Great Basin Completes Secondary Listing on the JSE Limited in South Africa
Thursday October 26, 9:25 am ET
VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--Oct 26, 2006 -- Great Basin Gold Ltd. ("Great Basin" or the "Company") (TSX:GBG.TO - News)(AMEX:GBN - News) announces that the listing of the issued share capital of Great Basin has been approved by the JSE Limited ("JSE"), the stock exchange in Johannesburg, South Africa. The shares will be listed on the JSE at the commencement of trading on October 27, 2006. This announcement is not a full pre-listing statement or prospectus. Copies of the Pre-Listing Statement can be obtained during normal business hours from October 25, 2006 until November 30, 2006 from the offices of Great Basin at 138 West Street, Sandton 2146, South Africa or from the Company's website at www.greatbasingold.com. At the date of listing, Great Basin's authorised share capital will be comprised of an unlimited number of ordinary shares with no par value, of which 112,665,213 have been issued. Great Basin will be listed in the "Mining" sector, sub-sector "Gold Mining" of the JSE under the abbreviated name "GB Gold".
The Company is also listed on the Toronto Stock Exchange and the American Stock Exchange.
The main purposes of Great Basin's secondary listing on the JSE are to:
- provide a further funding mechanism through which Great Basin can structure and fund opportunities in the Gold sector in both South Africa and Southern Africa, thereby facilitating growth;
- enhance South African investors' awareness of Great Basin, thereby enlarging Great Basin's investor base and increasing trade in its shares; and
- facilitate direct investment by South African residents in Great Basin, resulting in greater liquidity in the Company's shares.
President and CEO Ferdi Dippenaar stated: "We have received a significant amount of interest from stakeholders in South Africa, and through this listing, they can participate in what we believe will be exciting and robust projects."
Great Basin plans to move from an emerging gold producer to a mid-tier gold producer within three years through a well defined strategy of:
- acquiring prospective companies and/or assets;
- continual increasing of its resource base through focused exploration programs; and
- developing its highly prospective projects into high-margin productive units.
Great Basin is in the business of acquiring ownership of, and exploring and developing precious metals deposits. The Company does not have any operating revenue although, historically, it has had annual interest revenue as a consequence of investing surplus funds pending the completion of exploration programmes. For the past three years, Great Basin has focused on two projects, namely the Hollister Development Block Project (a portion of the Hollister Property, previously known as the "Ivanhoe Property") in Nevada, USA, and the Burnstone Project in South Africa. The Company also has a non-core asset, called the Casino Project in Yukon, Canada.
Hollister Property and Hollister Development Block Project
Great Basin holds 100% interest in the Hollister Property, which is located in the north-eastern part of the Carlin Trend, approximately 80 km from Elko, Nevada. The Company's active exploration efforts at Hollister resulted in the discovery and delineation of several high-grade gold-silver vein systems, as well as the identification of a number of other exploration targets, including evidence for potential Carlin-style gold mineralisation at depth.
In 2001, Great Basin outlined an inferred mineral resource in an area now known as the Hollister Development Block ("HDB"). The HDB constitutes approximately 5% (five percent) of the Hollister Property, and is subject to earn-in and joint operating agreements with Hecla Mining Company, details of which are provided in the Pre-Listing Statement. Hecla is earning a 50% interest in the HDB Project by funding and operating a two-stage exploration and development program, designed to take the Project through feasibility and potentially to commercial production. Work is on track to complete the feasibility study in the second quarter of 2007.
A Preliminary Assessment of the HDB Project, completed in April 2002, was updated for use in the JSE listing application. As the study uses inferred mineral resources that are geologically speculative, there is no assurance that the results of the preliminary assessment will be realized. Promising returns are indicated for a 520-ton per day underground mine on the high-grade gold-silver Gwenivere, Clementine and South Gwenivere vein systems. Using US dollars, a gold price of US$450/oz and a silver price of US$7.00/oz, the estimated pre-tax results for 100% of the project from the study are:
- 5.9 year mine life
- Annual production of 150,000 ounces of gold and 760,000 ounces of silver
- Startup capital cost of US$41.3 million
- Operating cost of US$188.28 per ton milled
- Cash cost of US$213.25 per equivalent ounce and total cost of US$258.00 per equivalent ounce
- Pre-tax net present value at 5% discount of US$118 million
- Internal Rate of Return of 78%
Further details of the Preliminary Assessment are provided in a news release dated August 2, 2006 and a September 2006 technical report filed at www.sedar.com.
Burnstone Project
Great Basin owns 100% of the Burnstone Project near Balfour in the Mpumulanga Province. The Burnstone Project hosts the Kimberley reef, a geological unit containing moderate to high-grade gold mineralisation that is potentially amenable to underground mining.
A Feasibility Study for Area 1 of the Burnstone Project, at an assumed gold price of US$450 per oz, estimated results from a pre-tax and 100% equity financed model of:
- a 14 year life for the mine, including a 4 year pre-operation period;
- an average annual production of 214,000 oz of gold at full production;
- a capital cost of US$144.5 million;
- an operating cost of US$36.63 per tonne milled;
- a cash cost of US$254.42 per oz of gold; and
- capital and operating costs of US$323.11 per oz of gold.
Further details of the Feasibility Study are provided in a news release dated May 12, 2006 and a May 2006 technical report filed on www.sedar.com.
The Burnstone Project assets comprise a number of old order prospecting rights that were extended under the provisions of the Minerals and Petroleum Resources Development Act and for which applications were made to the Department of Minerals and Energy ("DME") for the conversion of those rights into prospecting rights. All the said applications for conversion of old order prospecting rights were accepted by the DME. The extent of these old order prospecting rights is approximately 30,000 hectares. Several of these rights have been received (see September 7, 2006 and October 23, 2006 news releases).
The Company secured the surface rights comprising the total proposed mining area by way of options to purchase. The land in question comprises 2,273 hectares. A portion of the Burnstone Project is subject to a 2% net smelter royalty in favour of GFL Mining Services Limited. This comprises 2% (at a gold price of above USD$450) of approximately 764,200 oz of the gold that would be produced. Great Basin is presently involved in discussions with Tranter Gold (Proprietary) Limited regarding broad based black economic empowerment participation in the Burnstone Project. These discussions are subject to the necessary board and regulatory approvals.
Casino Project
Great Basin owns a property which is non-core to the business of the Company, located in Yukon, Canada. The Casino Project hosts a large-tonnage mineral resource that is potentially exploitable by open-pit mining, but no detailed engineering studies have recently been performed to assess its current viability. The Casino property is currently subject to a farm out agreement.
For more information on Great Basin and its projects, please visit the Company's website or call Investor Services in Canada at 604-684-6365 or within North America at 1-800-667-2114.
Ferdi Dippenaar, President and CEO
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