Vancouver, Canada — MININGREVIEW.COM — 10 April 2008 – Great Basin Gold Limited (GBG) – an emerging mid-tier gold producer listed on the Toronto and American stock exchanges – has acquired the remaining 63% of the fully diluted equity shares of Vancouver-based Rusaf Gold Limited (Rusaf), which owns and operates properties in East Africa.
A media release issue here says the agreement – entered into on 14 February2008 and allowing GBG to acquire the remaining 63% for a total consideration of US$14.4 million R115 million), payable with approximately 4.9 million of the company’s common shares – has been successfully closed. The exchange ratio for the acquisition was one GBG share for every 4.5 Rusaf shares.
The acquisition terms also provide for additional GBG shares to be issued in the first three years from closing, contingent upon gold discoveries above a threshold of 500 000 oz on certain mineral prospects formerly held by Rusaf. In the event of such discoveries, GBG will issue shares valued at the higher of the current or then-prevailing market price to the former Rusaf shareholders, on the basis of valuing these gold ounces at US$15/oz for inferred resources and US$40/oz for measured and indicated resources (subject to a minimum average cut-off grade of 1.5 g/t or 0.04 oz/t). The company has also agreed to spend a minimum of US$7 million (R56 million), and up to a maximum of US$19 million (R150 million), to explore the newly acquired properties during this period, depending on independent advice as to the likelihood of exploration success.
GBG president and CEO Ferdi Dippenaar commented: “We are pleased to have completed the regulatory process, and are busy integrating these assets within our pipeline of exploration projects. We have retained Rusaf’s operational management and incentivised the teams to accelerate the exploration programmes underway,” he added.
“Rusaf has approximately US$8 million (R60 million)) in its treasury, which will fund the short and medium-term exploration programmes,” Dippenaar concluded. “Drilling is currently underway on a number of these properties with results expected in the second half of 2008.”