Great Basin boosts Ivanhoe (February 18, 2002)

Vancouver — The jump in the price of the yellow metal has prompted Great Basin Gold (GBG-V) to increase the net present value forecast for the Ivanhoe property in Nevada’s Carlin trend.

Based on the current metal price of US$300 per oz. gold and US$4.40 per oz. silver, the value of the project is now estimated at $203 million. Using a discount rate of 6%, the value drops to $157 million.

Based on an inferred mineral resource of 719,000 tons grading 1.29 oz. gold and 7 oz. silver per ton, the Hunter-Dickinson-led junior envisions a 5-year underground mine producing 600 tons per day, with ore sent to a local mill. Accordingly, annual production would be 170,000 oz. gold and 920,00 oz. silver.

Cash costs are pegged at US$114 per oz. gold-equivalent, with total costs slated at US$134 per oz. gold-equivalent. The economic model uses 50% mining dilution and carbon-in-leach processing with recoveries of 95% for gold and 90% for silver. Underground mining costs are estimated at US$55.50 per ton, with toll-milling charges in the range of US$25 per ton. Capital costs for the proposed mine are about US$22 million.

The Ivanhoe property is between Franco-Nevada Mining’s Ken Snyder mine and Barrick Gold’s Goldstrike operation.

In recent years, Great Basin has focused on high-grade, gold-silver veins below and adjacent to the low-grade, disseminated Hollister deposit, which was previously mined as an open pit.