Great Basin Gold Closes US$51.5 Million in Senior Secured Notes
December 16 2008 - 9:04AM
PR Newswire (US)
VANCOUVER, Dec. 16 /PRNewswire-FirstCall/ -- Great Basin Gold Ltd.
("Great Basin Gold" or the "Company") (TSX: GBG; AMEX: GBN; JSE:
GBG) announces it has closed a Senior Secured Notes financing (the
"Financing"), issuing a total of 51,500 Units and raising gross
proceeds of US$51,500,000. Each Unit consists of a Senior Secured
Notes (the "Notes") in the principal amount of US$1,000 and 350
share purchase warrants ("Warrants"). Each Warrant entitles the
holder to purchase one common share (an "Underlying Common Share")
in the capital of the Company at a price of CDN$1.80 per share on
or before December 12, 2011. Each Note matures at 120% of principal
on the earlier of December 12, 2011 and certain stated events
including a change of control. The Notes will bear interest of 14%
per annum with the first 24 months of interest to be prepaid. The
Notes will be guaranteed on a joint and several basis by all the
Company's Nevada subsidiaries and secured by their assets. The
Notes will also be repayable at the election of the holder on 30
days notice after November 12, 2010. The proceeds of the Financing
will be used to acquire and refurbish the Esmeralda mine and mill,
with $15 million of the proceeds to be used to fund the Burnstone
project in South Africa while the Company is negotiating its
project funding facility for that project. The Company has also
entered into an equity line agreement with an affiliate of Investec
Limited. The Investec agreement provides that up to 4 million Great
Basin Gold shares will be sold in tranches by the Company to
Investec over the next 30 days at a 5% discount to average market
and subject to a CDN$1.00 floor price and TSX approval. In
connection with the Notes financing the Company will pay the agent,
Casimir Capital LP, a 4% commission plus 721,000 Warrants and has
also paid investor due diligence costs of 4% of proceeds. The Notes
and Warrants will be transferable, subject to compliance with
United States and Canadian applicable securities laws. The Notes,
Warrants, underlying common shares and equity line shares have not
been and will not be registered under the US Securities Act of
1933, as amended (the "U.S. Securities Act"), or applicable state
securities laws, and may not be offered or sold within the United
States or to, or for the account or benefit of, "U.S. persons", as
such term is defined in Regulation S under the U.S. Securities Act,
absent registration there under or in transactions exempt from such
registration requirements. The Notes, Warrants, underlying shares
and equity line shares are subject to a four month resale
restriction in Canada. Ferdi Dippenaar CEO and President commented:
"Great Basin Gold is in the fortunate position of having a quality,
previously unencumbered asset in Nevada, the Hollister property,
that we could leverage to raise capital even under the current
difficult market conditions. The proceeds from this financing will
allow us to conclude the purchase agreement on the Esmeralda
property and mill, which will significantly benefit the Company by
having control over its processing facility in Nevada. The
development of our Burnstone project will also continue at the
planned rate of the development with a portion of the proceeds
being allocated to that project." 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 for metals, exploration and test-mining
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 http://www.sedar.com/.
DATASOURCE: Great Basin Gold Ltd. CONTACT: on Great Basin Gold Ltd.
and its gold properties, please visit the Company's website at
http://www.grtbasin.com/ 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
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