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Great Basin plans to become a mid-tier gold producer through a well-defined strategy of:
•Developing our highly prospective projects into high margin productive units;
•Continuing to increase our resource base through focused exploration programs;
•Acquiring prospective companies and/or assets.
In 1997, Great Basin acquired Newmont's 75% interest in the Hollister Gold Property (formerly known as the Ivanhoe Gold Property) in Nevada for US$6 million. Two years later, the company increased its interest to 100% through purchase of all the shares of Touchstone Resources, which held the remaining 25%. Great Basin explored the property from 1997-2001, outlining gold resources in the Clementine, Gwenivere and South Gwenivere vein systems and also indicating excellent additional exploration potential.
In mid-2002, Great Basin entered into earn-in and joint operating agreements with Hecla Mining Company to undertake the underground access and exploration program at its Hollister Property, to complete the development and to operate the mine. The Great Basin-Hecla agreement covers the Hollister Development Block that includes the three vein systems. Hecla has the option to earn a 50% working interest in the Block by funding a US$21.8 million advanced exploration and development program, leading to commercial production. In addition, Hecla will pay Great Basin a revenue royalty that escalates with the gold price.
In November 2002, Great Basin acquired the right to purchase 100% interest in South African company Southgold Exploration (Pty) Ltd., which has rights to the Burnstone Gold Property. The two-stage acquisition was completed in January 2004, for a consideration totalling US$3.25 million in cash, 21 million shares and 10.5 million warrants, and US$1.5 million in expenditures.
In April 2005, Great Basin signed a Heads of Agreement with Tranter Investments (Pty) Ltd., a Black Economic Empowerment (BEE) company to meet its BEE commitment on Burnstone. The agreement sets out the terms whereby Tranter may acquire an interest in Southgold and the Burnstone property.
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