Great Basin Gold expects to have the project finance for its Burnstone mine, in South Africa, finalised within the next two weeks, CFO Lou van Vuuren said last week.

Three of the four banks in the lending syndicate have signed off on the facility, and the fourth bank is expected to seek final 
approval from its credit committee soon, he said.


Van Vuuren said that the delays were related to the lenders’ internal administrative and approval processes, and that the company had no reason to believe that it would not finalise the financing.

“The time nowadays required for the approval and finalisation of any transaction has increased significantly,” he said.

“But we are confident that we should resolve this process in the next two weeks.”

The fourth bank actually 
approved the credit facility provisionally in April, but the lender’s internal processes require further approval once the final technical reports and the final financial model are completed.

These have now been handed over, and Great Basin is “quite confident” final approval will be given during next week, Van Vuuren told analysts and investors on a conference call.

The process to finalise the legal documentation for the facility also began in late June, and all the lenders and the company have 
reviewed the documents. This process is about 95% complete, Van Vuuren said.

The Burnstone project facility will consist of R800-million in project finance, R200-million that was already drawn down in 2008 and R180-million in stand-by debt to cover potential cost overruns.


The hedging structure, which will be a zero-cost collar, will be finalised on draw down of the facility.


Great Basin plans to start commercial production at Burnstone in June 2010.

The company, which started mining and stockpiling ore earlier this year, is currently sinking a vertical shaft, which it will complete and commission in the second quarter of next year.


Construction of the metallurgical plant is also scheduled for completion in March next year.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.