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Great Basin Gold agrees terms of US$150 mln credit facility

Great Basin Gold (TSE:GBG)(AMEX:GBG)(JSE:GBG) Wednesday said it has finalized a term facility agreement for US$150 million, provided by Credit Suisse AG and Standard Chartered Bank on a co-arranger basis.

Funds are expected to be available for draw down on or before December 15, 2011, following the fulfillment of customary conditions, the company said.

Investors cheered the news, sending Great Basin stock up 14 percent to $1.19 Wednesday afternoon.

Great Basin Gold's chief executive and president, Ferdi Dippenaar, said: "We are extremely pleased with the speed and efficiency with which this low cost facility was arranged and executed by the lenders.

"Following the operational delays the credit facility provides the funding required to finance the additional development to help enable the delivery of the previously announced 2012 production build-up plan at Burnstone."

The facility, for which the South African Burnstone project is primary security, has a maximum term of five years from the date of draw down, with capital re-payment commencing March 15, 2013, and bears interest at a margin of four percent over the US dollar LIBOR rate.

Proceeds from this facility will be used to settle the outstanding principle amount of Term loan 1 and amounts drawn down under the standby debt facility, which was closed in August 2011.

Great Basin Gold is an emerging gold producer which is focused on its Hollister project in Nevada and the Burnstone project in South Africa.

In November, the company almost tripled gold production in the third quarter as it recovered 32,531 gold equivalent ounces, and sold 29,308 ounces, at a realized price of $1,593 per gold equivalent ounce.

This compares with 16,938 gold equivalent ounces recovered a year ago, and 11,005 ounces sold, at a realized price of $1,111 per gold equivalent ounce.

Great Basin said at the time that the latest quarter's results were negatively impacted by the need for the additional development to access mining blocks at Burnstone.