Great Basin tallies Burnstone’s Area 1

Having sunk more than 20,000 metres of infill drilling on the Burnstone gold project in South Africa, Great Basin Gold (GBG-V) has boosted mineral resources in the Area 1 deposit.

Based on a cutoff grade of 0 gram-cm per tonne, measured resources are pegged at 8.4 million tonnes running 13.7 grams gold per tonne, for 3.7 million contained ounces of gold. Another 4.8 million tonnes averaging 15.5 grams gold, for 2.4 million contained ounces are classified as indicated.

When the cutoff grade is boosted to 350 gram-cm per tonne, measured resources slip to 4.7 million tonnes grading 18.5 grams gold, for 2.8 million contained ounces. Indicated resources come in at 2.8 million tonnes of 20.8 grams, for 1.9 million contained ounces.

Completed by Behre Dolbear & Co., the updated resource estimate is based on 57 core holes and 208 valid deflections.

A 2002 scoping study envisages as an underground operation running on Area 1 at a rate of 2,500-tonne-per-day to crank out 130,000 oz. gold annually over a life span of 24 years. Initial capital costs were pegged at US$50.6 million; cash costs were put at about US$175 per oz.

Great Basin plans to sink 10 more holes on Area 1, with an eye toward converting more resources to the measured category. The drilling will be done in conjunction an ongoing 10.000-metre drill program on Area 2, about 16 km to the southeast.

Inferred resources at Area 2 stand at 24.3 million tonnes running 14.7 grams gold. The estimate is based on nine drill holes.

The 400-sq.-km Burnstone property is also home to several other untested high priority targets.

Gold mineralization at Burnstone is hosted by the Kimberley reef, a 30-to-100-cm-wide conglomerate (averaging 40 cm at Burnstone) that has surrendered more than 120 million ounces of gold to other mines on the Witwatersrand basin. All told, the basin has yielded some 1.4 billion oz. gold.

Engineering studies and cost estimates for underground development of Area 1 have begun in anticipation of a feasibility study later this year. The work will also look at increasing the proposed throughput rate.

Great Basin can acquire an 80% stake in Burnstone by acquiring privately held, South African-based Southgold, which holds the right to acquire the property subject to a 20-26% sale to Tanter Investments, a South African black empowerment group.

Following an initial payment in early May, Great Basin still needs to issue Southgold another 11 million shares and 5.5 million like-priced warrants by the end of January 2004 to wrap up the deal.