Great Basin Gold announced in late February 2013 that its subsidiary Rodeo Creek Gold has entered U.S. Bankruptcy Code Chapter 11 restructuring proceedings. Great Basin Gold Ltd. is itself in creditor protection proceedings in Canada, and its South African subsidiaries have sought creditor protection in South Africa with respect to its Burnstone mine operations.
Rodeo Creek’s Nevada operations include the Hollister gold mine located in the north-eastern part of the Carlin Trend, approximately 80 km from Elko, Nevada, USA, and its Esmeralda property located near the Nevada-California border 467 km southwest of Hollister. The companies expected no interruptions in day-to-day business and remained focused on continuing trial mining operations at the Hollister mine and related ore milling at Esmeralda.
Rodeo Creek and its affiliates will seek to auction their assets and operations including the Hollister mine and the Esmeralda mill as a going concern, while stabilizing the operations and maintaining employment and current benefits programs. To ensure continued access to funds sufficient to maintain operations and pay vendors, the filing allows the company to seek court approval for a $9 million Debtor-in-Possession facility. The companies believe this facility will allow operations to continue during the Chapter 11 proceeding, with funds sufficient to pay vendors and employees in the ordinary course of business.