Stock falls over and CEO resigns after a 'near-term liquidity challenge' at Great Basin Gold
Great Basin Gold's stock was cut in half and Ferdi Dippenaar, the company's CEO, resigned after it announced liquidity problems in its second quarter.
"Due to technical and infrastructure issues at both principal projects, the Company's mining operations underperformed in the second quarter," writes the company.
"As a result, Great Basin Gold lost $0.05 per share on revenues of $32.4 million. Because of the revenue shortfalls, the Company faces a near-term liquidity challenge."
The stock fell 45.46% on Wednesday to 24 cents a share.
In the six months ended, revenue dropped from $83.08 million a year ago to $65.74 million this year.
The company said the revenue shortfalls were due to delays in on-reef ore development and water management problems at the Burnstone Mine, located at the Witwatersrand Basin, South Africa. There were also delays in accessing higher grade stopes at the Hollister trial mining project, situated in the Carlin Trend in Nevada.
Dippenaar, the company's CEO and president, was replaced by Lou Van Vuuren, the company's CFO.
Great Basin Gold believes the storm has past.
"The Company believes that the technical and infrastructure issues that lead to this quarter's unexpectedly poor operating performance are substantially behind it, and forecast combined production for the remainder of 2012 to be in the range of 58,000 to 68,000 Au eqv oz."
Correction: Location of the Hollister and Burnstone mines were mixed up in the original story. The post has been corrected.