GREAT BASIN GOLD PROVIDES OPERATIONAL UPDATE
May 03 2011 - 8:30AM
PR Newswire (Canada)
VANCOUVER, May 3 /CNW/ -- Including initial Production and Revenue
from the Burnstone Mine VANCOUVER, May 3 /CNW/ - Great Basin Gold
Ltd. ("Great Basin Gold" or the "Company"), (TSX: GBG) (NYSE: GBG)
(Amex: GBG) (JSE: GBG) reports an operational update for the
quarter ended March 31, 2011 (Q1 2011). The Company will file its
interim financial statements for Q1 2011 on May 16, 2011 and will
hold an earnings call on May 17, 2011 at 9 am (EST). Burnstone The
Metallurgical Plant, as well as all other major capital projects
was successfully commissioned by the end of January 2011. During
the quarter, Burnstone recovered 5,511 gold ounces (Au oz) and sold
2,794 oz to record its maiden revenue of $3.8 million. The cash
production cost per tonne for the period is estimated at US$70
(ZAR490), which is in-line with the planned cost during production
build-up. Ounces recovered were predominantly from development ore
processed, which at a lower head grade of 0.03 Au oz/t (1.03 g/t)
grade resulted in a gold recovery of 83%. Gold recoveries are
expected to improve as the grade of the mill feed increases.
The impact of the lower head grade resulted in a cash production
cost of approximately US$1,365 (ZAR 9,555) per oz. The
Metallurgical Plant processed approximately 200,000 tonnes during
the quarter, in-line with the production build-up plan. Underground
tonnes are being augmented with the stockpile material to allow the
mill to operate at an average of 90,000 tonnes per month until such
time as production from underground is sufficient to increase to
the planned processing rate of 125,000 tonnes per month. Mechanized
development continued with 3,288 meters being developed during the
quarter against a plan of 3,600 meters, bringing the total
development for the project to date to 12,402 meters of which 6,855
are on reef. Long Hole Stoping continued with a total of
6,000 square meters stoped to date. Good progress was made with the
second phase of the shaft infrastructure on 40 and 41 Level, with
the tramming loop and second access to the shaft tip being
completed. This will alleviate the congestion at the tips and allow
for the further ramp-up of tonnes though the shaft system. Over and
above the area stoped to date, 16 panels were also drilled and
available for blasting at the end of March, 2011. Hollister During
the quarter, 21,828 tonnes were extracted through trial mining at
Hollister, an average grade of 1.03 gold equivalent oz (Au eqv
oz)(1). Hollister maintained its production momentum from Q4 2010
by recovering 28,500 Au eqv oz, of which only 17,500 Au eqv oz were
recognized in revenue as an additional 11,000 Au eqv oz were
delivered but not sold to the refiner by quarter end. Until such
time as the installation of the acid regeneration system has been
completed at the Esmeralda Mill, the Company will continue to
ship-loaded carbon to the refinery as opposed to doré, there will
be a timing delay on when the revenue from these ounces can be
recognized. Since the introduction of clean carbon in February
2011, Au recoveries have exceeded 90%, with the Au recovery for the
quarter being 88%, and Ag recoveries increasing to 68%. The
Esmeralda Mill treated 21,634 tonnes during the quarter with an
average head grade of approximately 1 Au eqv oz/t (32.15 g/t). Cash
costs for the quarter are estimated at US$680 per Au eqv
ounce. Although the overall average in-situ grades in the
Blanket Zone are lower than what was encountered in the super high
grade area, an additional 1,025 tons were mined during the quarter,
at an average grade in excess of 3 Au eqv oz/t. The delay in
recognizing revenue from the Nevada operations had a negative
impact on the earnings for the quarter. The net loss for the
quarter is also impacted by the fair value charges attributable to
the mark-to-market of the zero-cost collar hedge programs, as well
as the settlement loss recognized on repayment of the Senior
Secured Notes in March 2011. The adjusted loss per share for the
quarter is estimated at $0.01 with the loss per share $0.05. The
Company had $68 million in cash reserves on March 31, 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 the
progress made by the team on a monthly basis is reassuring.
Production is expected to increase to 18,000 ounces in Q2 2011. The
Nevada operations showed improvements in a number of areas during
the quarter, notably on ounces recovered through trial mining as
well as the improved recoveries at our Esmeralda Mill. The
latter improvement especially pleasing with the impact already
evident in both the resulting cash costs and the ounces delivered
to the refinery. Not being able to recognize all ounces at the
refiners has impacted our operating margins as well as earnings.
Our short to medium term focus at both of these operations is to
increase production and manage costs, and unlock the intrinsic
value of these quality projects." Johan Oelofse, Pr.Eng., FSAIMM,
Chief Operating Officer of Great Basin Gold, a Qualified
Person as defined by regulatory policy, has 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.
_______________________________ (1) Gold equivalent is calculated
using metal prices of $1,350 per ounce for gold and $25 per ounce
for silver. To view this news release in HTML formatting,
please use the following URL:
http://www.newswire.ca/en/releases/archive/May2011/03/c8633.html 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: /p p align="justify" /p table border="0"
tr td Tsholo Serunye in South Africa /td
td 27 (0) 11 301 1800 /td /tr tr td Michael Curlook in North
America /td td 1 (888) 633
9332 /td /tr tr td Barbara Cano at Breakstone Group in the USA
/td td (646) 452 2334
/td /tr /table
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