Great Basin Gold Limited – GBG – Announces Results to June 30, 2012

Great Basin Gold Limited, (NYSE : GBG) reports unaudited results for the three and six months ended June 30, 2012 and other material corporate developments.

Due to technical and infrastructure issues at both principal projects, the Company’s mining operations underperformed in the second quarter.  As a result, Great Basin Gold lost $0.05 per share on revenues of $32.4 million. Revenue shortfalls were primarily due to delays in on-reef ore development and water management problems at the Burnstone Mine and delays in accessing higher grade stopes at the Hollister trial mining project.  Because of the revenue shortfalls, the Company faces a near-term liquidity challenge. The Board has formed a special committee to consider strategic alternatives, including asset divestitures, equity financing, bank refinancing, and other possibilities that are discussed below.  The Company has implemented an aggressive further cost reduction program involving off-site and corporate overhead costs and is also working with its lenders to seek to restructure the current term loan facilities to improve the Company’s cash flow in the near term. In light of the production issues, the Company has again reviewed the carrying value of the Company’s two projects, including with independent technical consultants retained by the lenders.  The Board has concluded that no impairment charge to the carrying value of the Burnstone mine ($653 million) or the Hollister trial mining project ($126 million) is currently warranted.  In other corporate developments, Mr Ferdi Dippenaar has resigned as the Company’s President and Chief Executive Officer, and a director, effective immediately, and Mr Lou Van Vuuren, the Company’s Chief Financial Officer has been appointed interim Chief Executive Officer and a director. Patrick Cooke, a director of the Company and audit committee chair, will temporarily serve as unremunerated interim Chief Financial Officer and the audit committee will be reconstituted during this period.

The Company believes that the technical and infrastructure issues that lead to this quarter’s unexpectedly poor operating performance are substantially behind it, and forecast combined production for the remainder of 2012 to be in the range of 58,000 to 68,000 Au eqv oz.

About Great Basin Gold Ltd. – GBG

Great Basin Gold Ltd. (GBG) is a mining company. GBG is engaged in the acquisition, exploration and development of precious metal deposits. The Company has two projects, the Hollister gold project, which was located on the Carlin Trend goldfield in Nevada, United States (the Hollister Property) and the Burnstone gold mine, which is located in the Witwatersrand Basin goldfields in South Africa (the Burnstone Property). The Burnstone Property is located approximately 80 kilometers southeast of Johannesburg, near the town of Balfour in the Mpumalanga Province of South Africa. In addition to its two primary projects, it holds interests in early stage mineral prospects known as the Tsetsera Property in Mozambique and properties in Tanzania. The Hollister Property consists of a total of 950 unpatented, federal mining claims, covering over 69 square kilometers. During the year ended December 31, 2011, the Company disposed of its interest in Kurils Resources.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.