To view the PDF file, sign up for a MySharenet subscription.

GREAT BASIN GOLD LIMITED - GBG - UPDATES HOLLISTER MINERAL RESOURCE AND RESERVE ESTIMATES

Release Date: 05/09/2012 07:32
Code(s): GBG     PDF:  
Wrap Text
GBG - UPDATES HOLLISTER MINERAL RESOURCE AND RESERVE ESTIMATES

 GREAT BASIN GOLD LIMITED                     

 1108 - 1030 West Georgia St.
  Vancouver, BC
  CanadaV6E 2Y3
  Toll Free: 1 888-633-9332
  South Africa 27 (0) 11 301 1800
  www.grtbasin.com



GREAT BASIN GOLD UPDATES HOLLISTER MINERAL RESOURCE AND RESERVE ESTIMATES
AND OPERATING RESULTS FOR HOLLISTER AND BURNSTONE


September 4, 2012, Vancouver, BC - Great Basin Gold Ltd. (“Great Basin Gold” or the “Company”), (TSX: GBG;
NYSE MKT: GBG; JSE: GBG) announces updated mineral resource and reserve estimates for the Company?s
Hollister Gold Project (“Hollister”) on the Carlin Trend in Nevada, USA as at June 30, 2012. The updated mineral
resources and reserves reflect depletion in excess of 370,000 tons which yielded approximately 400,000 gold
equivalent ounces (“Au eqv oz”) since commencement of trial mining in 2008. The underground drilling program
over the past 18 months has been focused on increasing confidence in the estimates of mineral resources and
reserves to allow for improved mine planning and forecasting. In addition, the underground drilling focused on
delineating material from the Tertiary volcanic-hosted disseminated gold mineralization and the basement meta-
sediment hosted gold–silver low sulfidation epithermal veins. Future drilling will seek to increase the mineral
resource and reserves to extend the life of the project.

Mineral Resources

The mineral resource estimate for Hollister reflects important additional information established from on-going
underground drilling and trial mining since the last resource estimate in September 2010. The resource estimate,
which is based on an in-situ epithermal vein wireframe model and a Tertiary-hosted mineralization wireframe and
grade shell model, is now informed by 12,312 grade intersections, from a combination of 630 surface, 941
underground stope delineation and infill/cover boreholes, and 5,547 ore control channel samples taken during trial
mining. The drilling program provided infill data to further delineate stopes for trial mining, which significantly
improved the understanding of the lateral and vertical geological continuity of the vein systems. Trial mining has
generated geological mapping and channel sampling data that is being used for empirical reconciliation of the
resource wireframe model versus actual excavated vein. As a result, more stringent parameters can now be
applied to Measured and Indicated classifications.

The current estimates are based on drilling, channel sampling and depletion of material mined to June 30, 2012.
The informing data obtained from the underground drilling campaign and trial mining to date has increased the
confidence in the resource estimate and also resulted in a decrease in the estimated minable vein width. The
combination of more rigorous geological and vein modeling with narrower vein widths (averaging 1.6 feet),
resulting in reductions in the estimated epithermal vein resources included in the model. Silver (“Ag”) grades
included in the resource update have also declined as a result of the inclusion of the Tertiary volcanic hosted
disseminated material where trial mining has indicated a lower Au/Ag ratio.

                                                                                                               
                                                                                                                          Au Eq
                        Cut-off     Tonnes        Tons       Au         Au      Au oz       Ag       Ag         Ag Oz      Oz
CLASSIFICATION           oz/t        (000)        (000)      oz/t       g/t     (000)       oz/t     g/t        (000)     (000)
Veins Measured              0.10         170        187      0.922     31.60       173        5.8    197         1 079       196
                            0.15         146        161      1.054     36.11       170        6.5    221         1 039       192
                            0.20         126        139      1.192     40.85       166        7.2    248         1 006       187

Veins Indicated             0.10         729        804      0.404     13.86       325        1.9      63        1 488       357
                            0.15         536        591      0.506     17.33       299        2.2      76        1 309       327
                            0.20         424        467      0.593     20.34       277        2.5      86        1 175       302
Tertiary                    0.10         244        269      0.939     32.20       252        2.0      69         539        264
Indicated                   0.15         132        145      1.637     56.13       238        3.6    122          516        249

                            0.20           86         95     2.405     82.47       229        5.2    179          497        240

Total Indicated             0.10         973      1 073      0.538     18.46       577        1.9      65        2 027       621
                            0.15         667        736      0.729     24.99       536        2.5      85        1 825       575
                            0.20         510        562      0.900     30.87       506        3.0    102         1 672       542

TOTAL M & I                 0.10       1 143      1 260      0.595     20.41       750        2.5      85        3 106       817
RESOURCES                   0.15         813        897      0.787     26.99       706        3.2    110         2 864       767
                            0.20         636        701      0.958     32.85       672        3.8    131         2 678       729

                                                                                                                           Au Eq
                       Cut-off     Tonnes        Tons       Au         Au      Au Oz       Ag          Ag        Ag Oz       Oz
CLASSIFICATION          oz/t        (000)        (000)      oz/t       g/t     (000)       oz/t        g/t        (000)     (000)
Veins Inferred             0.10         508        560      0.254      8.72       142         1.1          36       590       155
                           0.15         324        358      0.329     11.29       118         1.2          43       446       127
                           0.20         224        247      0.399     13.66        99         1.4          49       351       106

Tertiary Inferred          0.10         777        856      0.204      7.01       175         0.3          11       282       181
                           0.15         219        241      0.426     14.62       103         0.9          30       209       107
                           0.20         132        146      0.593     20.33        87         1.2          40       171         90

TOTAL                      0.10       1 285      1 416      0.224      7.68       317         0.6          21       872       336
INFERRED                   0.15         543        599      0.368     12.63       221         1.1          37       654       235
RESOURCES                  0.20         357        393      0.471     16.14       185         1.3          45       521       196

Notes:
1 Gold equivalent ounces (Au eqv oz) were calculated by using the following metal prices: US$1,400/oz for Au and US$30/oz for Ag.
Metallurgical recoveries are not applied to resource values; contained metal estimates assume 100% recoveries.
2 Parameters for Measured = 50 feet (1/2 range), minimum number of informing samples 12; Indicated = 100 feet (1 x range), minimum
number of informing samples 8; Inferred = 750 feet (7.5 x range), minimum number of informing samples 4.

Exploration Progress

Over the last year, work has continued on the collation and review of all geophysical, geological and surface
drilling data for the property, with the intent of better defining the basement structures that control mineralization at
Hollister. Detailed surface mapping has also identified hydrothermal vent and eruptive centers – areas that
indicate the existence of long-lived geothermal activity and potential additional deposition of Au-Ag mineralization
at depth. Targets outside the Clementine-Gwenivere vein systems have also been delineated from this work, and
will be prioritized for follow-up. Drilling (which has been approved by the Bureau of Land Management) is initially
planned for the Hatter target (to upgrade inferred resources to mineral resource status) and the Velvet – Butte
areas that locate north and north-west of the current underground activity. The Hatter target requires a minimum
of eight boreholes to establish an additional Inferred mineral resource. The mineralization at Hatter manifests as
two distinct N-S and E-W vein systems, which may indicate different phases of mineralizing fluids.

Mineral Reserves

Within these mineral resources, mineral reserves have been delineated that are available for mining as at June
30, 2012, providing an update to the estimate in January 2011. The mineral reserves have been estimated at a
cut-off grade of 0.25 oz/t Au for the epithermal veins and 0.15 oz/t Au for the Tertiary mineralization. The cut-off
grades are based on an analyses of fully diluted pay limit (break even) grades which incorporate a gold and silver
price of US$1400/oz and US$30/oz, respectively, and estimated costs for mining, ore transport, milling, and
royalties. The break even grade for epithermal veins is 0.42 oz/t Au, and for the Tertiary mineralization 0.25 oz/t
Au. Mineral reserves total 0.46 Mt grading on average 0.88 oz/t Au and 2.9 oz/t Ag yielding 0.50 million Au eqv
oz.

                                                                                                                                    
                              Tonnes         Tons         Au           Au        Au oz       Ag        Ag      Ag oz       Au eqv   Au eqv                                                                                                                      oz
  CLASSIFICATION               (000)         (000)        oz/t         g/t       (000)       oz/t      g/t     (000)        oz/t        oz
                                                                                                                                     (000)
  Veins Proven                    90        100        0.976       33.46          98         4.7      163        474       1.078      108
  Veins Probable                 266         295        0.641       21.98        189         2.2        76       652       0.688      203
  Tertiary Probable              109         121        1.395       47.82        168         2.9        98       344       1.587      191
  Total Probable                 375         416        0.860       29.48        357         2.4        82       996       0.950      394
  TOTAL P & P RESERVES           465         516        0.882       30.26        455         2.9        98     1 470       0.974      502

Notes:
1 Mineral reserves are fully diluted, and grades adjusted for metallurgical recoveries of Au (92%) and Ag (75%).
2 Metal prices of US$1,400 Au and US$30 Ag have been applied.

It is important to note that the mineral reserves only address that material available for mining above the 4930
Level, which is the current lower development level on the operation. The mining widths that have been planned
are believed to be achievable based on previous trial mining activities on the epithermal vein system and the
overlying Tertiary volcanic “disseminated” style. The Tertiary mineralization occurs in broad pod-like style zones
of gold concentration that are generally developed around very high grade, narrow structures, sometimes linked to
underlying epithermal veins. The maximum stope design of 8 feet is considered very conservative, and, coupled
with the 10 foot pillar left around these areas, offers significant tons and grade upside through mining method
optimization. Considerable upside exists with development of the Tertiary reserves as an important ore source
through a combination of maximizing access and stoping options from the trackless infrastructure afforded by the
spiral ramp, as well as optimization of pillar/backfill designs, which will maximize profitable extraction.

Continued exploration drilling in close proximity of the current mine infrastructure is expected to extend the
currently estimated minimum five year mine life with additional vein structures delineated. Step-out drilling
targeted to increase the Mineral Resource of the project can be accelerated once the Environmental Impact Study
is completed which is expected to occur this year

The Company is currently preparing an updated detailed mine schedule based on the updated reserves A
preliminary updated economic analysis of the Nevada operations based on the updated reserves and using metal
prices of US$1,400 Au/oz and US$30 Ag/oz indicates a range of after-tax net present values (“NPV”) at June 30,
2012 of approximately US$170 to US$190 million based on a 5% discount rate and a five year life of mine.
Increasing the gold price over the life of mine to US$1,500/oz results in an NPV range of approximately US$190
to US$210 million.
                     
Operational Performance

Nevada

Preliminary production results for July and August 2012 indicate an improvement relative to the previous quarter
with an average of 6,500 Au eqv oz sold per month, compared to an average of 5,000 Au eqv oz per month sold
in Q2 2012. The 0.69 Au eqv oz/t average grade from trial mining for July and August 2012 also compares
favorably to the 0.63 Au eqv oz/t trial mined in Q2 2012. Further improvement is expected as additional higher
grade stopes from the tertiary material becomes available. The Esmeralda mill is performing as planned with
recoveries of 92% Au and 48% Ag thus far for Q3 2012. Cash costs for Q3 2012 are expected to benefit from the
lower milling costs now that doré has been capable of being poured on site since June 2012.

Burnstone

Ore development in July and August 2012 averaged 888 meters per month, a 50% improvement on the monthly
average of 590 meters achieved in Q2 2012. The improvements to the temporary water reticulation system
reported on earlier had a positive impact on ore development. The Company will be taking over the underground
waste development following the termination of this contract with Grinaker Lta in August 2012, which is expected
to yield an estimated cost saving of $1.2 million per month as well as improved efficiencies from development
teams and trackless equipment. Five thousand and fifty (5,050) square meters was stoped during July and August
2012 with focus remaining on development until phase 1 of the permanent water reticulation system is completed
by the end of September 2012. Shaft availability has improved with the completion of the spillage decline down to
shaft bottom during August 2012. 180,000 tonnes at an average head grade of 1.2 g/t were processed by the
plant for July and August 2012 with 4,280 ounces sold during the period. The head grade of material delivered to
the plant remains impacted by the development/stoping ratio which is only expected to improve once stoping
increases later on in 2012.

Strategic Review and Liquidity Challenges

The Special Committee of the Board continues to evaluate refinancing and asset sell-down alternatives and is
endeavouring to work with all stakeholders to achieve an acceptable resolution of its near term liquidity
challenges. A range of viable options remain possible however the Company is not yet in a position to provide
any guidance as to if and when an announcement in this regard will be made.

Lou van Vuuren, interim CEO, commented: “Our ongoing delineation drilling and trial mining results continue to
confirm the prospectivity of the Hollister property, and has also increased our confidence in the reported resources
and reserves. With the completion in the June 2012 quarter of the Upper Zone spiral ramp as well as 4930 Level,
which provides a new access level to the mine and the higher grade Clementine No. 18 and 20 veins for trial
mining, the focus will continue to be on better delineation of mineralization that is accessible from current
underground infrastructure. As underground development continues, there will be further opportunities to drill-test
for extensions to a number of high grade zones that have been identified from the evaluation of the Butte
bounding-fault structure as well as Hatter Graben system. Operationally we are seeing an improvement with more
expected as the Nevada operations return to planned production levels and Burnstone completing the remaining
critical infrastructure. The Company continues to receive considerable interest in its projects from qualified
financiers and industry players and with the information in this news release now having been disseminated we
will be in a position to accelerate our strategic process.”


The mineral reserve estimates were completed by Martin Cooper, MGSSA, and the mineral resource estimates by
Freddie de Bruin and John Murgatroyd, Pr.Sci.Nat., all of Deswik Mining and Resource Consultants, under the
supervision of Phil Bentley, Pr.Sci.Nat., Great Basin Gold?s Vice President: Geology & Exploration and Dana
Roets, FSAIMM, Great Basin Gold?s Chief Operating Officer, both Qualified Persons as defined by Canadian
National Instrument 43-101 (Disclosure Standards for Mineral Projects), who have reviewed and approved the
technical information in this news release.

Lou van Vuuren
CEO (interim)


                                                                                                                  4
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 Michael Curlook, Head of Investor Services at 1-888-633-9332.


Samples collected from the Hollister Development Block Project are delivered to Inspectorate America Corporation
(Inspectorate) in Sparks, Nevada.

Information Concerning Estimates of Measured, Indicated and Inferred Resources

This news release also uses the terms “measured resources”, ”indicated resources” and “inferred resources”. The Company advises investors
that although these terms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for
Mineral Projects), the U.S. Securities and Exchange Commission does not recognize them. Investors are cautioned not to assume that any
part or all of the mineral deposits in these categories will ever be converted into SEC-recognised reserves. [Some are reserves under
Canadian standards.] In addition, „inferred resources? have a great amount of uncertainty as to their existence, and economic and legal
feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under
Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, or economic studies
except for Preliminary Assessment as defined under 43-101. Investors are cautioned not to assume that part or all of an inferred resource
exists, or is economically or legally mineable.
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 related to the Company?s liquidity challenges and need for near term financing
- 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.

5 September 2012 
Johannesburg

Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)


                                                                                                                                                    5

Date: 05/09/2012 07:32:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Share This Story