Great Basin Gold posts 27% hike in Q1 revenue

Gold producer Great Basin Gold (TSE:GBG)(AMEX:GBG) Tuesday posted a 27% increase in revenue to $33 million for the quarter that ended March 31, compared with the same quarter a year earlier.
The company cited a 7 percent improvement in ounces sold, as well as an 18 percent increase in the realized gold price.
"Good progress has been made at both Hollister and Burnstone during the first quarter of 2012," Great Basin president and CEO Ferdi Dippenaar said.
"The focus has been to improve mining flexibility through the increase in ore development and the establishment of additional stopes, thereby enabling the company to meet its annual production targets."
Recovered gold equivalent ounces in the period were 23 percent lower due to focus on mining flexibility at its Hollister mine in Nevada. Recovered ounces were 22,921 ounces compared to 29,593 ounces a year earlier.
The company's Burnstone operations in South Africa produced 6,671 ounces of gold for the quarter, which was higher than the forecast of 6,327 ounces, compared with 5,511 ounces of gold in a year ago.
Volumes were generally in line with the production plan, with a slightly higher stoping gold grade compensating for minor volume variances, with cash costs per ounce for the quarter of $2,181, down from $2,471 per ounce in the first quarter of 2011.
At Hollister in Nevada, 16,240 gold equivalent ounces were produced for the quarter, at a $850 per ounce cash cost - lower than the forecast of 19,749 gold equivalent ounces - and compared with 24,082 ounces of gold in the same period in 2011.
The company said the lower production was due to ineffective carbon stripping, while the final upgrade to the acid wash and carbon regeneration circuit was being completed, resulting in lower than planned gold and silver recoveries at the Esmeralda mill during the quarter.
Great Basin added that a $2 million increase in net interest paid was due to interest for January 2011 being included in the Burnstone project development costs. In addition, a $2.6 million impairment charge on the loan advanced to Black Economic Empowerment partner Tranter Burnstone was recorded as a result of the decline in the company's share price.
On a conference call, Great Basin's Dippennaar said for the quarter, the improved performance at Burnstone was "negatively
impacted" by short term operational underperformance at the Esmeralda Mill.

"We can look forward to more consistency in our perfrmance," Dippenaar told analysts and shareholders on the call.
As at March 31, the company had $15 million in cash.
The company reported a loss from operations of $7.7 million, as an increase in cash and non-cash costs had a negative impact, after a $0.4 million loss a year earlier.
Looking ahead, Great Basin said its focus at Burnstone remains on resolving all temporary underground and shaft infrastructure problems, which will allow for the planned production ramp up.
It will also focus on a return of consistency in operational performance at both Hollister and Esmeralda following completion of acid wash and carbon regeneration circuit, and continue trial mining and exploration on the Upper Zone as well as associated opportunities at the Hollister Property. It will also consider joint venture opportunities for its Tanzanian assets.
In terms of advancing Hollister, a Draft Environmental Impact Statement is expected to be published in May 2012 at which time the public participation process will commence.
A favorable Record of Decision is expected in the third quarter, the company said, which will mark the completion of the Environmental Impact Statement and allow the Hollister project to enter into commercial production.
For the remainder of 2012, the company plans to continue its trial mining (ore removal and test-processing) activities at Hollister within the allowable ore tonnage authorizations of its existing permits, with all extracted material to be processed at the Esmeralda mill.
The company is continuing with underground infill drilling at the U.S. project, with a view to bringing the current inferred mineral resources into the indicated or measured categories, as well as with step-out drilling to further explore the potential for western, eastern and Upper Zone extensions to the mineralized vein systems.
At Burnstone, ore development remains the key to delivering the planned production build-up for the remainder of 2012.
Burnstone remains on target to meets its planned production of 90,000 to 100,000 ounces of gold for 2012, the company said. Although cash costs came in higher than planned during the first quarter, the target of US$900 to US$1,000 per ounce of gold for the fiscal year remains achievable, Great Basin said, due to the planned increase in production the second half of the year.
In March, the company raised $54 million to be used as working capital for the development and production ramp up at Burnstone.
Great Basin is a mineral exploration and development company that is currently focused on delivering two advanced stage projects: the Hollister project on the Carlin Trend in Nevada and the Burnstone project in the Witwatersrand Goldfields in South Africa.