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GBG - Great Basin Gold Limited - Confirm filing of financial results for the
quarter ended March 31, 2012
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")
GREAT BASIN GOLD REPORTS OPERATIONAL AND FINANCIAL RESULTS FOR THE QUARTER
ENDED MARCH 31, 2012
May 15, 2012, Vancouver, BC - Great Basin Gold Ltd. ("Great Basin Gold" or
the "Company"), (TSX: GBG; NYSE Amex: GBG; JSE: GBG) announces that its
interim consolidated financial statements and Management Discussion and
Analysis for the quarter ended March 31, 2012 have been filed, and the
Company refers the reader to those materials for further information. All
currency values in this release are stated in Canadian dollars unless
otherwise indicated. The Company will review the results during an investor
conference call scheduled for May 15, 2012.
3 months ended
March 31 March 31
2012 2011
Recovered Au eqv oz 22,911 29,593
Au eqv oz sold 21,555 20,118
Realized Au eqv price $1,548 $1,309
Revenue ($`000) $33,373 $26,343
Loss from operating activities ($`000) ($7,650) ($377)
Net loss for the quarter ($`000) ($17,770) ($20,341)
Cash generated from (utilized by) $565 ($9,482)
operations ($`000)
Adjusted loss per share ($0.03) ($0.02)
Hollister
The Nevada operations produced 16,240 Au eqv oz* for the quarter (Q1 2011:
24,082 Au eqv oz), compared to the forecast of 19,749 Au eqv oz. Ineffective
carbon stripping, while the final upgrade to the acid wash and carbon
regeneration circuit was being completed, resulted in lower than planned Au
(87%) and Ag (62%) recoveries at the Esmeralda mill during the quarter. The
upgrade to this circuit was completed in late April 2012. All dore will be
poured on site starting May 2012.
Although lower than Q1 2011, Au and Ag grades as well as tonnes extracted
from trial mining were in-line with the production plan and good progress has
been made in improving mining flexibility through additional focus on ore
development. 15,357 Au eqv oz were sold during the quarter (Q1 2011: 17,324)
with the amount of Au eqv oz locked up in carbon and awaiting processing
through third party refiners increasing by 1,352 to 14,447 Au eqv oz on March
31, 2012. It is expected that this carbon will be treated during Q2 2012 and
inventory levels will return to normalized levels by the end of Q2 2012. Cash
costs per ounce of $850/oz were recorded for the quarter (Q1 2011: $670);
costs were impacted by the lower recoveries achieved as well as the
additional transportation costs incurred to process the carbon at the Rand
Refinery in South Africa. Following the recent receipt of the Dam Safety
Permit (which authorizes the impounding of tails, slimes and water on the
TSF) and the updated reclamation bond, construction commenced on the three-
phase expansion of the tailings storage facility (TSF). At the currently
planned production rates, Phase 1 and 2 will provide tailings storage
capacity for the next 6 years and the completion of Phase 3 can extend this
to 25 years. The current facility has sufficient capacity for the impoundment
of tails until the planned completion of the expanded tailings facility.
* Gold equivalent ounces calculated using metal price of US$1,400/oz for Au
and US$30/oz for Ag.
BURNSTONE
The Burnstone operations produced 6,671 Au oz for the quarter (Q1 2011:
5,511 Au oz), compared to the forecast of 6,327 Au oz. Production volumes
were generally in-line with the production plan with a slightly higher
stoping Au grade compensating for minor
volume variances. Square meters available for stoping more than doubled from
December 31, 2011 with over 14,000 square meters being available at March 31,
2012. Available square meters has increased further since that time with
approximately 16,200 square meters being available for stoping at the end of
April 2012. Good progress was made during the quarter on infrastructure
upgrades that will enable the mine to maintain its momentum to meet
increasing development and production targets. Cash costs per ounce for the
quarter of $2,181 were recorded (Q1 2011: $2,471) and were impacted by
additional water handling and employee related costs incurred.
FINANCIAL RESULTS AND CORPORATE MATTERS
Revenue of $33 million was recorded for the quarter, an increase of 27% over
the comparative period in 2011. The increase in revenue can be ascribed to a
7% increase in ounces sold as well as an 18% increase in the realized gold
price. The increase in cash and non-cash costs had a negative impact on the
loss from operations which amounted to $7.7 million (2011: $0.4 million). A
$2 million increase in net interest paid when compared to Q1 2011 is due to
interest for January 2011 being included in the Burnstone project development
costs. A further $2.6 million impairment charge on the loan advanced to our
Black Economic Empowerment partner (Tranter Burnstone (Pty) Ltd ("Tranter"))
was recorded as a result of the decline in the Company`s share price. The
valuation of the zero-cost-collar hedge structures was immaterial for the
quarter as a result of the relative sideways movement in gold prices during
this period.
The Company closed the previously announced $50 million public offering (see
press release March 15, 2012) on March 30, 2012 with the 15% over-allotment
option granted to the Underwriters closing on April 5, 2012. Net proceeds
from the Offering, totalling $54 million, will be used as working capital for
the development and production ramp up at Burnstone. At March 31, 2012, the
Company had net working capital of $15 million, which included $44 million in
cash reserves, and also had $10 million available to be drawn upon under the
US$150 million term facility.
Following negotiations between the Company, Tranter and Investec Bank Limited
("Investec"), a Term sheet was agreed to in late April 2012 to settle a
mutually beneficial proposal whereby the Company provides Tranter with
further financial assistance over a period of 18 months to enable them to
meet their proposed restructured loan repayment obligations to Investec and
thereby remove their current breach of the loan agreement. In terms of the
proposal, Investec will remove all cash margin requirements and also
restructure the repayment in such a matter that the required assistance from
the Company does not impact on its short term cash requirements. The parties
are currently working on finalizing the legal agreements and obtaining the
required approvals to enter into the binding legal agreements. It is
anticipated that this restructured loan and financial assistance agreement
will be executed before May 30, 2012.
Ferdi Dippenaar, Great Basin Gold President and CEO, commented: "Good
progress has been made at both Hollister and Burnstone during the first
quarter of 2012. The focus has been to improve mining flexibility through
the increase in ore development and the establishment of additional stopes,
thereby enabling the Company to meet its annual production targets.
Burnstone achieved its planned quarterly production targets whilst addressing
short-term infrastructural challenges, which impacted on efficiencies in late
2011 and the first few months of 2012. This has resulted in a 6% increase in
ore development meters, up from a monthly average of 845 meters in Q1 2012 to
over 900 meters in April 2012. In addition, ore development ends at the end
of April were 62, which is an improvement of 48% over the 42 ends available
on March 31, 2012. Continued infill drilling has shown no further geological
challenges similar to the Graben fault that significantly influenced our
production build-up at Burnstone in 2011.
The operational benefit from increased flexibility at our Hollister Mine and
the completion of the acid wash and carbon regeneration circuit at the
Esmeralda Mill is expected to allow cash costs from trial mining activities
to decrease to the planned levels for the year."
Ferdi Dippenaar
President and CEO
For additional details on Great Basin Gold Ltd. and its gold properties,
please visit the Company`s website at 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
Shareholders of the Company are reminded that they may request a hard copy of
the complete audited financial statements free of charge upon request from
any of the Investor Services personnel above or from the Company`s Corporate
Office at Tel: +27 (0) 11 301 1800, Fax: +27 (0) 11 301 1840 or Email:
info@za.grtbasin.com.
This document contains "forward-looking statements" that were based on Great
Basin Gold`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 the extent
of mineral resources or reserves which 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 political, 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.
CAUTIONARY NOTE REGARDING NON-GAAP MEASUREMENTS
Cash 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 of operations. 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 cost per ounce/tonne" as determined by the Company compared with other
mining companies. Cash 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 costs should not be considered in isolation
or as a substitute for measures of performance prepared in accordance with
GAAP. Adjusted loss per share is also a Non-GAAP measure and is calculated by
excluding the impact of certain fair-value accounting charges and once-off
transactions. We also make reference in our disclosures to "working capital"
which is also a Non-GAAP measure and includes cash and cash equivalents,
trade and other receivables, current inventories, trade payables and accrued
liabilities. There is material limitations associated with the use of such
Non-GAAP measures.
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.
15 May 2012
Johannesburg
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Date: 15/05/2012 14:30:01 Supplied by www.sharenet.co.za
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