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Thu 29 Jul 2010
Close: 1 305c 
Day's move: -9c (-0.68%)
Volume: 3 200
Trades: 4
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Great basin announce Burnstone project update
Great Basin Gold Ltd announced progress in the delivery of the capital projects at its Burnstone mine development project in South Africa. Eskom, the state energy provider, has informed the company that final arrangements have been made to tie the Burnstone project in to the national electricity grid on August 8, 2010, which is a delay of approximately 2 weeks with a resultant delay in plant start up. The establishment of bulk electrical power infrastructure to the Burnstone mine by Eskom is well advanced. The main distribution substation at Burnstone site is complete and the receiving infrastructure being part of the Eskom line project is ready to receive electrical power.
To date, the metallurgical plant construction project has made rapid progress against an aggressive 15 month delivery time line. The project thus far has seen intensive civil construction activities on-site and a multitude of simultaneous assembly and refurbishment activities off site. The heavy civil construction has largely been completed, construction of various buildings is far advanced, and the off-site assembled components are being delivered and installed. Over the past month, the ball and semi autogenous grinding mill shells and heads have been mounted in position, the mill motors have been installed and general alignment and installation procedures completed. Currently the lubrication systems and mill liners are being installed. The silo is in its final stage of completion with the roof steel installed and the final associated civil construction being finalised. Installation of steel feeder systems at the silo bottom is in progress. The main feed conveyor gantries have also been assembled and are being installed.
The thickener installation is complete and a final layer of paint is being applied. The installation of the flocculent plant and the construction of process tanks for start-up have also been completed. All sub-station and central buildings are complete and electrical and instrumentation installation is in progress. Piping and cable racking construction is far advanced and installation of pipes, cables, pumps and associated components are in progress. The cable trenching and installation from the main Eskom sub-station is complete and ready to receive power. The tailings facility project is progressing well, with phase 1 having been completed and ready to receive tailings from the plant. A water storage and supply dam has been activated with surplus underground water being pumped into and stored in it. Upon commissioning, the raw water storage and thickener tanks in the metallurgical plant will be filled as well.
Another highlight in the past two months was completion of the sinking phase of the Burnstone vertical shaft to its final depth of 1 598 feet (487 meters) on May 4, 2010. In addition, the initial development on 40 level and 41 level stations were completed. A conveyor system required for ore handling has been installed on 41 level. Equipping of the shaft continues and is expected to be completed in August 2010. The winder house construction has been completed; both winders were dry commissioned at the end of last week, and ahead of schedule. The holing of the 5.1 meter diameter, 305 meter deep vertical ventilation shaft took place on May 12, 2010 and will act as an up-cast shaft to provide sufficient ventilation for mining of blocks B and C. The lining of the first 90 meter of the shaft with shotcrete as well as connection of three 720 kiloWatt surface fans is in progress. The shaft will provide adequate ventilation for the underground workings well into the future.
Good progress also continues to be made in the development of underground infrastructure at Burnstone. A significant milestone was achieved on June 24 with the holing of the decline with the vertical shaft. A total of 8 822 feet (2 692 meter) of on-reef development was completed by the end of June 2010. The long hole stoping trials are progressing well and the rate of mining is expected to increase as more mining areas become available. The focus is on establishing more stopes in block B while activities in the higher grade block C continue to be focused on reef development. Block C middle level was accessed during the previous quarter with block C upper scheduled to be accessed in July 2010. The additional access points in block C will allow for an increase in opening up of new mining areas. A total of approximately 126 000 tons have been accumulated on the ore stockpiles which will be used for mill commissioning.
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Great basin corporate update
Great Basin Gold Ltd announced additional positive exploration results from its Hollister property in Nevada as well as the completion of a corporate acquisition, a disposition and the settlement of a dispute. Significant progress has been made in 2010 with the geological and structural modelling of the Hollister epithermal vein systems. The added experience and close coordination of the geology and mining team is leading to marked refinements in modelling and evaluation of the deposit, resulting in improved trial mining efficiencies. A detailed underground geological mapping program over the last four months has provided significant new insights into the control structures of the epithermal veins. A series of N50E trending faults have been mapped which control the formation and geometry of the Hollister vein systems. These structures have been exposed both through underground development and trial mining activities and, effectively, break the deposit into at least seven distinct domains.
Implications for exploration and development targeting
The impact of the underground structural mapping on how the company can target its drilling programs is significant. Work to date has shown that:
- The N50E structures have a direct control on the geometry and extent of the individual veins. Furthermore, this structural control has considerably tightened up the prediction of where the veins fault, taper, and migrate.
- Seven areas have been identified where opportunities exist to find new mineralization close to current infrastructure, slab the walls of trial mining stopes to expose parallel veining, and extension targets controlled by the N50E faults.
- The current underground targets (Gloria vein system to the northwest, Velvet vein system to the north, and Pit Feeder vein system to the southwest) are still potential targets; however, the N50E faults now explain the geometry of "step-outs" to the northwest (eg Gloria), and also the Gwenivere vein to the southeast. Underground development in these areas would assist in optimising the location of drill set ups to advance the evaluation of the veins.
- A swarm of mostly narrow veins, as indicated by intersections to date, has been modelled to the north and subparallel to the Clementine vein system. A phased program of drilling is required to fully assess the extent and grade of these veins.
- The Velvet vein target, located approximately 3 000 feet to the north of the Gwenivere and Clementine vein systems, is increasingly appearing to be a separate, "Clementine-like" vein system. This is further evidenced by the coincidence of disseminated Blanket-style mineralization in the Tertiary volcanic strata at Velvet coincident with surficial mercury occurrences and coupled with extensive chalcedonic/opaline quartz development - surface evidence of past hydrothermal activity on the Velvet-Butte trend.
The enhanced geological work is having a significant impact on the confidence in the 24-month mine plan, by not only providing a more accurate vein model to plan from, but also demonstrating the location of additional mineralization that is extractable from existing mine development infrastructure. The updated vein model is also indicating where development and/or trial stoping has moved off- vein. The knowledge gained from mapping the N50E faults is also expected to positively affect stope delineation borehole planning, and prediction of vein development and grade trends.
Corporate developments
Great Basin Gold has settled its previously disclosed dispute with Queenstake by execution of an ore-processing contract for 5000 tons of high grade and a like amount of lower grade ore on the basis that the parties will split the metal proceeds and milling costs of USD88 per ton. As well, Queenstake's share is reduced if metal recoveries are off by more than 10% from the targeted recoveries of 88% Au and 82% Ag. The settlement eliminates all rights of first refusal and allows Great Basin Gold to immediately process ore stockpiles and production in excess of the capacity of its Esmeralda mill through Newmont's nearby Midas mill. Great Basin Gold also issued 7.5 million shares with an agreed value of USD2 each to acquire all the minority preferred shares in its Rusaf Gold subsidiary, thus eliminating any further discovery-contingent common share issuance requirements as well as eliminating the mandatory exploration expenditure timetable. It now owns all the Tanzanian and other Rusaf prospects outright without further obligations. The company also advises that it has disposed of its shareholding in Kryso Resources plc for a total consideration of USD3.4 million. The restructuring of its Rusaf holdings and the sale of Kryso shares are part of the company's efforts to clean up its balance sheet.
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Great Basin - update on Burnstone mine project
Great Basin Gold Ltd. ("Great Basin" or the "Company") (TSX: GBG; NYSE Amex: GBG; JSE: GBG) announces that it is making good progress in the delivery of its capital projects at its Burnstone Project in South Africa. To date, the metallurgical plant construction project has made rapid progress against an aggressive 15 month delivery time line. The project thus far has seen intensive civil construction activities on-site and a multitude of simultaneous assembly and refurbishment activities off site. The project is now entering the stage where the heavy civil construction has largely been completed, construction of various buildings is far advanced, and the off-site assembled components are being delivered and installed.
Over the past month, the ball and semi autogenous grinding mill shells and heads have been mounted in position, the pour of the 2 meter thick slab floor for the silo has been completed, the cable racks and piping has started on the main pipe racks, the cable trenching from the Eskom sub-station has been completed and is ready to receive power, the construction of the Carbon-in-Leach tanks and thickener has progressed to an advanced state. The tailings facility project is progressing well, and will be ready to coincide with commissioning of the plant. Progress at the vertical shaft project is aimed at completing shaft bottom arrangements, in order to continue with shaft equipping and commissioning. The winder house construction has been completed and both winders are in an advanced stage of installation, ahead of schedule.
The establishment of bulk electrical power to the Burnstone Mine is ongoing and construction of the power line is progressing according to plan. Eskom remains committed to supply the Burnstone Mine with bulk electrical power as per the agreed schedule and according to the power demand build-up. The main distribution substation at the Burnstone site is almost complete with the last switchgear being installed this week and the receiving infrastructure being due for completion as part of the Eskom line project. The Burnstone Project has achieved a major milestone by effective compliance with the compulsory 10% power savings initiative from Eskom, by the submission of an "Energy Efficiency Certificate", indicating energy efficient designs and components that are acknowledged by Eskom. This arrangement, a first according to Eskom, and aligned with its forward looking energy saving policies, will effectively avoid the punitive rates for not achieving the compulsory 10% savings.
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