[miningmx.com] – GREAT Basin Gold (Great Basin) said its South African
mine, Burnstone, would turn cash flow positive after capital investment in the third
quarter of the 2012 calendar year if it achieved planned production levels.
Ferdi Dippenaar, CEO of Great Basin, said Burnstone expected to produce between
90,000 to 100,000 oz in 2012 at a cash cost of between $900 and $1,000/oz, a
“marked” improvement on the $1,737/oz cash cost average of 2011.
“The company expects that achieving the planned production build-up will allow
Burnstone to turn cash flow positive after capital investment (using a gold price of
$1,650/oz and a US$/ZAR exchange rate of 7.5) during Q3 2012,” Dippenaar said. He
was commenting in a operational and exploration update to shareholders.
“All equipment required for the production build up is in place. All of our mining teams
are currently in place and are undergoing intensive refresher team training to enable
them to plan, assess and adjust to the constantly increasing rate of production,” he
said.
The mine would continue the high ratio of development to stoping ore in 2012 in order
to provide Burnstone with continued mining flexibility.
The improvement in production for 2012 includes an upgrade and completion of
underground and shaft infrastructure at the mine. Burnstone suffered the effects of
underground flooding in December 2011.
“Underground flooding experienced in the latter part of 2011 and early 2012 had an
impact on the advancement of development,” Dippenaar said. “This issue has been
resolved following the upgrading of the temporary water handling system.”
Dippenaar said that the improved production levels at Burnstone would lay a
foundation for “optimal production rates of 220.000 to 250,000 oz of gold a year.
Including the company’s Hollister mine development, which is based in Nevada in the
US, Great Basin was on track to achieve 320,000 oz to 350,000 oz of gold equivalent a
year.
