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Mining PRs and the Ottotrans™: Part Four

The Ottotrans™ is back for another episode, as once again we try to make sense of those weird and wonderful mining company press releases. Today’s example is the PR emitted by Great Washbasin Gold (GBG) just a few minutes ago.

This is what it says

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VANCOUVER, March 13 /PRNewswire-FirstCall/ – Great Basin Gold Ltd. (the “Company”) (TSX: GBG; NYSE Alternext: GBG; JSE: GBG) announces that it has completed its previously announced public offering of 100,000,000 units at a price of C$1.30 per unit resulting in gross proceeds of C$130,000,000. Each unit is comprised of one common share and one-half of one common share purchase warrant. Each full warrant will entitle the holder to purchase a common share of the Company at a price of C$1.60 at any time before 5:00 p.m. (Vancouver time) on October 15, 2010. The Company has granted to the underwriters an over-allotment option, exercisable for a period of 30 days following closing of the offering, to purchase up to an additional 15,000,000 common shares and/or 7,500,000 warrants to cover over-allotments and for market stabilization purposes, which if exercised would result in additional gross proceeds of C$19,500,000. A syndicate led by BMO Capital Markets and RBC Capital Markets acted as underwriters in connection with the offering.

The net proceeds from this offering will be used by the Company to fund the development of the Company’s Burnstone project in South Africa and for general corporate purposes.

Ferdi Dippenaar, President and CEO, commented: “The support received for this financing shows that the market, like the management of Great Basin Gold, believes that there is significant value in our Burnstone gold project. With initial commercial production at Burnstone targeted for July 2010 and our Hollister Project in trial mining phase, the Company is emerging as a significant gold producer.”

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And this is what it means

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VANCOUVER, March 13 /PRNewswire-FirstCall/ – Great Washbasin Gold Ltd. (the Company) announces that it has completed its previously announced public reaming of 100,000,000 units at a giveaway price of C$1.30 per unit resulting in gross proceeds of C$130,000,000. Each unit is comprised of one common share and one-half of one common share purchase warrant. Each full warrant will entitle the holder to purchase a common share of the Company at a price of C$1.60 at any time before 5:00 p.m. (Vancouver time) on October 15, 2010, which is bound to happen so this one really counts as a boyz-special giveaway. To rub it in and add insult to injury, the Company has granted to its new, special best friends an over-allotment option, exercisable for a period of 30 days following closing of the offering, to purchase up to an additional 15,000,000 common shares and/or 7,500,000 warrants to cover over-allotments and for market stabilization purposes, which when exercised (because this one is bound to fill at these knockdown prices) would result in additional gross proceeds of C$19,500,000. A syndicate led by BMO Capital Markets and RBC Capital Markets acted as pimps in connection with the offering.

The net proceeds from this offering will be used by the Company to fund the development of the Company’s Burnstone project in South Africa and for general corporate purposes. We’re not telling you if we will need to dilute further in the future so you keep guessing on that one, suckers.

Ferdi Dippenaar, President and CEO, commented: “The banks screwed us over and in the end couldn’t lend us the moolah, so really we had no choice but to ream our longstanding shareholders via the Canadian criminals in suits. The amount of large players that queued up for this extremely dilutive financing shows that the the Canadian boyz club is alive and well and, like the management of Great Basin Gold, knew they’d be mad to ignore the stupid price we set because of the significant value in our Burnstone gold project. Initial commercial production at Burnstone was originally targeted for 2009 but we’re going to miss that deadline by a country mile, so let’s hope we can get a couple of ounces poured in July 2010. Our Hollister Project is also way behind schedule and still in trial mining phase and the Company is emerging as a significant retail goldmine shareholder’s pain in the ass. But hey…retail, y’know? If they can’t take a joke, **** ’em.”

Related Link

Mining PRs and the Ottotrans™: Part Three

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