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Sept. 11, 2012 /PRNewswire/ - Great Basin Gold Ltd. ("Great Basin Gold" or the "Company"), (TSX: GBG; NYSE MKT: GBG; JSE: GBG)
announces that it has suspended operations at the Company's Burnstone mine located in the Witwatersrand Basin of
South Africa as at
September 11, 2012. The suspension of all development and production activities follows a recommendation from the Company's strategic review special committee, the formation of which was announced on
August 15, 2012. The recommendation is based on the Company's inability to continue funding the working capital required by Burnstone to achieve cash flow breakeven, which would have taken until
May 2013 at current ramp-up rates. The Company is seeking financing for the immediate costs associated with the shut-down which are estimated in the range of
$30 - $40 million dollars (inclusive of currently overdue accounts payable) together with ongoing monthly costs in the
$1.2 million range for a care and maintenance program once it is developed and implemented. There is currently no certainty that such financing will be made available to the Company.
The Company also wishes to announce the resignation of
Philip Kotze as a director of the Company on
September 6, 2012. Mr. Kotze's contribution as a director was valuable and we thank him for it.
Lou van Vuuren, interim CEO, commented on the suspension:
"While it is disappointing that operations at Burnstone had to be suspended, especially given the recently improved progress there, the Board had to take this step pending the completion of the strategic review process and potential financial restructuring. Burnstone remains a very valuable project with over 6 million ounces of gold in proven and probable reserves 1 and a forecast life of mine in excess of 25 years. The Board thanks the many dedicated and hard-working employees and contractors who contributed to bringing this project from discovery to early stage production. We believe that following the injection of sufficient new capital, this asset will demonstrate its long-term value to investors and employees."Lou van VuurenCEO (interim) __________________________ 1 As per
January 2011 Mineral Reserve Statement less depletion up to
June 30, 2012.
Cautionary and Forward Looking Statement Information