August 15, 2012 / 2:37 PM / 5 years ago

Great Basin Gold considers sale; CEO resigns

2 Min Read

(Reuters) - Precious metals miner Great Basin Gold Ltd GBG.TO said it was reviewing strategic alternatives, including a sale of the company, after technical problems at its South Africa mine led to a cash crunch during the second quarter.

Great Basin Chief Executive Ferdi Dippenaar had resigned as part of the process and CFO Lou Van Vuuren would take charge as interim CEO, the company said in a statement.

Shares of the company fell 43 percent to a 14-year low.

The company plans to raise at least C$60 million ($60.49 million) through asset sales and issue of new equity to ease short-term cash concerns.

The company said revenue was hit by lower production at its Burnstone mine in South Africa and lower recovery at its Hollister mine in Nevada.

Great Basin said revenue fell 43 percent to C$32.4 million for the second quarter.

The net loss widened to C$22 million, or 5 Canadian cents per share on an adjusted basis, for April-June from C$1.1 million, or breakeven per share on an adjusted basis, a year earlier.

The company said it was cutting costs and talking with lenders to restructure loan facilities.

Shares of Great Basin, which has a market value of $239.4 million, were down 41 percent at 25 Canadian cents in early-morning trading on Wednesday on the Toronto Stock Exchange.

($1 = 0.9919 Canadian dollars)

Reporting by Shounak Dasgupta in Bangalore; Editing by Don Sebastian

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