Great Basin boosts Ivanhoe (February 11, 2002)

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

The latest economic assessment, using the current metal prices of US$300 per oz gold and US$4.40 per oz silver, puts the value of the project 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 five year underground operation mining 600 tons per day and treating the ore at a local mill. This scenario would produce 170,000 oz of gold and 920,00 oz of silver annually. Cash costs are estimated to come in at US$114 per oz of 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 of ore and toll-mining charges are put at US$25 per ton. Capital costs for the proposed mine are pegged at US$22 million.

The Ivanhoe property lies midway between two major operations: Franco-Nevada Mining’s Ken Snyder and Barrick Gold’s vast Goldstrike property. Over the past couple of 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.

The resource comprises seven veins hosted by Ordovician Valmy Formation rocks thrusted over younger carbonate rocks.