AXG - Antipodes Gold [formerly GEL - Glass Earth]

[elZorro]

This article worth keeping in mind as GEL plumbs new lows.

http://www.stuff.co.nz/waikato-times...-most-of-Waihi

[clifton]

Waihi the town was built when Martha Mine was an underground operation over a hundred years ago. While the amount of gold taken out was large - bonanza grades etc the volume of rock taken out was small. From the lookout over the recent opencast pit you can see some of the old drives in the pit wall - tiny in comparison to the opencast operation. Other mining towns from that era are the same, Thames, Huntly towns built on top of valuable deposits.

[elZorro]

Yes, thanks for that Clifton. Newmont could carefully take more bonanza gold from under the town, the rock is super solid, as long as they backfill.

I have updated the GEL capital spending spreadsheet, a bit of torture for those of us who invested. Watch the MCap vainly trying to keep up with capital paid in, all fine for a few years after GFC, Brent Cook pushing the price up (BIG SELL signal) and then GEL making a complete hash of their placer operations, underfunded and beating a drawn-out retreat, leaving the MCap and the shareprice at an all-time low. A lesson in how not to do it, or at least that's what it looks like at the moment.

[elZorro]

I had a call yesterday, from one of GEL's current staff members. This was much appreciated, and I was filled in on how the senior staff felt about the placer operations.

Maybe the price paid for the gear was a bit high, which put the company on the back foot when it came to funds for capital equipment if needed. At that point they still had to pay the monthly capital instalments to Bob Kilgour, the gold price had backed down, the weather had turned wet, and they were still looking for elusive higher grades.

I previously posted some maths on the gold value in a dump truck heading away from the wash area: just $200 if the actual grade is 0.4g/m3. This is a lean operation, not much room for error when you're carting the wash. The caller had been involved in gold panning the wash to demarcate it, and in general they had good staff on the wash digger, although some had to be trained up. Keeping an eye on the feed rate into the GRU was an even more important operation.

Every placer area has unique characteristics which cannot all be found out beforehand, you have to get in there and run the gear apparently. In the end GEL used some older equipment plus some leased gear, and were able to extract 95% of the gold in the wash layer, when other operators had only achieved 30% in the past, and given up. The caller was in general very proud of the teams working in the placer operations.

If Glass Earth had been able to bring more capital to bear, had planned the operation over several years beforehand, and been able to operate a floating GRU as at Earnscleugh, the result would have been quite different. Already Skevington Contracting (SCL) has turned up at Drybread with a brand new Volvo excavator worth over $500,000. SCL has a requirement to resurface all of the Glass Earth workings on the 3-4 farms as the operation proceeds, and this was built into their buy price. So there will be no loose ends for Glass Earth shareholders to worry about.

I'm very pleased about that, as I can see that the operation GEL started will continue to employ staff - maybe fewer - but some. The affected farmers will be able to continue their operations with an extra income and new pastures being established behind the mining strips. I think one farmer at least has already arranged for a massive dam to be constructed (mostly completed by GEL paid staff), which will help in the normal shortage of summer water for the farm. Bob Kilgour will be paid out in full I assume.

I said to the caller that I still think the placer operation was worth a punt, it could have worked out very well with a bit more luck. Anyone tapping data into a spreadsheet will see that it all depends on the grades (and the gold price). It sounds like the grades just stayed a bit on the average side, when the wash had to be carried to the GRUs.

I mentioned the Neavesville permit and the 850oz payment due soon. This is being discussed with Eurasian with a view to it being delayed, so in line with the heavy retrenchment of staff at Glass Earth, there might not be much capital outlay required in the next few months after all.

WKP was discussed too. It is still the jewel in GEL's crown, but on an international scale and with Newmont losing money in NZ and elsewhere, it is proving to be difficult to get extra enthusiasm from Newmont's heavily reduced geologist team at Waihi at the moment. Infill drilling at WKP would of course soon add to the NI 43-101 grading of the resource. GEL are thinking about all of their options here.

These points are all relevant to the current price of GEL shares. Does the MCap of Glass Earth deserve to be flattened to just over C$1.5mill, or is there reasonable expectation that the share will recover like it did after the GFC in late 2008?

[elZorro]

In the post today, I received the notice of the Special General Meeting. This is also available to read on SEDAR, dated 11th Sept. They are asking shareholders to approve the 1-for-10 consolidation. There isn't much option for that, if more cash is to be raised on the TSX-V.

What I found interesting was that the proxyholder is to be Adrian Fleming, one of the newer directors, and not Simon Henderson (or Justin Cochrane) as was used for the May meeting in Vancouver.

Woolwich Intl Holdings is listed as holding just under 12% shares, the only one over the 10% ceiling. Auriferous Mining may still hold in the region of 8% though, which is about 20% of the company combined. Adrian Fleming is the CEO of Prosperity Gold (PPG on the TSX-V, not doing so good on paper) and has strong NZ connections. He has done well with previous exploration companies, and may be in a position to take a capital punt on GEL at this point. He is one of the directors who wants a very tight focus on the exploration work apparently.

This is all conjecture on my part, but perhaps we are looking at some fundamental changes being cemented in at Glass Earth soon.

Already the Glass Earth website is being expunged of references to placer mining, the SI and CVR permits, there are now just two projects: WKP and Neavesville. http://www.glassearthgold.com/s/Proj...eportID=450302

[Manda]

Your post was very interesting. I do find it odd how a senior staff member could tell you so much about the mine and how they felt as none of them were with glass earth and Dunstan mining when the operations first got going , when they mined with lower grades , lower gold price. Mined through 3 seasons of snow, hoar frosts , rain and drought. And still managed to buy 3 new excavators , build another plant, hire more people , maintain plant and equipment and still make a profit. I have to point out glass earth had never mined, they had to learn through experienced Dunstan mining people, when they brought Dunstan mining out they had very few experienced workers and decided to mine there own way without taking advice from experienced miners who had been mining in central otago for over 40 years. This along with many other very poor decisions was there downfall , not the whether, not the grade and not the gold price. As it was proved it can be done through all of these elements.

[elZorro]

Hello Manda, all the Glass Earth shareholders saw in the books from the earlier mining was a slender profit, but then again the company hadn't invested that much in the 50% JV. You're right of course, it was after the bigger money was invested, and GEL ran the 100% owned operations in a more managed business setup, that things started to go haywire. Shareholders were not told the true extent of the problems, I'm sure. If we were told, it was months after the events. There is probably a small book that could be written about the goings on down there, I'd like to read it. GEL policy appears to be to keep small shareholders in the dark, because otherwise it's hard to justify the net loss of millions of shareholder dollars being announced, so soon after the market was being led to believe that the operations were moving into strong-looking profits.

I refer back to the comprehensive market disclosure document on the GEL website. That has not been observed for major negative events in the company lifecycle. At the press of a button, all main references on the GEL website to placer work and Otago/Muirs operations has been removed. It never happened, the company and the existing and prospective shareholders will not need to look over that again, that is the position the company is taking. The MCap chart tells the story, maybe not a unique one. Funds go into GEL, and they don't tend to come back out as saleable shares.

[elZorro]

At the risk of giving GEL oxygen, I note that Duncan Hardie, Wellington, has applied for a prospecting permit of over 9500Ha, the newly incorporated company being called Garibaldi Gold Ltd.

Glass Earth is trading lightly at C1c on the TSX-V.
As you were..

[elZorro]

There is nothing on the web explaining to the market what happened on the 4th October, the special meeting of the board held in Vancouver.

NZPAM is really the only source of information on GEL at the moment.

Permit 40813, Glamorgan, has been reduced in size. It's above the WKP area, and adjacent. But a request to increase the size of the same permit has been lodged, its application number is 55241.

Minnow PGI (whatever happened to those JVs lads?) has asked for a 2 year extension on prospecting permit 53402. Goldmines NZ Ltd (Bob Kilgour) is looking around down in Southland.

And some kind of a deal has been struck regarding the JV permits near Ophir.
Ophir Gold now has 100% of two GEL permits, 40702 and 40870. Maybe now some mining work will be done on that area, but of course GEL shareholders won't see any benefit.

GEL shareholder money has been gifted across to Ophir Gold interests, in terms of the joint exploration work, the costs to hold the permits, the planning for small-scale mining at Ophir, the money paid for other S.I. permits owned by Bob Kilgour that were reasonably quickly let go, and the (probably overvalued) mining equipment and valuation on JV placer permits.

In hindsight, I think Bob Kilgour had the measure of Simon Henderson. The only issue I have with that, is that Simon was using company shareholder money, not his own.

[elZorro]

Surely a coincidence, a press release is out today explaining that the share consolidation was approved at the 1 for 10 rate, yet to be approved by the TSX. The notice also mentions WKP as the main focus, and the Neavesville wording regarding the "Maori population" makes me think that the statement was written by someone outside NZ. Still, Simon Henderson shows at the bottom of the document as President and CEO.


http://www.reuters.com/article/2013/...d9+MKW20131017

According to my spreadsheet, GEL has 17 permits left current with NZPAM, a total of 274,147Ha, but 82% of that space is used by the Kakanui prospecting permit up above Macraes. It costs up to $175,000 a year to keep those permits. Drybread is still held by Glass Earth, but I'd assume it'll be transferred to SCL (a private company) in time.