Great Basin Gold Limited is a Vancouver based company that is hunting for funds in Canada to develop its South African gold project. The company needs $75 million capital to move its Burnstone gold mine to full production capacity.
The Burnstone Mine is located about 80 km southeast of Johannesburg and just east of Balfour, in the Mpumalanga Province of the Republic of South Africa. The project has received all of the required permits to complete the development of the mine and commence commercial production.
The mine poured out its first batch of gold in October 2010 and is expected to produce about 150,000 ounces of gold this year. A syndicate of underwriters led by RBC Capital Markets that has agreed to buy 29.4 million common shares of the company at $2.55 per share to raise the required funds for the company.
The underwriters will have an option to buy an additional 15 % of the offering for 30 days after the closing. The capital would be raised by way of short–form prospectus. If all necessary approvals are given by the Toronto stock Exchange the offering is likely to close on February 23, 2011.
Net proceeds from the offering will be used to ramp up the working capital at the Burnstone mine and also to advance the exploration at the Hollister gold project in Nevada in the United States. The junior gold miner is seen as a top pick as this promises to be a watershed year for the company as it moves into commercial production in Burnstone.
Great Basin also owns Hollister, a gold and silver deposit on the Carlin Trend in Nevada.