Great Basin Gold ups Burnstone gold count by 41% (March 03, 2008)

VANCOUVER–An ongoing exploration program at Great Basin Gold’s (GBG-T, GBN-X) Burnstone project in South Africa has increased the site’s gold resource by 41%.

A new resource model and estimate incorporated information from 15 new drill holes. Although the pre-diluted average grade decreased by 16% to 6.9 grams gold per tonne, total contained gold in the measured and indicated categories rose by 41% to roughly 11 million oz.

More specifically, the Burnstone deposit now hosts measured and indicated resources of 48.9 million tonnes grading 6.9 grams gold for 10.86 million contained ounces. Inferred resources add another 17 million tonnes grading 4.37 grams gold.

Great Basin completed an optimized feasibility study for Burnstone in July 2007 and is currently advancing the first of a two-stage development program. A decline is being built, with almost 1.5 km complete to date, and bulk sampling is under way. The company expects to start trial mining in the second half of this year.

The current mine plan incorporates only Areas 1 and 2; drilling is focused on expanding and upgrading those targets. Area 4, which is adjacent to Area 1, is also producing good results and Great Basin expects it could add gold ounces to the resource.

The Burnstone goldfield is part of an 18-km-long, northwesterly trending mineralized corridor within the Kimberley Reef, some 80 km southeast of Johannesburg. At Burnstone, the central portion of the gold corridor has been uplifted by two northwesterly trending sub-parallel faults and, as a result, mineralization is found at relatively shallow depths (between 250 and 750 metres below surface).

The optimized feasibility study, based on the previous resource estimate, predicted average annual production of 254,000 oz. gold per year at a cash cost of US$283 per oz. The project’s net present value, at a 5% discount rate, was pegged at US$322 million and the internal rate of return calculated at 24%. Development capital cost was estimated at US$131 million.

Great Basin picked up Burnstone through its acquisition of Southgold Exploration in late 2002.

Great Basin moved up 21 on the news to close at $3.24. The company has a 52-week range of $1.98-3.48 and has 203.4 million shares issued.