* Few parties have shown interest for co’s Hollister mining project in Nevada
* Looking at jobs cuts in Johannesburg corporate office
By Shounak Dasgupta and Bhaswati Mukhopadhyay
Aug 15 (Reuters) - Precious metals miner Great Basin Gold Ltd said its CEO had quit and the company might be sold, after problems at its mines led to a cash crunch.
Shares of the South Africa-focused company almost halved to a 14-year low of 22 Canadian cents on the Toronto Stock Exchange.
Chief Executive Ferdi Dippenaar resigned as part of a process to consider strategic options such as a sale of the company or a portion of it, Great Basin said in a statement.
Buyers for the company, if it is sold, could include South Africa’s Gold Fields Ltd, AngloGold Ashanti Ltd and Harmony Gold Mining Company Ltd. But Dahlman Rose analyst Adam Graf said there were only a handful of potential suitors.
“Most western companies would continue to shy away from South Africa due to the political risks there,” he said.
South African miners have been grappling with union militancy, demand for higher wages and proposed higher mining taxes.
Great Basin’s interim CEO Lou Van Vuuren said a few parties had already shown interest for its Hollister mining project in Nevada. Th e company’s other mine, Burnstone, is in South Africa.
“If you look at where the share price is trading, it’s not even the value of what we can get for selling Hollister on its own,” Van Vuuren told Reuters.
He said the company would need an offer of at least 50 Canadian cents per share to get shareholders to vote for it.
Such an offer implies a premium of more than 125 percent to the stock’s current price.
The stock is now so cheap that even if a buyer paid a 30 percent premium, it would be a very good deal, Dahlman’s Graf said.
“In the hands of somebody with better financial wherewithal and technical experts, both the assets could have tremendous value,” Graf said.
Great Basin said on Wednesday that second-quarter revenue fell 43 percent to C$32.4 million because of production problems at both its mines.
This is the fifth straight fall in quarterly sales.
“Because of the revenue shortfalls, the company faces a near-term liquidity challenge,” Great Basin said in a statement.
The company had long-term debt of C$263.1 million as of March 31, 2012.
Great Basin said it was looking to raise at least C$60 million to ease short-term cash concerns through asset sales or new equity.
The company also said it was planning to aggressively cut costs and was talking with lenders to restructure its debt.
The company is looking at reducing staff at its corporate office in Johannesburg, interim CEO Van Vuuren said.
Great Basin’s second-quarter net loss increased to C$22 million, or 5 Canadian cents per share on an adjusted basis, from C$1.1 million, or breakeven per share on an adjusted basis, a year earlier.