HomeGoldGBG purchases US plant and mine

GBG purchases US plant and mine

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Vancouver, Canada — MININGREVIEW.COM — 09 December 2008 – Great Basin Gold Limited (GBG) – an emerging mid-tier gold producer listed on the Toronto and American stock exchanges – has signed an agreement with Metallic Ventures Gold Incorporated (MVG) to purchase the Esmeralda processing plant in Nevada, inclusive of the Esmeralda mine and infrastructure, for US$2 million (R20.5 million).

In a statement issued here, the company said its decision to purchase the Esmeralda Mill had followed an extensive evaluation process whereby various milling options for its Hollister project were considered. Esmeralda is approximately 290 miles from the Hollister project with 80% of that distance over paved interstate roads. Transport costs from Hollister are estimated at US$55 per tonne.

The Esmeralda Mill was operational until 2004 when it was placed on care and maintenance. The Mill processes ore through a carbon-in-leach (CIL) process with tailing deposition into an adjacent impoundment. Other features of the mine include crushing facilities, stockpile areas, waste rock facilities, roads and other miscellaneous areas. MVG holds the required permits that allow for the operation of the mining, milling and associated crushing activities.

The statement added that the mill could currently process up to 350 tonnes per day. Re-commissioning and re-configuring of the mill was expected to take at least 120 days. Further upgrades to improve the recovery of gold and expand the capacity of the mill would be evaluated and implemented during this phase at an estimated cost of approximately US$8 million (R82.5 million). Operating costs of the mill were estimated to be US$40 per tonne.

GBG has undertaken an initial assessment of previous mining activities on the property, including the quantum and quality of available drilling, geological and mining-related data. The Esmeralda property has mineral resources, and these resources will be the subject of a detailed review and estimate. Preliminary observations and analysis of data from the underground workings suggest that a high grade epithermal vein-type target, not dissimilar to Hollister, is present.

President and CEO Ferdi Dippenaar said: “After careful consideration and independent assessment of the Esmeralda mill and mine, we are sure that this acquisition represents a strategic advantage for Hollister, and will provide the company with control over our processing capacity as well as reduced cash costs.”