GREAT BASIN GOLD LIMITED: Exhibit 99.1 - Filed by newsfilecorp.com
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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 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 2012 |
March 31 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) |
($20,341) |
| Cash generated
from (utilized by) operations ($’000) |
$565
|
($9,482) |
| Adjusted loss per
share |
($0.03) |
($0.02) |
Hollister
The Nevada operations produced 16,240 Au eqv oz1 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 doré
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.
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1 Gold
equivalent ounces calculated using metal price of US$1,400/oz for Au and
US$30/oz for Ag.
2
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 |
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Michael Curlook in North America |
1 888 633 9332 |
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Barbara Cano at Breakstone Group in the USA |
(646) 452-2334 |
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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.
3
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:
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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; |
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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; |
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uncertainties related to the ability to obtain necessary
licenses, permits, electricity, surface rights and title for development
projects; |
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operating and technical difficulties in connection with
mining development activities; |
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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; |
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uncertainties related to unexpected political, judicial
or regulatory proceedings; |
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changes in, and the effects of, the laws, regulations and
government policies affecting our mining operations, particularly laws,
regulations and policies relating to |
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mine expansions, environmental protection and associated
compliance costs arising from exploration, mine development, mine
operations and mine closures; |
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expected effective future tax rates in jurisdictions in
which our operations are located; |
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the protection of the health and safety of mine workers;
and |
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mineral rights ownership in countries where our mineral
deposits are located, including the effect of the Mineral and Petroleum
Resources Development Act (South Africa); |
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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; |
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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); |
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changes in accounting policies and methods we use to
report our financial condition, including uncertainties associated with
critical accounting assumptions and estimates; |
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environmental issues and liabilities associated with
mining including processing and stock piling ore; |
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geopolitical uncertainty and political and economic
instability in countries which we operate; and |
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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.gov and home
jurisdiction filings that are available at www.sedar.com.