Yet more Ferdi PR...
The media sure likes to talk to Ferdi....
Great Basin Gold Lists on JSE
By Lindsay Williams
30 Oct 2006 at 08:22 AM EST
JOHANNESBURG (Business Day) -- Ferdi Dippenaar, chief executive of Great Basin Gold [TSX:GBG], a north American company listed on the Toronto stock exchange and is now listed on the JSE, speaks with Classic Business Day on the company, gold, and the listing.
LINDSAY WILLIAMS: We’ll come to that later on, but let’s find out about the company and its prospects. Ferdi’s in the studio with me. Ferdi background to Great Basin please.
FERDI DIPPENAAR: Yes well first of all it’s great to be back. A bit of background to the company. I joined the company in January this year. at the time I evaluated the prospects I looked at the two assets. One in South Africa, the old Burnstone project. I call it the old one, I kind of refer to that one as well; a project in North America, in Nevada on the Carlin Trend, epithermal vein systems – very different to South Africa. But if we dwell with that for a while, it’s a decline, it’s already under ground, it’s already under construction, and we’re doing trial mining. so it’s a lot further ahead in terms of delivery compared to the Burnstone Project, so that’s going pretty well.
LINDSAY WILLIAMS: So let’s just take a step back again if I may – you are still then a fully blown exploration company rather than a company that’s actually producing any gold?
FERDI DIPPENAAR: No I would say we’re further than exploration. We’d probably be classified as a gold company in construction mode. We’ve got two mines under construction, as I said. Well in Nevada to convert the resource to reserve, you actually have to complete the decline and then start drilling, and we’ve completed about 60% of the drilling as part of this conversion, putting the ore model together. That’s done well. if that goes ahead with mining, which it should starting late next year, the company will be producing 100,000 ounces – our share from that operation - by 2008. And that’s for a period of six years.
LINDSAY WILLIAMS: That’s a decent deposit but I think the Burnstone development is the one you’re really excited about?
FERDI DIPPENAAR: I am and that’s probably the one where the credibility of the Great Basin team will be built around. it’s a 7-million ounce resource. We’ve got a 2.4 million ounce mining reserve. We’ve completed the bankable feasibility in May, its shallow deposit, it’s a low cost in cash cost. Even in capital cost pit terms. It’s a project that we started on 7 July – we actually started the box hole or the portal. We’ve gone underground on 11 August. We had our first blast nearly 170-meters down the decline. So we’ve actually started the project and I think that’s the excitement about it.
LINDSAY WILLIAMS: So it’s a shallow deposit and that automatically means that costs come down. What sort of costs are you actually talking about in rand terms?
FERDI DIPPENAAR: In rand terms R57,000 (US$7564) per kilogram and it is, it’s a function of the shallow nature of the ore body. We actually intersect reefs at about 220 meters below surface and the current planned depth of mining, ultimately, is just under 1,000 meters. The vertical shaft is 500-meters. It will also be serviced by a three kilometer decline as I said, so this is easy stuff.
LINDSAY WILLIAMS: And the life of the mine?
FERDI DIPPENAAR: 14 years at this stage.
LINDSAY WILLIAMS: OK so you’ve got six years over there, you’ve got 14 years over here, you’re going to be on the acquisition trail as well. is that one of the reasons why you’ve achieved this secondary listing today?
FERDI DIPPENAAR: No. the secondary listing today was really more focused on the future. First of all I think that the fact that we’re building the mine in South Africa, two-thirds of our production as we see it at the moment coming from the project. We’ve had such a huge amount of interest and you just don’t build a mine like this in the backyard of a gold mining country and not expect interest. So based on the interest we received – institutions as well – its giving the opportunity to investors and of course get the additional exposure to the north American project, and then should we optimize the mine any further, and we are doing that – we’ve got exploration program going at Burnstone – if we do have another million or million and a half ounces to the reserve phase, we’ll optimise the mine. Possibly produce more for longer.
LINDSAY WILLIAMS: What’s been the reaction from the institutions? You’re obviously out here, you’ve been doing a bit of a road show, people are always hungry for new projects, specifically when it comes to resources, despite the fact that they’ve come down a little bit recently. Have you had a very favourable reaction?
FERDI DIPPENAAR: I have. I’ve been pleasantly surprised. Not to the extent of the reaction, but I think its been favourable. The fact is we offer a different alternative in terms of investment. I think you find the three majors being slightly more mature in terms of their production and life of mine profile and what we offer at the moment, at least is two projects in construction phase with a lot of life of mine left, as the value gets added as we get into production.
LINDSAY WILLIAMS: What’s your view as a member of the gold mining industry about the state of the gold market at the moment? it wasn’t so long ago that people were writing in often – I noticed this afternoon once the New York market opened, getting close to $600 an ounce in the first half hour of trading, do you think the recent dip is just that? Just a dip and we can go on from here?
FERDI DIPPENAAR: Yes, I think if you speak to the chartists, they did expect it to correct. They expected the correction to be slightly lower than what it was. It is trying to break through a psychological level of $600 an ounce. I think the trend is still intact. And if you have a look at the political environment in the world, the cost of energy, I don’t think its going to change in the short-term. We’ll probably have the benefit of high gold prices for a few years to come and from our perspective of course, we’d like to be in production as soon as possible and have the benefit of that gold price.
LINDSAY WILLIAMS: The secondary listing isn’t immediately going to attract an enormous amount of volume, but that’s what people want obviously. They want another gold counter. We’ve got some really big players here, but they want something that they can get really highly geared up to. DRD Gold [Nasdaq:DROOY] is one that is really geared up to the rand price of gold. They want another one though but there’s been no trade this afternoon, well up until 15h30 but I’ll check the price in a moment. but up until then there was nothing. R15 (US$2) bid – what are you going to do about that Ferdi? Come on now.
FERDI DIPPENAAR: Well, on a day like today one must assume that something must go wrong and something did go wrong. Its basically a bit of paperwork but that’s been held up between here and Toronto. But we will see liquidity in the market, so I was told at about 15h30 there will be liquidity in the market and we will start seeing some trade’s in the stock. We also have approximately 20% of our shares are held by South African shareholders which…
LINDSAY WILLIAMS: Can you tell us more about that?
FERDI DIPPENAAR: Well they owned the mining or mineral rights and as part of buying them, GBG issued them stock or equity in return. That was held offshore. That was held in Toronto as part of the dispensation by the South African Reserve Bank with a secondary listing, of course the shares now come back to South Africa and not that we expect to see a lot of them flow back into the market, but definite liquidity. I think the other thing one must expect, as you start trading on the first day, every share that’s bought in South Africa, must be taken off the market in Toronto, and on the first day you will have a six hour delay just in terms of timing. But that will filter out of the system by tomorrow. I actually expect liquidity to pick up quite nicely.
LINDSAY WILLIAMS: Good. Ferdi good luck with this secondary listing. Good luck with the Burnstone Project in particular, R57,000 (US$7564) per kilo and with the price being – well I’ll give you the price later on once I’ve done my calculations, but it looks like an attractive prospect.
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