |
Cash cost per Au eqv oz produced
(US$) |
783 |
665 |
(18%) |
674 |
740 |
9% |
The Nevada operations produced
20,727 Au eqv ounces1 from trial mining activities
during the quarter (Q3 2011: 26,045 Au eqv ounces) and 97,610 Au
eqv oz for the full year of production (2010: 95,186 Au eqv oz),
compared to an average annual forecast of 100,000 Au eqv oz for the
year. A similar performance is expected in 2012. As previously
indicated, the high grade nature of the Hollister ore body can lead
to quarterly grade fluctuations, and this occurred in this
quarter. The Au eqv grade increased by 8% from 0.75 oz/t
(24.3 g/t) in Q3 2011 to 0.81 oz/t (26.2 g/t) in Q4 2011.
Fiscal 2011 was the first year that all material
extracted from trial mining activities was processed at our
Esmeralda mill, which showed a marked improvement in Au recovery
from 2010, increasing from 82% to 92%. As the performance of the
acid wash and carbon regeneration system, which was commissioned
during November 2011, has not yet
reached planned levels, the mill continued with the process of
replacing carbon on a continuous basis and this impacted the amount
of Au eqv oz sold as well as the cash costs reported for the
quarter. In an effort to mitigate the time delay in recognizing
produced metal as revenue and the insufficient capacity of local
refiners, a shipment of loaded carbon was sent to Rand Refinery in
South Africa in late December at
an additional cost of approximately US$35 per Au eqv oz. Notwithstanding the
quarterly increase in cash costs, the year-on-year cash costs
decreased by 9% to US$674 per Au eqv
oz which is only marginally above the 2011 forecast of US$650 per Au eqv oz.
Burnstone, South Africa Operations
|
Quarter
ended Dec 31 2011 |
Quarter
ended Sept 30 2011 |
Variance |
Year
ended Dec 31 2011 |
Ore development (meters) |
2,900 |
2,786 |
4% |
8,402 |
Waste development (meters) |
1,083 |
1,403 |
23% |
6,441 |
Stoping (square meters) |
6,653 |
7,408 |
(10%) |
22,943 |
Stoping square meters available |
7,205 |
5,090 |
42% |
7,205 |
Ore tonnes to surface - development |
126,282 |
138,158 |
(9%) |
499,309 |
Ore tonnes to surface - stoping |
21,007 |
24,379 |
(14%) |
80,472 |
Ore tonnes to surface - total |
147,289 |
162,537 |
(9%) |
579,781 |
Contained Au oz extracted - development |
4,468 |
3,451 |
30% |
13,845 |
Contained Au oz extracted - stoping |
2,423 |
2,705 |
(10%) |
7,609 |
Contained Au oz extracted - total |
6,891 |
6,156 |
12% |
21,454 |
Contained average grade Au eqv oz/ton -
development |
0.04 (1.14 g/t) |
0.02 (0.80 g/t) |
43% |
0.03 (0.89 g/t) |
Contained average grade Au eqv oz/ton -
stoping |
0.12 (3.71 g/t) |
0.11 (3.57 g/t) |
4% |
0.09 (3.04 g/t) |
Contained average grade Au eqv oz/ton - total |
0.05 (1.50 g/t) |
0.04 (1.22 g/t) |
23% |
0.04 (1.19 g/t) |
Tonnes milled |
160,762 |
209,224 |
(23%) |
775,524 |
Recovered Au oz |
6,470 |
6,486 |
- |
23,361 |
Recovery % Au |
89% |
89% |
- |
88% |
Au oz sold |
7,058 |
6,518 |
8% |
21,989 |
Cash cost per Au oz produced (US$) |
1,793 |
2,345 |
24% |
1,780 |
The production ramp up at Burnstone continued,
with ore development meters increasing by 4% from 2,786 metres in
Q3 2011 to 2,900 meters in Q4 2011. Quarter-on-quarter, the
square meters of stoping available increased by 42%. With the
improved information on geological structures being applied to
planned development, waste development meters per quarter decreased
by 48% from levels reported in Q1 2011 to 1,083 meters in Q4
2011.
Since intersecting an 80 meter graben fault in
Q1 2011, in-fill drilling comprising 19,051 meters from surface and
7,966 meters from underground was completed to January 31, 2012, increasing confidence in the 24
to 30 months mine plan. No significant faults were
intersected over this period. In-fill drilling will continue over
the medium to longer term.
Quarter-on-quarter, ore development rates and
production from stoping were however less than plan due to the
impact of the December 2011 Christmas
break as well as underground flooding of a number of development
ends through fissures following an unusually high seasonal rainfall
In December 2011. Permanent water
reticulation infrastructure is under construction for completion in
Q2 2012, with interim measures implemented to manage the water
balance in the short term.
The combined development and stoping contained
mined grade improved by 23% from 1.22 g/t in Q3 2011 to 1.50 g/t;
this was the result of more low profile ore development than high
profile ore development having occurred during the period. Total Au
production for the year came to 23,361 Au ounces, approximately
6,000 Au ounces less than the revised guidance. Although we are
looking forward to a continued improved year on year performance at
Burnstone, we will continue to examine production guidance in the
light of our experiences in 2011.
The Metallurgical Plant continued to perform
in-line with expectations, with the decrease in processed tonnage
being a result of the lower values of ore tonnes hoisted from
underground. Cash production costs reduced by 24% to US$1,793/Au oz and by 11% to US$70 per tonne (Q3 2011: US$2,345 per Au oz and US$79 per tonne). Cash costs are still impacted
by the low average grade of ore resulting from the high ratio of
development ore to stoping material being processed as well as the
lower volumes than planned from stoping being mined and processed.
Improvements are expected as the grade increases to the average
reserve grade of the ore body and production nears steady state
levels.
Other Corporate Updates
Of the total US$150
million restructured Term facility, the Company has drawn
US$130 million with the proceeds used
to settle the principal due on Term Loan 1 and the
standby-facility. As at December 31, 2011, the remaining
proceeds plus remaining funds available under this facility and
near term cash sources amounted to approximately $54 million in available cash
resources.
On January 25,
2012 the Department of Water Affairs granted a water licence
that authorises the completion of the 88 kV power line between
the Grootvlei power station and the Burnstone mine that will
provide a permanent feed of 51 MVA power to site. The authorization
also allows for the completion of a second line that will provide
security of supply to the mine.
On a corporate note, Mr H. Wayne Kirk, has
resigned as a non-executive
independent director of the Company for personal
reasons, with an effective date of January
30, 2012. The Board wishes to thank Wayne for his
services over the past 7 years.
The Company intends to release its financial
results for the year ended December 31,
2011 by the end of March
2012, at which time the production and financial position
guidance for 2012 will be updated.
President and CEO Ferdi
Dippenaar commented: "Whilst our Nevada operations returned a much improved
performance compared to 2010, our Burnstone Mine continues to face
challenges in its production build-up programme. The focus
will be on improving the ore development rate required to deliver
on the production plan and with the benefit of the infill drilling
completed over the past 9 months which has improved our
understanding of the ore body and the good progress which is being
made in improving the underground infrastructure, we are looking
forward to a much improved 2012."
About Great Basin Gold
Great Basin Gold (GBG: TSX; GBG: NYSE Amex; GBG:
JSE) is a mining company engaged in the exploration, development
and production of gold properties. The Company has two producing
mines in the world's two richest gold regions: the Hollister
operation on the Carlin Trend in Nevada,
USA and the Burnstone operation in the Witwatersrand
goldfield of South Africa.
No regulatory authority has approved or
disapproved the information contained in this news release.
Cautionary Statement Regarding 2011 Preliminary
Operating Results
We caution you that, whether or not expressly
stated, all measures of the Company's fourth quarter and 2011
financial results and condition contained in this news release,
including production, sales and cash costs are preliminary and
reflect our expected 2011 results as at the date of the news
release. Actual reported fourth quarter and 2011 results are
subject to management's final review as well as audit by the
Company's independent registered accounting firm and may vary
significantly from those expectation because of a number of
factors, including, without limitation, additional or revised
information and changes in accounting standards or policies or in
how those standards are applied. For a discussion of factors that
may adversely affect our financial results and condition, see the
Company's 2010 MD&A available on the Company's website or
www.SEDAR.com. The Company will provide additional discussion and
analysis and other important information about its fourth quarter
and 2011 financial results and condition when it reports actual
results prior to March 31, 2012.
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 Gold,
investors should review the Company's annual Form 40-F filing with
the United States Securities and Exchange Commission www.sec.gov
and home jurisdiction filings that are available at
www.sedar.com.
1 Gold equivalent ("Au eqv") calculations use
US$1,400/oz for Au and US$30/oz for Ag.
SOURCE Great Basin Gold Ltd.