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View Full Version : Great Basin Gold - multi million oz, low cost, high grade mines...



LibertySole
12-14-2010, 02:59 AM
http://greatbasingold.com/index.html?lf=1;pg=1
http://greatbasingold.com/gup/filez/GBG-fact-sheet-Oct2010.pdf

This stock looks like a screaming buy. Idk how it is this cheap with projects like Burnstone that have 12.1 million ounces in resources.

GuyinSA
12-14-2010, 09:45 AM
I think people are scared of the political risk in South Africa. Some loud political aspirants have been making noises about nationalization of mines there. The people in charge do seem to be opposed to it, but the country has had a few incidents of large-scale corruption with regards to politically connected groups obtaining mining licenses in preference to established companies that have done all the hard exploration work. They are trying to clean it up, and I don't think GBG is affected by this, but I think this is where the discount in valuation of GBG comes in; the political risk factor in SA.

Take a look at Anglogold Ashanti and compare it to the other majors. It's South African assets are valued very very cheaply. Same reason.

Numisgold
12-14-2010, 11:03 AM
GBG just turned in a lousy quarterly report. They should do better once their Burnstone mine comes into the picture next year. The govt of SA also instituted a new law in 2004 that requires all SA mines to have a min. of 26% black South African ownership by 2014. There are also other provisions that require a certain % of black management, labor, etc. This was instituted to try and compensate the citizens for apartheid abuses. SA mines have also had big issues with getting enough electricity and water to all their mines. The infrastructure there is on the shaky side with many mines digging several miles deep today. Besides the nationalization issue already mentioned, there is lots to think about with SA miners.

In any case the GBG chart does seem to indicate a breakout from a sym. triangle is brewing. GBG carries about a 50% debt to equity ratio which is extremely high for even a senior miner, let alone a junior. But no doubt spending up for Burnstone has cost plenty.

http://manganeseinvestingnews.com/897/south-africa-pushes-for-black-ownership-of-mining-operations/

Numisgold

GuyinSA
12-14-2010, 03:33 PM
This guy takes a look at the bonanza grades recently found by GBG at Hollister:

http://goombarhsedge.blogspot.com/2010/11/great-basin-golds-gbg-bonanza-grades.html

It seems there is no indication what the tonnage could be, but this guy seems to think it could be significant.

"Channel sampling carried out in conjunction with trial mining in the Blanket Zone has encountered the bonanza grades over a strike distance of 170 feet (57 meters).Channel samples taken every 10 feet (3 meters) gave values ranging from a low of 1.5 oz/ton(52.0g/t) Au and 3.2 oz/ton(111.9 g/t) Ag to a high of 2,560.4 oz/ton (88,845.9 g/t) Au and 1,829.8 oz/ton (63,494.1 g/t) Ag over channel widths from 0.3 to 2 feet wide."

"The fully diluted value of the muck samples taken from the stope to date averages 22.3 oz/t (773.8 g/t) Au and 23.4 oz/ton (811.9 g/t) Ag."

I would imagine a high debt-equity ratio is a plus in a miner that is just about to start generating strong cash flow. Extra leveraged returns to a rising gold price?

Venturer
12-14-2010, 08:24 PM
Right now the share price appears to be capped by the warrants that were recently exercised. They can double their money, so they are taking profits.
Also, they have many additional warrants out and a lot of float, most Junior Miner investor's do not like that.

Numisgold is correct about Burnstone and political risk, although GBG has a BEE partner in place, SA is not stable. Burnstone is low grade for an UG mine but the flat thick reefs make it simple to mine. At $1400 Gold they are mining (+-)$250 per ton rock and they can make nice profit with that.

Hollister is the only reason I own GBG (Burnstone is icing on the cake). The exploration potential is serious, as witnessed by their recent accidental discovery above the Clementine 18. It will take years for their Geos to fully understand it, but it looks like they are on to a very rich low sulfidation epithermal system. Similar deposits around the world can contain 10's of millions of ounces.

GBG will require patience. They will not have funds to aggressively explore for a couple of years. In the meantime, they're pouring Gold and Silver, and that's always a good thing.

Joe Bob
12-14-2010, 09:37 PM
Got in at 1.65 & again at 2.74 near term upside at around 3.25 max so I hear.They be putting out metal. Thanks all for the additional info.

argentine
12-27-2010, 11:53 PM
Right now the share price appears to be capped by the warrants that were recently exercised. They can double their money, so they are taking profits.
Also, they have many additional warrants out and a lot of float, most Junior Miner investor's do not like that.

Numisgold is correct about Burnstone and political risk, although GBG has a BEE partner in place, SA is not stable. Burnstone is low grade for an UG mine but the flat thick reefs make it simple to mine. At $1400 Gold they are mining (+-)$250 per ton rock and they can make nice profit with that.

Hollister is the only reason I own GBG (Burnstone is icing on the cake). The exploration potential is serious, as witnessed by their recent accidental discovery above the Clementine 18. It will take years for their Geos to fully understand it, but it looks like they are on to a very rich low sulfidation epithermal system. Similar deposits around the world can contain 10's of millions of ounces.

GBG will require patience. They will not have funds to aggressively explore for a couple of years. In the meantime, they're pouring Gold and Silver, and that's always a good thing.

Venturer,

Thanks for the info....
In your opinion, will they still have a shot at being acquired by a major in 2011 - 12?

Is this stock still a buy at $2.90 +/- with a two year time horizon?
The warrants make me think twice about adding to my position. I followed the GBG rainbow since you recommened it in the low 1's and I now see the really big pot of gold....I am wondering if the Leprechaun will run away with it before we can get any! :D

Has the the Stock topped out here or just coiling for a breakout run. (As Numisgold indicated in prior post)

Thanks for any input you can offer,

Argentine

Venturer
12-28-2010, 07:37 PM
Venturer,

Thanks for the info....
In your opinion, will they still have a shot at being acquired by a major in 2011 - 12?

Is this stock still a buy at $2.90 +/- with a two year time horizon?
The warrants make me think twice about adding to my position. I followed the GBG rainbow since you recommend it in the low 1's and I now see the really big pot of gold....I am wondering if the Leprechaun will run away with it before we can get any! :D

Has the the Stock topped out here or just coiling for a breakout run. (As Numisgold indicated in prior post)

Thanks for any input you can offer,

Argentine

Argentine,
GBG will report ounces poured from Hollister and Burnstone sometime in the next couple months. They will (barring unannounced charges) become cash flow positive for the first time. Also, there should be some clarification regarding the bonanza grade area, accidentally encountered above the Clementine 18. My understanding is, they are currently drilling it from UG and will release assays when they become available. They have no idea of the size and scope of that mineralization and it could be game changer. It's certainly hot in the area they sampled.
As for a take-over, the more Gold they find at Hollister the more likely they will be taken out. As mentioned previously, NEM's Midas Mine is running out of Ore.
I believe GBG has more short term (1-2 years) potential than anything else in my portfolio. But, as Numisgold rightly pointed out, there is risk.

argentine
01-04-2011, 03:40 PM
Argentine,
GBG will report ounces poured from Hollister and Burnstone sometime in the next couple months. They will (barring unannounced charges) become cash flow positive for the first time. Also, there should be some clarification regarding the bonanza grade area, accidentally encountered above the Clementine 18. My understanding is, they are currently drilling it from UG and will release assays when they become available. They have no idea of the size and scope of that mineralization and it could be game changer. It's certainly hot in the area they sampled.
As for a take-over, the more Gold they find at Hollister the more likely they will be taken out. As mentioned previously, NEM's Midas Mine is running out of Ore.
I believe GBG has more short term (1-2 years) potential than anything else in my portfolio. But, as Numisgold rightly pointed out, there is risk.

Hello Venturer,

Thank you once again for sharing your opinion and experience. Your posts are always a pleasure to read and very informative. As are Numisgold's.

I added some shares today. FWIW from a novice mining stocks investor, I think GBG is worth the risk. As Numisgold mentioned the last quarter was not a great one. Nevertheless, I do not believe that last quarter results were detrimental fundamentally to the company. Perhaps the time line for share appreciation just got bumped into the future. I think management might have learned a lesson regarding the release of information. Today seemed like more of an accumulation day in the stock than outright selling.

All the best to you in 2011,
Argentine

SilverIllusion
01-04-2011, 07:42 PM
I was in GBG in October-November. I sold because the stock was not moving like the rest. I belive they will have to post really good numbers to get the stock moving. Maybe March-April time frame? They seem to be a pretty solid company.

Venturer
01-19-2011, 11:05 AM
From the link below:
"At the Hollister Project, initial trial mining in the newly discovered Blanket Zone yielded 500 tons at a grade of 15 Au eqv oz/ton (510 g/t), containing an estimated 7,500 Au eqv oz."

Let's see here, 7,500 oz at $1375 is $10,312,500. So the first little 500 ton block they mined out of the accidentally discovered zone above the Clementine 18 was worth $20,625 per ton. That should help the cash cost.


http://finance.yahoo.com/news/Great-Basin-Provides-Q4-2010-prnews-2936283611.html?x=0&.v=6

Venturer
02-02-2011, 10:44 AM
From the link below:
•Hollister updated Mineral Reserve and 2011E production guidance of approximately 110,000 recovered gold equivalent ounces (Au(eqv) oz)
•Hollister forecast Life of Mine (“LOM”) average production of 110,000 Au(eqv) oz over 8 years at steady state with a cash cost, inclusive of royalties of approximately US$527 per Au(eqv) oz recovered over the LOM.
•Burnstone updated Mineral Reserve increased by 55% and 2011E production guidance of 110,000 to 140,000 recovered gold oz (Au oz)
•Burnstone forecast LOM average production of 254,000 Au oz over 25 years at steady state with a cash cost, inclusive of royalties, of US$450 per Au oz recovered over the LOM
•Final credit approval for Term Loan financing of US$60 million of which US$52 million will be used to retire senior secured notes


http://www.greatbasingold.com/index.html?lf=1;pg=25;ai=1815;pcat=2011

Gold Bouillon
05-25-2011, 02:53 PM
Any hope for GBG?

They've been mercilessly punished due changing their board and missing earnings.

But they should at least be valued at $4 and perhaps even $9. So, with all the beatdowns, are they dragging bottom or do they have further to fall?

Gwyde
05-27-2011, 11:57 AM
GBG has been getting buy recommendations at $2.90 and at least one a sell recommendation at $1.90 (see http://www.thestreet.com/story/11130556/1/great-basin-gold-ltd-stock-downgraded-gbg.html - May 24)

Analysts are not around to help you make money. Many of them are plain trend followers and the more noise they make, the closer to a reversal.

Gold Bouillon
05-28-2011, 01:50 AM
I'm glad I followed my instinct on Thursday and bought in. Up +10% today! Woo Hoo!

I think they have another 20 - 30% possible. I Just can't tell if they are going to get there in a timely fashion or not.