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Great Basin Gold files for protection

 
Johannesburg, South Africa — 19 September 2012 – Troubled international gold mining company Great Basin Gold Limited (GBG) has revealed that its principal South African subsidiary, Southgold Exploration (Pty) Limited “’ owner of the Burnstone mine in South Africa “’ has filed for protection under the South African business rescue procedures.

A statement issued here added that Great Basin Gold itself expected to seek creditor protection this week. The insolvency filings were intended to allow Southgold and the GBG a period of time to seek buyers and partners for the latter’s two gold mining projects and/or corporate level financiers in an effort to return to solvency.

The BR proceeding constitutes a default under the company’s unsecured convertible debentures which have a principal amount of US$126 million. Trading in Great Basin Gold’s shares and debentures will remain suspended and the NYSE MKT, TSX and JSE are expected to initiate delisting procedures for these securities.

Great Basin Gold is currently endeavouring to negotiate a debtor-in-possession working capital loan with certain lenders which, if successfully concluded and if approved by any necessary court approvals, would provide the company with liquidity to pursue an orderly shutdown of Burnstone while it sought a restructuring and/or sale of its assets. As of the time of this news release there could be no certainty the negotiations will succeed.

Interim CEO Lou van Vuuren commented: “Assuming our DIP loan negotiations are successful, those funds will be used firstly to ensure the orderly suspension of operations at Burnstone, and to provide some additional funds for Hollister."

Source: Great Basin Gold. For more information, click here.

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