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AN INDEPENDENT INTERNATIONAL GOLD MINING COMPANY “DELIVERING GROWTH - CREATING VALUE” October 2006
Transcript

AN INDEPENDENT INTERNATIONAL GOLD MINING COMPANY

“DELIVERING GROWTH -CREATING VALUE”

October 2006

GENERAL COMPANY INFORMATION

LISTINGSToronto Stock Exchange : GBGAMEX : GBN

SHAREHOLDING• 100% free float• shares outstanding : 112,618,213• fully diluted : 117,920,389• 12 month high/low CDN$ : 2,77 – 0,97

CASH POSITION• cash on hand : US$ 34,0 million

OUR STRATEGY FOR GROWTH

FOCUSSED ON CREATING VALUE FOR OUR SHAREHOLDERS

Bring our developmentprojects into production

Active focus on exploration

Opportunistic acquisitions

• Burnstone – 214 000 oz/annum• HDB – 93 500 oz/annum

• further exploration potential on both properties

• focus on putting together a pipeline of projects

Explore Build Operate

We have the management teams …..…. to deliver on our undertakings

PIPELINE OF PROJECTS AT ALL STAGES OF DEVELOPMENT

• South Rand Basin • Burnstone• HDB• Hollister Property

• Burnstone• HDB

Grass rootsexploration

Advancedexploration

OperatingminesOperating

minesProject

development

HOLLISTER PROPERTYCarlin Trend

USA

WitwatersrandSOUTH AFRICA

BURNSTONE MINE

WE OWN TWO MAJOR GOLD PROJECTS

LOCATED IN THE WORLD’S MOST RECOGNISED GOLDFIELDS

GBG PRODUCTION PROFILE

0

100000

200000

300000

400000

500000

600000

700000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Burnstone HDB

Intermediate gold producers

We plan to close theproduction gap

BURNSTONE MINE LOCATION

Evander GoldfieldsHarmony

Klerksdorp GoldfieldsDRD

Anglo GoldHarmony

Carletonville GoldfieldsAnglo GoldGold FieldsHarmony

DRD

West Rand GoldfieldsPlacer/WAR

Harmony

East Rand Goldfields

South Rand Goldfields

Welkom GoldfieldsHarmony

Goldfields

50 km

In the South Rand Goldfields we own

mineral and prospecting rights

over an area of approx 30 000 ha.

261 surface boreholes

completed in the Burnstone Project

Area

• 80 km’s from Johannesburg

• easily accessible from national highways

• 6,5 km’s from nearest town and infrastructure which will be a principal supplier of:

• labour • power• water• consumables, etc.

• an exciting challenge – a new gold mine in a “new South African mining environment”

BURNSTONE MINE LOCATION

BURNSTONE FEASIBILITY STUDY COMPLETED

Burnstone is a typical SA long life gold mine with one difference, we start mining from a decline at 316 meters or 948 feet

below surface

The mine will produce approx 214 000 oz/annum over a LOM of 14 years;

at a cash cost of US$254/oz

and a total cost of US$314/oz

SIGNIFICANT LEVERAGE ON MEASURED AND INDICATED RESOURCES

Measured

5,864,0009.220.65602182,40419,777,6344007,268,0008.390.64538226,04426,941,2173508,239,0008.020.62499256,27231,958,611300OZAUCWCMGTKILOSTONNESCUT-OFF

Indicated

1,244,0004.201.6167438,6909,216,1614001,344,0004.341.4763741,7919,625,8303501,578,0004.571.2255849,08210,740,968300

CUT-OFF

Total Measured and Indicated

7,108,0007.630.80613221,09528,993,7954008,611,0007.320.75551267,83536,567,0473509,817,0007.150.71507305,35342,699,579300

CUT-OFF

Qualified Persons G.J. van der Heever, Pr.Sci.Nat. December 2005

Inferred

189,00012.610.415145,874465,796400382,00011.710.3743311,8701,014,016350603,00011.130.3538718,7651,685,810300

CUT-OFF

AREA 1 - MINEABLE RESERVE OF 2.4 M OUNCES

BURNSTONE HAS A TOTAL MEASURED AND INDICATED RESOURCE OF 7,1 MILLION OUNCES

2 378 6174.715 903 735Total Reserve

135 3865.4783 106Probable

2 243 2314.615 120 629Proven

Au content(oz)

Grade(g/t)

ReserveTonnage (t)Category

BURNSTONE MINE CAPITAL COST

LIFE OF MINE CAPITAL COST OF US$60 PER RESERVE OUNCE

1 013TOTAL PROJECT CAPITAL15Main water supply36Tailings dam facility2First fill of mill

160Metallurgical plant800Mine development

CAPITALR’MILLIONITEM

EXCELLENT FINANCIAL RETURNS

For the March 2006 quarter, the

SA producers earned revenue of R130 000/kg

and had

cash costs of R84 000/kg

or US$398/oz

4,7 yearsPayback

19IRR (%)139NPV 5% (US$ million)287NPV 0% (US$ million)

US$ 254/ozR57 256/kgLOM Cash Cost

US$ 153 millionLOM Capital ExpenditureR7,00 – US$1,00ZAR:US$ Exchange Rate

US$ 450/ozR100 000/kgGold Price

Results of Feasibility Study

CURRENT GOLD PRICES ARE HIGHER THAN FEASIBILITY STUDY ASSUMPTIONS

363409 445

554620

0

150

300

450

600

750

2003 2004 2005 1Q06 Recent

$

$

$

$

$

$

$$

$

$$

Average gold price/oz is increasing steadily

Feasibility Study is based on US$450/oz

BURNSTONE MINE SENSITIVITY ANALYSIS

At US$600 per ounce the NPV

increases to US$523 million,the IRR to 34%

US$4,55 per share

29.224.519.08.026.321.515.97.523.218.312.57.019.714.78.56.5500450400ZAR/AU Price

IRR

4903772648.04483352227.53992861737.03432301176.5500450400ZAR/AU Price

NPV(0) – US$ MILLIONS

• complete permitting• commence bulk sample activities:

constructing decline to 321 metres below surface to commence stoping

• anticipated cost of R105m (US$15m) which includes R16,7m (US$2,4m) for purchase of properties

• continue with surface drilling to convert remaining 4,7 million ounce resource to reserve ounces

• GBG is adequately financed for the expenditure

OUR SHORT TO MEDIUM TERM PLANS FOR THE BURNSTONE MINE

BURNSTONE MINE DECLINE ANDSHAFT LAYOUT

Surface

2 145m development

required

First reef elevation at 220 m/BS

Bulk sample stoping –316 m/BS

Final shaft depth – 495 m/BS

Decline Portal

BURNSTONE MINE DECLINE CONSTRUCTION COMMENCED ON 7 JULY 2006

Converting the remaining 4,7 million ounces to measurable reserves

Burnstone Exploration Activities

SOUTHRAND BASIN EXPLORATION PORTFOLIO

DRUKFONTEIN 613IR

50%

SILVERBANK 611IR

ROODEPOORT 598IR

HERPSFONTEIN 610IR

WITPOORT 545IR

DOORNHOEK 577IRDOORNHOEK 577IR

550 IR

WILLEM SDAL

TOWNSHIP

VANKOLDERSKOP552 IR

BAKKIESFONTEIN568IR

ZYFERFONTEIN 576IRZYFERFONTEIN 576IR

RIETVALEI 546IR

VANKOLDERSKOP

568IRBAKKIESFONTEIN

50%50%

KLEINFONTEIN

SOLYSOM BRA570IR

RUSTFONTEIN 548IR

BRAKFONTEIN 513IR

567IR

DAGBREEK 551IR

BRAKFONTEIN 513IR

VANKOLDERSKOP 547IR

RIETFONTEIN 566IR

HEXRIVIER 634IR

WILGEFONTEIN 544IR

BARNAARDSKOP 637IR5/12

M OOIPLAAS 614IR

HAARTBEESTFONTEIN 638IR

ROOIWAL 607IR

VLAKFONTEIN 599IRVLAKFONTEIN 599IR

STRYFONTEIN 609IR

WITPOORT 565IRWITPOORT 565IR

RIETVLEY 600IR

557IR

BANTOEDORP

BALFOUR

RIETBULT ESTATES 505IR

VLAKFONTEIN 558IR

RIETFONTEIN553IR

SPRINGFONTEIN549IR

Siy athemba

VLAKFONTEIN 556IR

555IR

DASPOORT 564IR

Balfour

RIETFONTEIN 561IR

VLAKFONTEIN569IR

5km0km

RIETBULT ESTATES

BALFOUR

RIETFONTEIN ROODEPOORT-KILDARE

BARNAARDSKOP

BURNSTONE RESOURCE AREA OUTLINE

-275

00 m

E

-250

00 m

E

-225

00 m

E

-200

00 m

E

-300

00 m

E

-350

00 m

E

-325

00 m

E

-175

00 m

E

2945000 mN

2955000 mN

2960000 mN

2952500 mN

2950000 mN

2947500 mN

2957500 mN

-375

00 m

E

AREA3

AREA 2

AREA 1

BABBBQBR

BDBCBE BS

BT

BUBL

ATAW

AX

AHAI AKAMAP AJ

ALAO

AP3BFBG

BURNSTONE RESERVE & RESOURCE AREAS

2.5 km

RESOURCE AREA OUTLINE

Width X AuContent

2250

1000

4002501505

cmgt

BURNSTONE RESERVE EXPANSIONAREA 1

-310

00 m

E

-340

00 m

E

-330

00 m

E

-320

00 m

E

-350

00 m

E

-2946000 mN

-2947000 mN

-390

00 m

E

-2952000 mN

-2951000 mN

-2950000 mN

-2949000 mN

-2948000 mN

-300

00 m

E

-360

00 m

E

-380

00 m

E

-370

00 m

E

AR

AREA 1

AHAHAHAHAHAHAHAHAHAIAIAIAIAIAIAIAIAI

AKAKAKAKAKAKAKAKAK

AMAMAMAMAMAMAMAMAMAPAPAPAPAPAPAPAPAP

AJAJAJAJAJAJAJAJAJ

ALALALALALALALALALAOAOAOAOAOAOAOAOAO

AP3AP3AP3AP3AP3AP3AP3AP3AP3

BFBFBFBFBFBFBFBFBFBGBGBGBGBGBGBGBGBG

1 km

Width X AuContent

2250

1000

4002501505

cmgtAREA 1 BLOCK D PHASE 1 DRILLINGAREA 1 BLOCK D PHASE 2 DRILLINGAREA 1 BLOCK D PHASE 3 DRILLING

Drill Holes Without KR IntersectionHistorical Drill Holes

DRILL HOLE LEGEND

PLANNED FEASIBILITY MINING PANELS

PLANNED EXPLORATION DRILLINGAREA 1, MINING BLOCK D

Burnstone Block D Phase 1 Exploration:Planned Meters Area of influence m² Au g/t cut-off Contained grams Contained oz

3 300 560 000 3.50 5 448 800 176 000

Burnstone Block D Phase 2 Exploration:Planned Meters Area of influence m² Au g/t cut-off Contained grams Contained oz

5 000 1 020 000 3.50 9 924 600 319 000

Burnstone Block D Phase 3 Exploration:Planned Meters Area of influence m² Au g/t cut-off Contained grams Contained oz

2 700 800 000 3.50 7 784 000 250 000

TOTAL METRES DRILLING 11 000

TOTAL RESOURCES CONVERTED TO RESERVES: 745 000

IF DISCOUNTED BY 20% - WE ADD APPROXIMATELY 600 000 OUNCES

BURNSTONE RESERVE & RESOURCE EXPANSION AREA 2

-320

00 m

E

-340

00 m

E

-330

00 m

E

-300

00 m

E

-290

00 m

E

-280

00 m

E

-310

00 m

E AREA 2

490490490490490490490490490

470470470470470470470470470

425425425425425425425425425 440440440440440440440440440

BABABABABABABABABA

BBBBBBBBBBBBBBBBBB

BQBQBQBQBQBQBQBQBQ BRBRBRBRBRBRBRBRBR

450450450450450450450450450450450450450450450450450450

580580580580580580580580580

BDBDBDBDBDBDBDBDBDBCBCBCBCBCBCBCBCBC

BEBEBEBEBEBEBEBEBE 450450450450450450450450450

500500500500500500500500500

440440440440440440440440440

530530530530530530530530530BSBSBSBSBSBSBSBSBS

BTBTBTBTBTBTBTBTBT

BUBUBUBUBUBUBUBUBU

BLBLBLBLBLBLBLBLBL

900900900900900900900900900

1,1001,1001,1001,1001,1001,1001,1001,1001,100

1,1001,1001,1001,1001,1001,1001,1001,1001,100

ATATATATATATATATAT

AWAWAWAWAWAWAWAWAW

AXAXAXAXAXAXAXAXAX

2250

Width X AuContent

1000

4002501505

cmgtPLANNED FEASIBILITY MINING PANELS

Drill Holes Without KR Intersection

AREA 2 PHASE 4 DRILLING

Historical Drill Holes

AREA 2 PHASE 1 DRILLING

DRILL HOLE LEGEND

AREA 2 PHASE 2 DRILLINGAREA 2 PHASE 3 DRILLING

PLANNED EXPLORATION DRILLINGAREA 2

Phase 1 Exploration:Planned Meters Area of influence m² Au g/t cut-off Contained grams Contained oz

2 385 560 000 3.50 5 448 800 175 000

Phase 2 Exploration:Planned Meters Area of influence m² Au g/t cut-off Contained grams Contained oz

1 900 600 000 3.50 5 838 000 188 000

Phase 3 Exploration:Planned Meters Area of influence m² Au g/t cut-off Contained grams Contained oz

2 480 800 000 3.50 7 784 000 250 000

Phase 4 Exploration:Planned Meters Area of influence m² Au g/t cut-off Contained grams Contained oz

3 520 1 680 000 3.50 16 346 400 525 000TOTAL METRES DRILLING: 10 000TOTAL RESOURCES CONVERTED TO RESERVES: 613 000TOTAL INDICATED RESOURCES CONVERTED TO MEASURED RESOURCES: 525 000

IF DISCOUNTED BY 20% - WE ADD APPROXIMATELY 1 MILLION OUNCES

HOLLISTER DEVELOPMENT BLOCK PROJECT - LOCATION

Elko

Las Vegas

Battle Mtn

Reno

100 Miles

NEVADA

CALIFORNIA

OREGON

UTAH

ARIZONA

IDAHOIvanhoe Property(Great Basin Gold)Ivanhoe Property(Great Basin Gold)

Rossi Property(Barrick/Meridian)

(Newmont)Midas Property

Dee Mine

Meikle MinePost/Betze Mine

Leeville Property(Newmont)(Barrick)

Hollister Property(Great Basin Gold)

27 square miles

5 Miles Gold Deposits

32.7 square miles

Ken Snyder Mine

Carlin Mine

Hollister Development Block

Goldstrike MineGoldstrike Property

Leeville Deposit

Rossi Deposit

Dee Property(Glamis)

CARLIN

TREND

HOLLISTER DEVELOPMENT BLOCK: SURFACE TRACE OF VEINS

HOLLISTER DEVELOPMENT BLOCK: A PACKAGE OF HIGH GRADE GOLD AND SILVER VEINS

1

As audited by Behre Dolbear & Company Ltd. Qualified Person James A. Currie, P.Eng. April 2002

Inferred Mineral Resource

RESOURCE GRADE CONTAINED OUNCESTons

(000’s)Gold

oz/tonGoldg/ton

Silveroz/ton

Silverg/ton

Gold(000’s)

Silver Gold Equity(000’s)

719 1,29 41,5 7,00 225,0 926 5,033 1 000

(000’s)

HOLLISTER DEVELOPMENT BLOCK: VEIN SYSTEMS – LOOKING NORTHWEST

Decline

HOLLISTER DEVELOPMENT BLOCK: PLANNEDUNDERGROUND DEVELOPMENT LAYOUT

N

DECLINE FACE AT 500 FEET

East decline rib of the Gwenivere Vein

HOLLISTER DEVELOPMENT BLOCK SITE LAYOUT

HOLLISTER PROPERTY: NEARBY PROCESSING FACILITIES ARE AVAILABLE

8080

Beowawe

Winnemucca

Carlin

TuscaroraMidas

Elko

20 Miles

TownsMine (miles from Ivanhoe)

Legend

(49mi)Jerritt Canyon (Queenstake Resources)

Midas (12mi)(Newmont)

Twin Creeks (48mi)(Newmont)

Getchell (43mi)(Barrick)

Pinson (38mi)(Barrick)

Lonetree (65mi)(Newmont)

Goldstrike (18mi)(Meikle, Post-Betze)

(Barrick/Newmont)Carlin (24mi)(Newmont)

Gold Quarry (37mi)(Newmont)

Battle Mountain(92mi)(Newmont)

McCoy/Cove(112mi)(Kinross)

Cortez (94mi)(Barrick)

Hollister Property

(Great Basin)

Battle Mountain

Golconda

ROBUST RETURNS FROM PRELIMINARY ASSESSMENT OF HDB IN NEVADA

Inferred Mineral Resource 719,000 tons grading 1.29 oz/ton gold and 7.00 oz/ton silver

Annual Production 150,000 oz gold760,000 oz silver

Life of Mine Production 882,000 oz gold4,529,000 oz silver

Start up Capital Cost $41.3 million

Cash Cost $213.25/eq oz1

Total Cost $258.00/eq oz1

Life of Mine 5.9 years

Payback 1.2 years

Internal Rate of Return 78%

Net Present Value (5% discount) $118.3 million ¹ Gold equivalent is calculated using the above gold and silver prices and the formula:

Au-eq oz == Au oz + (Ag oz * Ag price/Au price)

Qualified person D. Stone, P.Eng., August 2006

Hollister Property Exploration Activities

Franco Nevada Mining Corp

started Midas in December 1998.

Newmont purchased in 2002 with a 7 year mine

plan. Midas produced over

217,000 ounces in the first year for

Newmont. Current reserves (0.25 oz cut off) 2.86mil

tons @0.51oz Au avg grade and

6.45ozAg = 1.45miloz Au, 18.46miloz Ag.

PLANNED EXPLORATION – REMAINDER OF HOLLISTER PROPERTY

HOLLISTER PROPERTY -APPROXIMATELY 32 SQ MILES

LAND GAPS

Newmont Mining Company

Property

New West Gold Company

0km 2km

GBG Property Boundary

Hollister Development Block Area

HOLLISTER PROPERTY TARGETS

ButteNorth Hatter

Hatter

Heap Leach

West HatterGraben

Hatter

IV87203

Western Extension

Mined out open pits

General Company Information

GREAT BASIN GOLD SHAREHOLDERS

Source: NBF

Rank Investor Name Current Position1

Libra Advisors, LLC

2,505,5752

Deutsche Investment Management Americas

2,400,0003

Deutsche Asset Management (Australia) Ltd2,229,000

4

RBC Asset Management, Inc.

2,150,0005 Van Eck Associates Corporation 1,965,0276

MFC Global Investment Management

1,964,8507

Mackenzie Financial Corporation

1,600,0008

Franklin Advisers, Inc.1,390,000

9

Oppenheim Kapitalanlagegesellschaft mbH

1,389,09010

Natcan Investment Management

1,201,20011

Lombard Odier Darier Hentsch & Cie274,800

12 233,90013

IG Investment Management Limited

180,00014 Renaissance Technologies Corp 153,60015

Morgan Asset Management, Inc.

150,000Pacific West Financial Consultants, Inc.

CORPORATE INFORMATION

TRANSFER AGENTComputershare Trust Company of Canada4th Floor, 510 Burrard StreetVancouver, British ColumbiaCanada V6C 3B9Tel: (604) 661-0258Fax: (604) 683-3694

ATTORNEYS Lang MichenerBarristers & Solicitors1500 - 1055 West Georgia StreetVancouver, British ColumbiaCanada V6E 4N7

AUDITORSKPMGChartered Accountants777 Dunsmuir StreetVancouver, British ColumbiaCanada V6E 1K3

BANKCanadian Imperial Bank of Commerce400 Burrard StreetVancouver, British ColumbiaCanada V6C 3A6

LISTEDAMEX (GBN)TSX (GBG)

INVESTOR SERVICESInvestor RelationsGreat Basin Gold Ltd.1020 - 800 West Pender StreetVancouver, British ColumbiaCanada V6C 2V6Telephone: Facsimile: (604)

1-800-Email: [email protected]

(604) 684-6365684-8092

Toll Free: 667-2114

Web Site: http://www.greatbasingold.com

CAPITALIZATION

96,685,379101,427,379

Common Authorized UnlimitedIssuedFully Diluted

(as of December 31, 2005)

OFFICERSRobert A. Dickinson, Co-ChairmanRonald W. Thiessen, Co-ChairmanFerdi Dippenaar, President and CEO

DIRECTORSDavid J. CopelandScott D. CousensRobert A. DickinsonJeffrey R. MasonRonald W. Thiessen

T. Barry CoughlanWayne KirkDavid ElliottWalter T. SegsworthRobert StillSipho NkosiPatrick Cooke

CORPORATE ADDRESS1020 - 800 West Pender StreetVancouver, British ColumbiaCanada V6C 2V6Telephone: (604) 684-6365Facsimile: (604) 684-8092Toll Free: 1-800-667-2114

Jeffrey R. Mason, Secretary and CFO

Ferdi Dippenaar

138 West Street, 4th FloorSandown, 2196PO Box 78182Sandton, South Africa 2146Telephone: 27-11-884-1610Facsimile: 27-11-884-1826

Great Basin Gold Ltd. (South Africa)

• This presentation includes certain statements that may be deemed "forward-looking statements". Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the risks inherent in the Company's business, Investors should review the Company's annual Form 20-F filing with the United States Securities Commission and its home jurisdiction filings that are available at www.sedar.com.

• Mineral resources do not have demonstrated economic viability. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever achieve the status of ore reserves.

• All information relating to the contents of the Pre-Feasibility Study, including but not limited to statements of the Burnstone project's potential and the other information such as capital and operating costs, production summary, and financial analysis, are "forward looking statements" within the definition of the United States Private Securities Litigation Reform Act of 1995. The information relating to the possible construction of conveyor, grinding and leaching plant facilities also constitutes such "forward looking statements." The Pre-feasibility Study was prepared to broadly quantify the Burnstone project's capital and operating cost parameters and to provide guidance on the type and scale of future project engineering and development work that will be needed to ultimately define the project's likelihood of feasibility and optimal production rate. It was not prepared to be used as a valuation of the Burnstone project nor should it be considered to be a final feasibility study. The capital and operating cost estimates which were used have been developed only to an approximate order of magnitude based on generally understood capital cost to production level relationships, and although they are based on engineering studies, these are preliminary so the ultimate costs may vary widely from the amounts set out in the Pre-feasibility Study. These factors could materially adversely impact the projected economics of the Burnstone project. As is normal at this stage of a project, data in some areas was incomplete and estimates were developed based solely on the expertise of the individuals involved as well as the assessments of other persons who were involved with previous operators of the project. At this level of engineering, the criteria, methods and estimates are preliminary and result in a high level of subjective judgment being employed. There can be no assurance that the potential results contained in the Pre-feasibility Study will be realized.

• The following are the principal risk factors and uncertainties which, in management's opinion, are likely to most directly affect the conclusions of the Pre-feasibility Study and the ultimate feasibility of the Burnstone project. The mineralized material at the Burnstone project is currently classified as a measured and indicated resource, and a portion of it qualifies under Canadian mining disclosure standards as a proven and probable reserve, but readers are cautioned that no part of the Burnstone project's mineralization is considered to be a reserve under US mining standards. For US mining standards, a full feasibility study would be required, which would likely require some additional drilling and metallurgical studies, supplementary process tests and other engineering and geologic work additionally all necessary mining permits would be required in order to classify the project's mineralized material as an economically exploitable ore reserve. There can be no assurance that this mineralized material will become classifiable as a reserve and there is no assurance as to the amount, if any, that might ultimately qualify as a reserve or what the grade of such reserve amounts would be. Final feasibility work has not been done to confirm the mine design, mining methods and processing methods assumed in the Pre-feasibility Study. Final feasibility could determine that the assumed mine design, mining methods and processing methods are not correct. Construction and operation of the mine and processing facilities depend on securing environmental and other permits on a timely basis. No permits have been applied for and there can be no assurance that required permits can be secured on a timely basis. Data is not complete and cost estimates have been developed, in part, based on the expertise of the individuals participating in the preparation of the Pre-feasibility Study and on costs derived from projects which are believed to be comparable, and they are not based on firm price quotes. Costs, including design, procurement, construction and on-going operating costs and metal recoveries could be materially different from those contained in the Pre-feasibility Study. There can be no assurance that mining can beconducted at the rates and grades assumed in the Pre-Feasibility Study. There can be no assurance that these infrastructure facilities can be developed on a timely and cost-effective basis. Energy risks include the potential for significant increases in the cost of fuel and electricity. The Pre-feasibility Study assumes specified, long-term prices levels for gold. The price of this metal is historically volatile, and the Company has no control of or influence on its price which is determined in international markets. There can be no assurance that the price of gold will continue at current levels or that it will not decline below the prices assumed in the Pre-feasibility Study. Prices for gold have been below the price ranges assumed in Pre-feasibility Study at times during the past ten years, and for extended periods of time. The project will require major financing, probably a combination of debt and equity financing. Interest rates are at historically low levels. There can be no assurance that debt and/or equity financing will be available on acceptable terms. A significant increase in costs of capital could materially adversely affect the value and feasibility of constructing the project. Other general risks include those ordinary to very large construction projects, including the general uncertainties inherent in engineering and construction cost, the need to comply with generally increasing environmental obligations, and accommodation of local and community concerns. South African mining tenure laws require that significant economic ownership in Burnstone be held by historically disadvantaged peoples and for which ownership rights the Company may not be significantly compensated. The economics of the Burnstone Project are sensitive to the US Dollar and South African Rand exchange rate and this rate has been subject to large fluctuations in the last several years.


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