Great Basin Gold announces new $50 mln bought deal agreement, prior deal terminated

Great Basin Gold (TSE:GBG)(AMEX:GBG)(JSE:GBG) said Thursday that it has agreed to terminate its previously announced public offering, and has entered into a new agreement.
Under the new deal, a syndicate of underwriters led by RBC Capital Markets has now agreed, on a bought deal basis, to buy 66.7 million units at a price of 75 cents each, for gross proceeds of around $50 million.
Each unit will consist of one common share of Great Basin Gold and one half of a purchase warrant. Each warrant will be exercisable for a period of two years following the closing of the offering at an exercise price 90 cents.
The previous agreement announced last week, which is now terminated, was for 61 million Great Basin common shares at a price of 82 cents each.
The company has also granted the underwriters an over-allotment option to purchase additional units of up to 15 percent of the offering, for a period of 30 days following the closing.
The new funds will be used towards working capital for the development and ramp up of the Burnstone Mine in South Africa.
Closing of the financing is expected around March 30, 2012, subject to necessary approvals.
Last week, the company gave an operation update on its Burnstone Mine. It said "significant progress" had been made on the ramp-up in drilling since the end of December last year, with the water issues resolved and reef development rates achieving planned levels of 40 metres per month.
Burnstone is the first greenfield operation to come online in South Africa's Witwatersrand Basin in 30 years.
Great Basin Gold said that square metres available for stoping at the South African mine were up 71 percent to 12,356 square metres, with an additional 6,000 square metres partially developed.
Underground productivity has been improving through de-bottlenecking and infrastructure development, and Burnstone is expected to be cash flow positive - after capital investment - by early in the third-quarter of 2012.
Burnstone's production targets for the coming year are 90,000 to 100,000 ounces gold at a cash cost of $900 to $1,000 per ounce, Great Basin Gold said.