Great Basin sees rosy economics for Hollister development

Vancouver – An updated preliminary assessment of Great Basin Gold‘s (GBG-T, GBN-X) and Hecla Mining‘s (HL-N) proposed underground gold mine at the Hollister Development Block project in north-central Nevada shows strong positive economics.

Targeting high-grade gold mineralization in the Gwenivere, Clementine and South Gwenivere vein systems, the study indicates a potential 78% internal rate of return (IRR) and a net present value (NPV) of over US$118 million using gold and silver prices of US$450 per oz. and US$7.00 per oz. respectively.

Using the previous inferred resource estimate of 652,000 tonnes grading 44.2 grams gold per tonne and 240 grams silver per tonne, the review proposes a 472-tonne-per-day production rate with annual output of 150,000 ozs. of gold and 760,000 ozs. of silver over an estimated 5.9-year mine life.

Total operating costs of US$258 per gold equivalent oz. are projected on life of mine production of 882,000 ozs. of gold and 4,529,000 ozs. of silver. Capital costs are estimated at US$41.3 million with an expected 1.2-year payback period.

The Hollinger Development Block (HDB) comprises a small central portion of the 85-sq. km Hollinger property (previously called Ivanhoe) situated in the northern portion of the Carlin Trend.

Hecla is earning a 50% interest in HDB from Great Basin by completing an underground exploration and development program. A 15,000-metre underground drill program is being conducted on the project to deliver data for a feasibility study that is expected to be competed by mid-2007.

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