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Great Basin attracts takeover interest
David McKay
Posted: Thu, 05 Jul 2007
[miningmx.com] -- GREAT Basin Gold is attracting takeover interest from certain North American suitors. Of particular interest is the firm’s Hollister Block, a prospect in the Carlin Trend, a gold-bearing region in Nevada.
Run by Ferdi Dippenaar, formerly of Harmony Gold, Great Basin is also developing the Burnstone project south-east of Johannesburg. Burnstone has been billed as the first new gold mining development in many-a-year and the world’s ninth largest resource. But it has garnered mixed reviews.
For example, several years ago Great Basin was asked to resubmit geological information on Burnstone by the Canadian authorities owing to certain inconsistencies. The deposit seems to have weathered that wobble and in Dippenaar’s hands has benefited from orderly, focused exploration. Burnstone now consists of 2.4 million oz of proven and probable reserves, with average production
expected to be 210,000 oz/year.
One analyst thinks Great Basin is run like an IT company such is the level of innovation and fresh thinking at its Jo’burg HQ.
All that good news has filtered into the US market, where Great Basin is subject to a due diligence, with other queries on the horizon.
OPPORTUNITIES
* Corporate action – eg, a takeover – could see the company’s share price flourish as investors bet on a good premium.
* The Hollister block is several months away from producing cash flow; while the Burnstone project will produce gold next year.
* A shareholder rights protection plan enables Great Basin to turn any hostile bid into a friendly one, or allow shareholders the benefit of rival offers for the company.
RISKS
* Burnstone turns out to be an over-hyped dog of a deposit, bearing out the reticence of Gencor and Gold Fields/Randex to develop it in the past.
* As typical of most
inward secondary listings, liquidity in Great Basin is extremely low for South African investors.
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