Great Basin Gold Provides Update, Mineral Resource Estimates Lowered
Great Basin Gold Ltd. (GBG.TO) initiated creditor protection proceedings under CCAA in Canada in September 2012 and has provides this general situation update. Under the CCAA proceedings, the stay of any potential creditor lawsuits was extended until January 14, 2013.
GBG will require additional funding by mid-January 2013 in order to allow the planned sales and/or recapitalization process for its two principal mining projects (Hollister in Nevada, Burnstone in South Africa). While discussions with the lenders about securing additional funding are ongoing, no assurances can be given that the required funding will be obtained. The third quarter MD&A also stated that reviews of the lowered Hollister reserve and resource estimates were also ongoing (the Company recognizes reserves at Hollister for Canadian but not US purposes). Based on ongoing analyses, in-house staff now estimates a further reduction in Hollister resources and reserves is appropriate which implies a 3 year mine life based on the current reserve estimate at current production rates versus the 6 years previously estimated. This life could potentially be extended by further developmental drilling which the Company has not been in a position to fund. GBG has initiated preparation of a NI 43-101 technical report to be filed within 45 days which will provide data and analyses to support these tentative conclusions and to serve as a basis to determine if an impairment charge from the approximately $90 million carrying value of Hollister is now warranted.
The revised mineral resource estimates reflect changes in geological modeling adopted for the purposes of stringent grade control for the mineral reserve estimation process based on trial mining experience. The mineral resources are comprised of epithermal vein and disseminated Tertiary mineralization. At a 0.15 gold ounce per ton ("opt") cutoff grade Measured and Indicated Resources have been reduced to 545,000 gold equivalent ounces (Au eqv oz) in 0.49 Mt grading 0.918 opt Au and 5.7 opt Ag. The estimate also includes 254,000 Au eqv oz in Inferred Mineral Resources. Re-estimated Proven and Probable Mineral Reserves total 187,000 Au eqv oz in 0.29 Mt grading 0.590 opt Au and 2.7 opt Ag2.
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