Article from todays ODT:
http://www.odt.co.nz/news/business/2...covering-costs
Printable View
Article from todays ODT:
http://www.odt.co.nz/news/business/2...covering-costs
Yes, thanks SSB, not much new there, except the caption: which is technically wrong. It would appear that the placer work is doing a lot better than covering costs of gold recovery. It's also paying for G&A costs (Admin) and some exploration, if it keeps on trend. This would be after paying installments to Bob Kilgour, wages and repairs on the gear, and landowners royalties. I'll certainly be looking hard at the placer costs versus income, if they are split out.
The GEL price has dropped abruptly today, in a catchup with the TSX price I guess. I cannot explain the volume and drop over there, but there is a possibility some overseas holders have seen the presentation now placed on the GEL website, and have assumed a private placement is forthcoming. Maybe not though.
Brent Cook has brought investors into the share as well. Back a month or three, Brent Cook was live on BTV and said it was a real possibility (or a sensible outcome) that Glass Earth would be bought out by Newmont at some stage. This would have to be one of the reasons why the Neavesville project has been proposed. Let's face it, GEL appears to have a lot of other things going on, for a small company with limited cashflow in the past. They added a new prospect (not a cheap one to maintain in future) under the nose of Newmont, for a reason.
Perhaps the time payment setup for the new project is a way of stalling the need for new capital, in the hope that placer gold can fund a big chunk of it.
so much activity today!
thought i'd take advantage of the price drop myself and increase my holding a few thoasand more :) and drop my average purchase price
Once they release the quarterly report i think the price is going to rally somewhat, absolute bargain at the moment in my opinion! 70oz a week they should be clearing at least 100,000USD a week currently and now its an established placer it should be able to icnrease further than that as we come into the summer months and conditions down south improve.
I hope there is no takeover for GEL in the near future, I'm really looking forward to seeing what this could turn into
Nice Yankiwi,
I just noticed that the next ask price is 39c(29 now), so depending on the TSX overnight there could be a massive jump tomorrow.
Update: Today's not the day - TSX down 2.86% - Not bad though.
Yankiwi's patience pays off again, fair enough. At least none of us can say the share is illiquid at the moment. My attention is on the placer, because this is an area that GEL could use to maximum advantage during difficult financing periods. I wonder if they'll think about running longer hours, and with more machines. Here's a bit about how placer and gold is formed, from a point of view of finding nuggets.
http://www.nuggetshooter.com/article...formation.html
Drybread only has fine gold placer, which implies that the hardrock deposit it came from was in wider veins, rather than shorter and smaller, distributed ones.
GEL could fit what's been publicised about the RAM 'portfolio' - do you suppose this is the receivers dumping it to fund the process?
Come on GEL, what are you up to?
...it's the end of the month.
you were right Yan
Revenues from placer mining operations increased significantly for the quarter to $1,079,000 (June quarter: $349,000). Gold production in September and October was considerably higher than for the winter period with the December quarter expected to increase further.
The Company had a net loss for the three months ending September 30, 2012 of $456,000 vs $670,000 for the similar period in 2011.
Three months ended Nine months ended Notes September 30, September 30, 2012
$''s2011
$''s2012
$''s2011
$''sRevenue 1,079,000 180,000 1,595,000 607,000 Cost of revenue (1,360,000 ) (114,000 ) (2,408,000 ) (352,000 ) Gross (Loss)/Profit (281,000 ) 66,000 (813,000 ) 255,000 1 Administrative expenses (122,000 ) (334,000 ) (821,000 ) (769,000 ) 2 Salaries (net of exploration costs) (65,000 ) (69,000 ) (190,000 ) (183,000 ) Finance income 12,000 (6,000 ) 18,000 31,000 Non-cash items Stock based compensation - - (556,000 ) - Write down of mineral properties - (327,000 ) (6,590,000 ) (327,000 ) Loss before & after Income Taxes (456,000 ) (670,000 ) (8,952,000 ) (993,000 )
Gonzo, Yankiwi, you were both right, the quarterly report was technically out before the end of the month.
http://www.marketwire.com/press-rele...el-1732154.htm
This link doesn't include the MD&A report, which will become available on SEDAR first I'd guess. As indicated in the latest background pdf posted in the GEL website, gold production has increased significantly. The icy winters in Otago naturally limited output over those three months, the bigger GRU#1 took a fair while to get going properly, and there must have been a lot of setup costs, which the report says were expensed in the quarter. So this is a different treatment from exploration of permits, where the cost is only expensed once the permit has been surrendered.
The gold production was worth over C$1mill, but cost about another $300,000 of cashflow on top of that, in the quarter. That's probably a really good result, all things considered. I'll wait for the MD&A data.
Quote:
Revenues from mining operations increased significantly for the quarter to $1,079,000 (June quarter: $349,000) but was less than budgeted due to the extended commissioning of the GRU#1 plant and lower 'wash' grades for both sites. Mining and processing costs were higher during this settling down process which coincided with 2 of the 3 months of winter in the South Island. Gold production in September and October was considerably higher than the winter period and the December quarter is expected to increase further.
This quarterly report was preceded by another press release - there is another Private Placement happening at the moment. The buy-in is at C16c, with future 1 for 1 warrants at C25c. The aim is to raise C$3mill for Neavesville and WKP exploration work. This should all be completed by December 6th.Quote:
All commissioning costs have been written off as incurred. The increased production in September - November has resulted in a turnaround to monthly profits. Attention will now focus on costs reduction, which combined with a move to higher grade areas for both sites, should see a marked improvement in cash generation and profitability.
It's not immediately good news for current GEL shareholders, but I've followed the story of this company for a few years. Now a fairly useful employer in NZ, has trained and offered employment to geologists, ramping up gold production with its own assets, has big interests in two or three promising mine sites near Newmont's Waihi mine - we could all be looking at a great opportunity for capital gain from this point.
It's good to see the big increase in revenue! But the costs are certainly weighing them down.
So in relation to the PP, if the SP goes below C$0.16, then there wouldn't be an advantage to buying the PP shares, right?
I'm not sure I understand, I thought the PP would be at a bit more of a discount to entice buyers...
Or, is the benefit that if the SP goes above C$0.45, the PP buyers can still exercise their purchase warrant to buy what they are entitled to at C$0.25?
Yes Gonzo, the market might take the price of GEL below C16c equiv for a short while, but it won't go very far below that. The warrants could be extremely valuable later, and 1 for 1 is GEL's normal deal, but this is generous compared to other similar companies looking for cash on the TSX. The PP price must have been a compromise, based on what indications were from big investors recently, combined with feedback from current investors. This is a big dilution effect, the Mcap could be in theory held at C$16mill for a while, does that sound cheap for a company with permit assets and an unusual cashflow from placer mining?
Going forward, I'd like to see massive short-term effort in the promising placer business section, as a few million spare cashflow each year will halt the dilution, and give the company time to arrange more structured capital raisings for the longer term important exploration work, if needed.
yeh i agree with ez, if your looking for something long term (lets face it, thats what GEL is) its a very good PP offer. Think of it logically, this is the first time in the companies history where it is generating a fairly decent income and with time the costs of generating that income will reduce once procedures are put in place and the funding required to start this measure isnt listed anymore.
Also im hoping something is going to eventuate from WKP within the next 24 months, all the signs are there its just a waiting game now. But thats just my opinion, I'm a young investor and GEL was one of my first purchases so i think i may be a little attached :p
I haven't been investing in shares for that long either, Bucko. Certainly this company keeps me interested, always something going on. What little I know about private placements could be written on a postage stamp, but it appears there is no minimum subscription amount, and as there is no prospectus and you're buying new shares, there is some kind of a qualification form to fill out. I would expect McDouall Stuart to be able to supply further details, as they handled the IPO.