July 03, Minesite.com: The third of our trio is Glass Earth Gold from New Zealand which was hit even harder than most in the fall-out during the second half of the year because its major shareholder, Canadian-listed St Andrews Goldfields , sold out. It sold its first batch of shares in April 2008 which brought its holding down to 30.5 per cent and more followed. Another parcel of shares was given by St Andrews in payment for a debt and the recipient could not get on the telephone quick enough to his stockbroker to sell them. The result was that the shares fell in an almost straight linefrom C13`cents to C2 cents and though there has been a bit of recovery to C4 cents, chief executive Simon Henderson is certainly not happy to do a placing at this level.
Instead he is going to generate cash flow in short order from alluvial gold and hard rock gold targets in the Otago region of the South Island where his company has a massive land position. The seven million ounce Macraes gold mine operated by OceanaGold Corporation is on the eastern side of the Otago mesothermal gold district. It has produced two million ounces of gold in its lifetime and exploits gold mineralization without quartz veins in a ductile –brittle shear zone. Simon Henderson describes the terrain on the property controlled by Glass Earth, which adjoins Macraes, as ridgey – the ridges are where the hard rock mineralisation outcrops, while the valleys contain alluvials. The secret is that Glass Earth has a 50:50 deal with Bob Kilgour, a veteran of 30 years alluvial mining in the region. Bob has all the equipment and Glass Earth has a mass of geological data and technical know-how. Together they make a good team.
Glass Earth has a history of operating at the cutting edge of exploration technology, hence its name, and as far back as 2005 it conducted the largest airborne geophysics campaign ever undertaken in New Zealand. Its expertise is in understanding the 3D nature of ore-forming systems. The location of placer or alluvial gold is a rather different matter, but about eight million ounces are said to have been recovered in the Otago region over time, and geologists from Glass Earth have identified that the vectors to the main mineralising structures, recognised to host significant hard rock, lie directly under placer gold deposits. In other words the gold has not moved far from its primary position. Simon Henderson has picked the McAdie prospect as an initial target following the completion of 175 shallow RC holes in the Ida Valley region. Bulk testing will start as soon as water and land use permits are in place and production could commence in October.
Other work in the Otago region has highlighted that Macraes-style low angle shear related mineralisation is often overprinted by small multiple high grade quartz veins which host coarse gold. These shallow oxide ore systems are proving to be amenable to the mining and recovery methods used in placer mining. All that is needed is a mobile crushing and separation plant. If the vein quartz shows a recalcitrance in releasing the coarse gold Simon says “you just bring in a crushing contractor and take it down a size or two”. This is gold mining as it used to be in the old days and there is nothing wrong in that. Two initial targets – Ophir and Sparrowhawk – have been identified and tests on both show that they are amenable to gravity separation. There are plenty of others which need further testing, but this simple style of hard rock mining is expected to start before the end of the year.
In the meantime on the North Island the expertise of the company is being put to good use in a joint venture with Newmont Mining around the Martha gold mine which produces around 150,000 ounces of gold per year. The most advanced prospect is Goldwyn on the Hauraki project 16 kilometre north of Martha, and here a high level epithermal gold system is the target. Already a two kilometer long soil anomaly has been identified and drilling is in progress. Epithermal gold systems similar to Martha are the targets, and another has been identified at Wharekiriponga which lies between Goldwyn and Martha. Drill testing is planned once the programme at Goldwyn has been completed. The historic Muirs Reef gold deposit some 60 kilometres to the south of Martha is also being explored around the old workings. It also has similarities to Martha as a complex epithermal alteration system.
The ultimate object of Glass Earth is to discover a large hard rock gold deposit, but the company only has around C$1.4 million in the bank. If gold production from placer deposits and from the shallow oxide ore systems at Otago proves viable the cash flow will be used to accelerate exploration. At least Glass Earth avoids any signficant capital expenditure through its joint venture there, so it could be onto a modest winner.
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