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GBG - Great Basin Gold Limited - Audited consolidated financial statements for
the years ended December 31, 2010 and 2009consolidated balance sheets
GREAT BASIN GOLD LIMITED
(Incorporated in Canada and registered as an External Company in South Africa)
(Registration No. 2006/021304/10)
Share Code: GBG ISIN Number: CA3901241057
("Great Basin" or "the Company")
AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2010
AND 2009CONSOLIDATED BALANCE SHEETS
(Expressed in Canadian Dollars)
December 31 December
31
2010 2009
$`000 $`000
Assets
Current assets
Cash and cash equivalents 12,855 89,464
Amounts receivable 9,340 5,053
Inventory 18,440 26,312
Available-for-sale financial instruments - 4,961
Held-for-trading financial instruments - 207
Other assets 1,283 865
41,918 126,862
Loans due from related parties 13,372 -
Property, plant and equipment 512,384 191,474
Reclamation deposits 4,719 4,590
Restricted cash - 2,439
Mineral property interests 245,650 222,919
TOTAL ASSETS 818,043 548,284
Liabilities and Shareholders` Equity
Current liabilities
Accounts payable and accrued liabilities 61,732 29,206
Current portion of long term borrowings 53,516 43,768
Current portion of other liabilities 278 -
115,526 72,974
Long term borrowings 156,062 86,948
Future income taxes 18,939 10,659
Other liabilities 12,419 -
Site reclamation obligations 5,660 3,990
193,080 101,597
Shareholders` equity
Share capital 709,449 567,596
Warrants 6,108 13,104
Contributed surplus 86,540 83,267
Deficit (294,625) (265,713)
Accumulated other comprehensive 1,965 (24,541)
income(loss)
509,437 373,713
TOTAL LIABILITIES AND SHAREHOLDERS` EQUITY 818,043 548,284
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the years ended December 31, 2010 and 2009
(Expressed in Canadian Dollars)
Years ended December,31
2010 2009
$`000 $`000
Revenue 99,706 33,738
(Expenses) income
Production cost (70,326) (20,615)
Depletion charge (8,444) (3,262)
Exploration expenses (10,450) (16,592)
Pre-development expenses (13,397) (25,869)
Corporate and administrative cost (7,630) (7,501)
Corporate social responsibility - (1,084)
Environmental impact study (2,580) (982)
Foreign exchange gain - net 4,641 2,549
Salaries and compensation
Salaries and wages (7,528) (6,628)
Stock-based compensation (4,887) (8,284)
Loss before the undernoted and income (20,895) (54,530)
taxes
Interest expense (64) (144)
Interest income 1,827 2,911
Net realized gain on available-for- 489 -
sale financial instruments
Net realized loss on held-for trading (67) -
financial instruments
Net unrealized gain (loss) on held-for 86 (2,215)
trading financial instruments
Net unrealized loss on held-for (3,606) -
trading financial instruments
recognized
Net unrealized market-to-market (6,860) -
adjustments on held-for-trading
financial instruments
Loss before income taxes (29,090) (53,978)
Taxes recovered (paid) 9 (8)
Future income tax recovery 169 5,540
Loss for the year (28,912) (48,446)
Other comprehensive income (loss)
Unrealized gain on available-for-sale 603 3,026
financial instruments
Realized gain on available-for-sale (1,530) -
financial instruments upon transfer
Unrealized gain (loss) on foreign
exchange translation of self-
sustaining foreign operations 27,433 (27,780)
Other comprehensive income (loss) 26,506 (24,754)
(2,406) (73,200)
Total comprehensive loss for the year
Basic and diluted loss per share (0.08) (0.16)
Weighted average number of common 358,711 310,068
shares outstanding (thousands)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS`EQUITY AND DEFICIT
(Expressed in Canadian Dollars)
Year ended Year ended
December 31, 2010 December 31, 2009
$`000 $`000
Common shares Shares Shares
(thousands) (thousands)
Balance at beginning of 567,596 428,657
the year 334,158 215,167
Equity line: shares - 3,911
issued for cash, net of
share issue costs - 2,847
Public offering: shares - 132,700
issued for cash, net of
share issue costs - 115,000
Share purchase options 14,308 2,293
exercised 6,085 1,124
Share purchase warrants 100,290 -
exercised 59,504 -
Shares issued for early 3,910 -
settlement of senior
secured notes 2,234 -
Shares issued for 4,102 -
settlement of senior
secured notes 1,461 -
Shares issued on
settlement of Rusaf
contingent payment
requirement 10,573 19,243 - -
Shares issued for
mineral properties - - 20 35
Balance at end of the 709,449 567,596
year 414,015 334,158
Share purchase warrants Warrants
Warrants (thousands)
(thousands)
Balance at beginning of 13,104 24,006
the year 86,178 49,180
Warrants issued - -
pursuant to senior - 8,248
secured notes
Warrants issued - 5,308
pursuant to public
offering, net of share - 57,500
issue costs
Exercised, credited to (5,811) -
share capital (59,504) -
Expired (1,756) (1,185) (28,750) (16,210)
Balance at end of the
year 24,918 6,108 86,178 13,104
Contributed surplus
Balance at beginning of 83,267 21,600
the year
Stock-based 7,469 12,104
compensation
Share purchase options (5,212) (808)
exercised, credited to
share capital
Fair value of share 1,185 16,210
purchase warrants
expired
Future income tax on (169) (1,294)
expired share purchase
warrants
Convertible bond equity - 35,455
component
Balance at end of the 86,540 83,267
year
Deficit
Balance at beginning of (265,713) (217,267)
the year
Nett loss for the year (28,912) (48,446)
Balance at end of the (294,625) (265,713)
year
Accumulated other
comprehensive
(loss)income
Balance at beginning of (24,541) 213
the year
Unrealized gain on 603 3,026
available-for-
sale financial
instruments
Realized gain on (1,530) -
available-for-sale
financial instruments
upon transfer
Accumulated unrealized 27,433 (27,780)
gain on foreign
exchange translation of
self-sustaining foreign
operations
Balance at end of the 1,965 (24,541)
year
Total accumulated (292,660) (290,254)
comprehensive loss and
deficit at end of the
year
TOTAL SHAREHOLDERS`
EQUITY
509,437 373,713
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2010 and 2009
(Expressed in Canadian Dollars)
years ended December 31
2010 2009
$`000 $`000
Operating activities
Loss for the year (28,912) (48,446)
Items not involving cash
Production non-cash charges 4,213 1,034
Pre-development non-cash charges 1,077 2,791
Exploration non-cash charges 291 313
Depreciation 226 152
Future income tax recovery (169) (5,540)
Loss on sale assets - 15
Net realized gain on available-for- (489) -
sale financial instruments
Net realized loss on held-for- 67 -
trading financial instruments
Unrealized (gain)loss on held- for- (86) 2,215
trading on financial instruments
Unrealized loss on held- for- 3,606 -
trading on financial instruments
recognized
Unrealized mark-to-market 6,860 -
adjustments on held-for-trading
financial instruments
Mineral properties written off - 154
Non-cash stock-based compensation 4,887 8,284
expense
Unrealized foreign exchange gain (6,613) (3,953)
Depletion 8,444 3,179
Interest expense accrual 64 120
Interest income accrual (227) (519)
Changes in non-cash operating
working capital
Amounts receivable (5,200) (881)
Prepaid expenses (408) 27
Inventory 6,812 (14,846)
Accounts payable and accrued 4,432 651
liabilities
Cash used in operating activities (1,125) (55,250)
Investing activities
Mineral property acquisition costs (51) (61)
Net proceeds on sale of financial 3,527 -
instruments
Proceeds on sale of assets - 64
Additions to property, plant and (229,478) (118,187)
equipment
Net additions to restricted cash (6,204) -
Additional amount advanced under (1,072) -
loan agreement
Reclamation deposits (62) (1,795)
Cash used in investing activities (233,340) (119,979)
Financing activities
Common shares and warrants issued 103,500 143,403
for cash, net of issue costs
Net proceeds received from long
term borrowings 72,478 119,906
Repayment of long term borrowings (2,242) (33,884)
Payment of interest on convertible (10,513) -
debentures
Early settlement of 6,925 senior (4,569) -
secured notes
Advances to related parties - (230)
Cash generated from financing 158,654 229,195
activities
(Decrease)increase in cash and cash (75,811) 53,966
equivalents
Cash and equivalents, beginning of 89,464 33,549
the year
Foreign exchange movement on cash (798) 1,949
and cash equivalents
Cash and equivalents, end of the 12,855 89,464
year
CONSOLIDATED SCHEDULE OF EXPLORATION EXPENSES
(Expressed in Canadian Dollars)
Mineral Property Interests Year ended Year ended
December 31 December 31
2010 2009
$`000 $`000
Burnstone - Exploration
Assays and analysis 2 28
Drilling 70 202
Equipment rental - 3
Geological 75 64
Graphics - 1
Property fees and exploration option 12 -
payments
Site activities 362 269
Exploration expenses incurred during 521 567
the year
Cumulative exploration expenditures, 31,610 31,043
beginning of year
Cumulative exploration expenditures, 32,131 31,610
end of year
Hollister - Exploration
Assays and analysis 126 209
Drilling 3,724 6,886
Engineering - 712
Environmental, socio-economic and 69 1,690
land
Freight 65 190
General office and administration 1,324 853
Geological 169 150
Property fees and exploration option 108 73
payments
Site activities 2,619 2,955
Exploration expenses incurred during 8,204 13,718
the year
Cumulative exploration expenditures, 58,913 45,195
beginning of year
Cumulative exploration expenditures, 67,117 58,913
end of year
Rusaf Gold - Exploration
Assays and analysis 28 331
Depreciation 291 299
Drilling - 11
Engineering 2 32
Freight 12 86
Geological 71 203
Property fees and exploration option 412 445
payments
Site activities 908 715
Exploration expenses incurred during 1,724 2,122
the year
Cumulative exploration expenditures, 9,661 7,539
beginning of year
Cumulative exploration expenditures, 11,385 9,661
end of year
Other - Exploration
Depreciation - 14
Equipment rental - 50
Freight - 3
Geological - 89
Property fees and exploration option - 2
payments
Site activities and closure 1 27
Exploration expenses incurred during 1 185
the year
Cumulative exploration expenditures, 4,354 4,169
beginning of the year
Cumulative exploration expenditures, 4,355 4,354
end of year
Total exploration expenses incurred 10,450 16,592
during the year
Total cumulative exploration 104,538 87,946
expenditures, beginning of year
Total cumulative exploration 114,988 104,538
expenditures, end of year
CONSOLIDATED SCHEDULE OF PRE-DEVELOPMENT EXPENSES
(Expressed in Canadian Dollars)
Mineral Property Interests Year ended Year ended
December 31 December 31
2010 2009
$`000 $`000
Burnstone - Pre-development
Cumulative pre-development 39,174 39,174
expenditures, beginning of year
Cumulative pre-development 39,174 39,174
expenditures, end of year
Hollister - Pre-development
Depreciation 769 1,732
Property evaluation (87) 439
Underground access and 11,160 20,152
infrastructure development
Operational costs 1,247 2,487
Pre-development expenses before the 13,089 24,810
following
Office and administration 308 1,059
Pre-development expenses incurred 13,397 25,869
during the year
Cumulative pre-development 82,723 56,854
expenditures, beginning of year
Cumulative pre-development expenses, 96,120 82,723
end of year
Total pre-development before the 13,089 24,810
following
Office and administration 308 1,059
Total pre-development expenses 13,397 25,869
incurred during the year
Total cumulative pre-development 121,897 96,028
expenditures, beginning of year
Total cumulative pre-development 135,294 121,897
expenditures, end of year
1. NATURE OF OPERATIONS
Great Basin Gold Ltd. ("Great Basin" or "the Company") is incorporated under the
laws of the Province of British Columbia and is a mineral exploration and
development company that is currently focused on delivering two advanced stage
projects: the Hollister Project on the Carlin Trend in Nevada, USA and the
Burnstone Project in the Witwatersrand Goldfields in South Africa. The Company,
currently recognized as an emerging producer, will migrate to the rank of a
junior gold producer as production from these two projects increase during 2011
and 2012.Over and above the exploration being conducted at the above mentioned
properties, greenfields exploration is being undertaken in Tanzania and
Mozambique.
2. BASIS OF PREPARATIONS AND PRINCIPLES OF CONSOLIDATIONS
These consolidated financial statements have been prepared in accordance with
Canadian Generally Accepted Accounting Principles ("Canadian GAAP"), which
differ in certain respects from accounting principles generally accepted in the
United States of America.
The principal accounting policies applied in the preparation of these financial
statements are set out in the notes to the annual financial statements. These
policies have been consistently applied in all years presented, unless otherwise
stated.
These financial statements include the accounts of the Company and its wholly-
owned subsidiaries. All significant intercompany balances and transactions have
been eliminated.
These annual consolidated financial statements are available through the
internet on SEDAR at www.sedar.com.
3. ACCOUNTING DEVELOPMENTS
International Financial Reporting Standards
Canadian public companies will be required to prepare financial statements in
accordance with International Financial Reporting Standards ("IFRS"), as issued
by International Accounting Standards Board, for financial years beginning on or
after January 1, 2011. Effective January 1, 2011, the Company adopted IFRS as
the basis for preparing its consolidated financial statements. The Company will
issue its financial results for quarter ended March 31, 2011 prepared on an IFRS
basis and will provide comparative data on an IFRS basis required.
4. SEGMENT DISCLOSURE
The Company operates in a single reportable operating segment, the exploration
and development of mineral properties. Geographic information is as follows:
Assets December 31 December 31
2010 2009
$`000 $,000
Canada
Assets other than mineral property
interests 11,676 76,836
Tanzania
Assets other than mineral property
interests 618 729
Mineral property interests 64,066 36,467
United States
Assets other than mineral property
interests 21,640 28,344
Mine development and equipment 40,509 37,660
Mineral property interests 67,264 79,136
South Africa
Assets other than mineral property
interests 26,308 28,476
Mine development and equipment 471,642 153,320
Mineral property interests 114,320 107,316
548,284
818,043
Revenue December 31 December 31
2010 2009
$`000 $`000
United States
Ore sales 99,706 33,738
During 2010 the Company generated revenue of $99.7 million (US$96.5 million)
(2009: $33.7 million (US$28 million) from its Hollister operation.
Refined gold and silver were sold to Red Kite Explorer Trust under the terms of
an off-take agreement, whilst unprocessed ore was sold under the terms of an ore
purchase agreement to Newmont Mining Corporation (2009: Various toll milling and
ore purchase agreements to Newmont Mining Corporation and Echo Bay Minerals
Company ("Kinross")).
5. SUBSEQUENT EVENTS
Subsequent to December 31, 2010
(a) Bought deal public offering
The Company closed a $75 million bought deal public offering, as well as the 15%
over allotment option, on February 23, 2011 with the proceeds from this
transaction mainly being utilized for working capital requirements during the
production build-up at the Burnstone Mine. The Company issued 33.7 million
shares on closing this transaction, for net proceeds of $81.7 million.
(b) Term loan facility
The Company executed the credit Agreement relating to a US$60 million Term Loan
Financing with the Credit Suisse AG on February 23, 2011. The loan has a term of
4 years and is repayable in quarterly instalments commencing September 2011, and
will bear interest at a premium of 3.75% over the month US LIBOR rate. The
Company will execute a zero cost collar hedging program, consisting of a total
of approximately 105,000 Au eqv oz spread over a 4 year term, prior to draw
down. Draw down on this facility is set for March 15, 2011 with approximately
US$52 million to be applied towards full and final settlement of the senior
secured notes issued in December 2008.
The full set of financial statements and Management Discussion and Analysis are
available on Great Basin`s website: www.grtbasin.com
Approved by the Board of Directors
Ferdi Dippenaar Ronald W Thiessen
Director Director
Ground Floor, 138 West Street 1500 Royal Centre, 1055 West
Sandown, Johannesburg Georgia Street,
South Africa Vancouver, BC Canada V6E 4N7
Tel 011 301 1800 Toll Free 1 800 667'2114
Fax 011 301 1840
www.grtbasin.com
16 March 2011
Johannesburg
Sponsor
Nedbank Capital
Date: 16/03/2011 12:00:00 Supplied by www.sharenet.co.za
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