Great Basin Gold Ltd. (fka GBGLF)

[amarksp]

Burnstone has attractive IRR at anything above SA Rand 120,000 per kilo = $600 POG. Thus, Burnstone will go into production. The final decision in 2007 probably relates more to exactly how GBN builds the mine, rather than whether GBN builds it.

I would prefer that the construction period be shorter and the ounces produced be greater. Namely, a 2 year construction period and 400,000 ounces a year. But my preferences do not appear feasible for this Burnstone thin vein mining, which cannot be mechanized much. I am hoping some changes can be made to speed up the construction time period.

Burnstone will be funded primarily with about 70% debt. Unlike banks in most countries, S Africa banks are happy, willing and able to lend to finance mining projects, but GBN will be required to hedge ounces for this loan. Between current cash including this latest PP and Hollister cash flow, Burnstone 30% equity financing should be substantially complete.