Great Basin Gold Ltd.
TSX : GBG
AMEX : GBN

Great Basin Gold Ltd.

August 14, 2007 09:07 ET

Great Basin Announces Signing of Final Bee Transaction Agreements for Burnstone Gold Project in South Africa

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 14, 2007) - Great Basin Gold Ltd ("Great Basin Gold" or the "Company") (TSX:GBG)(AMEX:GBN)(JSE:GBGOLD) announces that various of the conditions precedent to the proposed transaction as set out in the Transaction Framework Agreement entered into between Great Basin Gold, its wholly-owned subsidiary Southgold Exploration (Proprietary) Limited ("Southgold") and Tranter Gold (Proprietary) Limited ("Tranter") as a broad-based black economic empowerment ("BEE") shareholder in the Company (described in a news release of February 21, 2007) have been fulfilled. This includes the conclusion on August 8, 2007 of the formal Subscription and Acquisition Agreement between Great Basin Gold, Southgold, Tranter Holdings (Proprietary) Limited, and its BEE subsidiary corporation, to be re-named Tranter Burnstone (Proprietary) Limited ("Tranter Burnstone").

Under the Subscription and Acquisition Agreement, Tranter Burnstone, will purchase from treasury, 26% of Southgold, the Great Basin subsidiary which owns the Burnstone Gold Project, and Great Basin will thereupon immediately acquire those Southgold shares for 19,938,650 new common Great Basin Gold shares. Tranter Burnstone will thereby acquire 9.3% of the entire issued share capital of Great Basin Gold on a fully diluted basis. These shares will be restricted from resale for a three year period. The purchase consideration payable by Tranter Burnstone is R260 million (US$36.3 million), which will be settled in cash, as follows:

- R190 million out of an aggregate of R200 million to be received from Investec Bank Limited ("Investec") through the subscription by Investec for preference shares in Tranter Burnstone; and

- R70 million out of an R80 million to be received as a donation from GFI Mining South Africa (Proprietary) Limited ("GFIMSA") in terms of the memorandum of agreement entered into between Gold Fields Limited, GFL Mining Services Limited, GFIMSA, Great Basin Gold, Southgold and Tranter on June 27, 2007.

The balance of R20 million in cash remaining in Tranter will be utilised for the establishment, administration and day-to-day operational costs relating to its objective to become a black-owned, active and operational prospecting, mining and procurement company in the gold mining sector. Tranter has recently appointed Mr. Joshua Ngoma as its Chief Executive Officer and will appoint other staff as required. Great Basin Gold will supply administrative support to Tranter.

An independent valuation was undertaken in February 2007 in relation to the relative value of Great Basin Gold's Burnstone project, located in the Witwatersrand Basin in the Balfour area in South Africa, and its Hollister Development Block project, located in the Carlin Trend in Nevada, United States of America. The Great Basin Gold common shares represented an effective interest on a see-through basis of at least 26% in the Burnstone project on the date which the agreement was entered into between the various parties.

The South African Reserve Bank ("SARB") has granted approval for Great Basin Gold to utilize equity as currency to re-acquire the Southgold common shares, and for Tranter Burnstone to hold the 19,938,650 Great Basin Gold common shares. Required regulatory approvals from the stock exchanges are being sought and the parties have targeted completion for September 2007.

Ferdi Dippenaar, President and CEO of Great Basin Gold, commented, "Although we have continued to keep shareholders informed on the progress of our BEE agreement announced in February 2007, we were pleased to receive SARB approval to proceed with the transaction. This was a significant milestone and allowed the parties to conclude the subscription and acquisition agreement last week. Great Basin Gold has now completed the principal requirements to proceed with the application of its mining rights licence, which we plan to submit shortly."

As a result of having the details provided in this announcement, and in accordance with JSE listing requirements, Great Basin Gold shareholders are no longer required to exercise caution when dealing in their Great Basin Gold shares.

Great Basin has two advanced stage gold projects in two of the world's best gold environments. In addition to its Burnstone Gold Project in South Africa's Witwatersrand Goldfield, the Company holds a 100% interest in the Hollister Property on the Carlin Trend in Nevada, USA.

Ferdi Dippenaar, President and CEO

Cautionary and Forward Looking Statement Information

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address possible future commercial production, reserve potential, exploration drilling results, development, feasibility or exploitation activities and events or developments that Great Basin Gold expects to occur are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, and continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company's annual Form 20-F filing with the United States Securities Commission and its home jurisdiction filings that are available at www.sedar.com.

No regulatory authority has approved or disapproved the information contained in this news release.

Contact Information

  • Great Basin Gold Ltd.
    Tsholo Serunye
    South Africa
    27 (0) 11 884 1610
    or
    Great Basin Gold Ltd.
    Melanee Henderson
    North America
    1-800-667-2114
    Website: www.grtbasin.com
    or
    Breakstone Group
    Barbara Cano
    USA
    (646) 452-2334