File image: Reuters File image: Reuters
For the year ended December, Canadian mineral exploration and development company Great Basin Gold (GBG), which is engaged in the Burnstone Project in the Witwatersrand Goldfields in South Africa, almost halved its net loss compared with the previous year.
The group reduced its net loss from C$48.4 million in 2009 to C$28.9 million in 2010.
This translated into a basic and diluted loss per share of C$0.08 versus C$0.16 previously.
Revenue for the year grew from C$33.7 million to C$99.7 million. This was all generated from its Hollister operation in the US state of Nevada.
Refined gold and silver were sold to Red Kite Explorer Trust under the terms of an off-take agreement, while unprocessed ore was sold under the terms of an ore purchase agreement to Newmont Mining Corporation (2009: Various toll milling and ore purchase agreements to Newmont Mining Corporation and Echo Bay Minerals Company (“Kinross”)).
Subsequent to the year-end, the company closed a C$75 million bought deal public offering, as well as the 15% over allotment option, on February 23, 2011 with the proceeds from this transaction mainly being utilised for working capital requirements during the production build-up at the Burnstone Mine. The company issued 33.7 million shares on closing this transaction, for net proceeds of C$81.7 million.
The company also executed the credit Agreement relating to a US$60 million Term Loan Financing with the Credit Suisse AG on February 23, 2011. The loan has a term of 4 years and is repayable in quarterly instalments commencing September 2011, and will bear interest at a premium of 3.75% over the month US LIBOR rate. The company will execute a zero cost collar hedging programme, consisting of a total of approximately 105,000 Au eqv oz spread over a 4 year term, prior to draw down. Draw down on this facility is set for March 15, 2011 with approximately US$52 million to be applied towards full and final settlement of the senior secured notes issued in December 2008.
Great Basin Gold, currently recognised as an emerging producer, will migrate to the rank of a junior gold producer as production from the Hollister and Burnstone projects increase during 2011 and 2012. Over and above the exploration being conducted at these two projects, greenfields exploration is being undertaken in Tanzania and Mozambique. - I-Net Bridge