Great Basin Gold Ltd. (fka GBGLF)

[amarksp]

Great Basin's "year of delivery" - Dippenaar
Ollie Madlala
Posted: Thu, 07 Feb 2008
[miningmx.com] -- GREAT Basin Gold is unlikely to make an acquisition any time soon as it focuses on bringing its two projects into production in South Africa and Nevada, CEO Ferdi Dippenaar said.


Great Basin is developing the Burnstone mine in South Africa, which currently has the potential to be a 250,000 oz/year gold mine, but it could be made a larger project, he said.

“This is a year of delivery, and if everything goes according to plan the market will value us differently once we start producing,” Dippenaar told reporters visiting the mine.

“The other reason for us to focus more on delivery is that we can start generating cash so that we won’t have to go back to the market to raise cash should we have to make a big acquisition,” he said.

Other precious metals like platinum were not completely off the radar screen for Great Basin, he said. “We are not about to acquire any platinum assets but we are looking at the metal from an exploration point of view.”


Click Here to subscribe to our daily newsletterThe second project is the Hollister mine on the Carlin Trend in Nevada. A North American mining company, thought to be either Newmont or Barrick Gold, is engaged in talks with Great Basin to acquire the project.

At Burnstone, Great Basin is building a decline shaft to access the relatively shallow deposit and the chances are the project could be bigger than first thought, with drilling proving additional ounces.

“Based on our exploration results, there are about 10 million ounces of gold within this area but our mine plan is designed in such a way that we can only mine up to 3.5 millions ounces for now,” Dippenaar said.

“There is definitely some potential for Burnstone two and Burnstone three,” he said, and further expansion of the mine will only take place once the company had been granted new order mining rights.

. Great Basin, which submitted its application for a new-order mining right in September, expects to be awarded the licence by October this year. The Department of Minerals and Energy has committed itself to a 12-month time line in processing applications.

“We submitted our application in September and we do constantly communicate with the DME and from the look of things we can receive our rights earlier than anticipated,” said Dippenaar.

Great Basin Gold will look at sharing synergies with neighbouring mines to cut down costs. The nearest big gold producer is Harmony Gold’s Evander mine. Dippenaar used to work at Harmony.

“The high costs are affecting the mining industry and if there is a way we can share things such as energy with other mines we will definitely look at it,” said Dippenaar.

The Burnstone project remains unaffected by the current energy crisis, which has slowed production at most South African mines.

“We are in a fortunate position because we do not consume lot of energy, for now we are only sinking the decline shaft and the vertical shaft and we are putting infrastructure in place so our generators can supply adequate power if Eskom power goes off,” he said. Great Basin is installing generators to provide up to eight megawatts (MW) of power. Great Basin draws 2 MW of power from Eskom.