Great Basin Gold Ltd. (GBG) Q2 2012 Earnings Call August 15, 2012 09:00 am ET Executives Ron Thiessen – Chairman & Director Lou van Vuuren – Interim Chief Executive Officer Patrick Cooke – Director Dana Roets – Chief Operating Officer Analysts Josh Wolfson – Stifel Nicolaus Craig Gilbert – Linden Advisors Tony Sonn – Private Investor Jonathan Guy – RBC Capital Markets Presentation Operator
On Slide #2, this is the customary disclaimers slide about the Canadian resource and reserve terminology and forward-looking information. You obviously will have seen it before and a copy is also available on our website together with the slides. I’m now going to turn the microphone over to Ron Thiessen, Chairman of the Board, for an introduction and overview.Ron Thiessen Thank you, Lou. Turning to Slide #3 and saying good morning to everyone on the call. You will have received the material and we’ll start looking at [the Special Committee] announced that the Board of Directors has now initiated a review process to consider a range of strategic alternatives. We have a commitment to preserve and enhance shareholder value, and in light of our continuing financial challenges deriving mainly from the ramp-up productions we’ve been facing at the Burnstone Mine. And we’ll hear about those later in the call. The strategic alternatives that we’re looking at by the Committee primarily include the possible sale of one of the company’s projects, a capital raising, a loan restructuring or even the possible merger of the company. We have retained CIBC World Markets as financial advisor to the Board and the Special Committee. This strategic review process is expected to take a number of weeks, perhaps even months if any of the fundamental changes are on the table. But we will have to make some important decisions in the very near term given our very limited cash resources. The company’s management and Board is working closely with our lenders to potentially restructure the current term loan facilities to improve the company’s cash flow in the short to medium term. Management has also implemented an aggressive cost reduction program involving off-mine site costs and overheads. I wish I could tell you that we’ve reached an understanding with our lenders but we’re not there yet and they are following the strategic review process very closely as well. Importantly, we have reviewed the Burnstone assets with technical consultants retained by the lenders and as disclosed in these quarterly results we’ve determined no impairment charges are warranted at this time.
As part of our corporate restructuring Mr. Dippenaar has resigned as CEO and has been replaced by Mr. von Vuuren as the company’s Interim CEO. As you know, Ferdi oversaw the development of the company’s two gold mining projects during a period which witnessed the worldwide financial crisis, skyrocketing capital costs and other challenges which the company ultimately overcame. We thank him for his dedication and we wish him well in his future endeavors.Lou has been Great Basin’s CFO since 2008 and understands every facet of the company’s operations. He will be of key assistance to the Special Committee and we welcome his assumption of duties as Interim CEO. Despite the setbacks the Board remains confident that startup challenges at these two mines will be overcome and investors will be rewarded for their patience. I’ll now ask Lou to take you through some of the more important financial aspects of the quarter. Over to you, Lou. Lou von Vuuren Thank you, Ron, and moving on to Slide #4 which is a summary of the results for the quarter. Dana, our Chief Operating Officer will get into more detail of the operational performance in the later slide, but in summary ounces recovered and ounces sold at both operations were below plan, and this impacts on our cost and obviously on the earnings as well. In comparison to Q2 2011, which was a record quarter for our Nevada operations as we not only mine exceptionally high-grade material during that quarter but we also sold some of the ounces during that quarter which was recovered in Q1 2011. We do expect a significant improvement from our Nevada operations in the next two quarters as higher-grade areas of the mine have been scheduled for mining, which should deliver results more in line with the historical results of that operation. We know what this asset can do and we will get it back to that level that it has been operating at before. Read the rest of this transcript for free on seekingalpha.com