Top 12 Mining Stocks 2012 – Pick #12 Great Basin Gold
Symbol: GBG (TSX)
Share price: 95 cents (Close on Dec 30th , 2011)
Shares outstanding: 475,581,798
Market cap: $451,803,000
Great Basin Gold 1yr chart
As you can see the share price has had quite the tumble in 2011. I believe the share price could rebound nicely in 2012 giving investors at this stage a chance at some decent returns. Investors were quick to sell in 2011 as the Burnstone mine has had startup issues and managements production forecasts were not met.
As the company ramps up production to the forecasted 235,000 ounces for 2012(135,000 ounces from Burnstone and 100,000 from Holister) you should see a upwards move in the share price.
Great Basin gold is poised to become a mid tier gold producer with 2 operating mines in production. The company operates the Hollister mine located in Nevada and the Burnstone mine in South Africa.
Hollister Mine:
The Hollister mine in Nevada is one of the highest grade mines in production in the world. Hollister has extremely rich gold grades of nearly 1 oz per tonne. Annual production is targeted at 110,000 ounces per year with a cash cost of $527 per ounce.
Burnstone Mine:
The Burnstone is a huge mine that was commissioned in Feb 2011 in South Africa. Production ramp up is scheduled to produce 254,000 oz at a cash cost of $579 for 25 years when in full production.
Together these mines comprise a total resource base of 23.4M Au oz and 7.3M Au oz reserves.
Great Basin Gold is valued extremely cheap compared to other gold companies on a production basis and a reserve basis.
Potential catalysts in 2012 include:
- Increased production especially from the Burnstone mine
- A higher gold price
- A spinoff or takeover. It has been rumoured GBG has been shopping the Hollister mine or potentially spinning it off to its own company.
Cheers – Admin
