AXG - Antipodes Gold [formerly GEL - Glass Earth]

[elZorro]

Looks like GEL's Simon Henderson is presenting a 15 min report on recycled placer deposits at AUSIMM in Nelson this week.

http://www.odt.co.nz/news/business/2...ing-conference

https://custom.cvent.com/7D44ECD4326...bf0888ecf9.pdf

[elZorro]

I predict that within 3 days we'll be able to read the Q2 report from GEL. It's a legal requirement.

In the meantime, NZPAM has made available a wide section of the CVR for mineral prospecting. This is the same area that Glass Earth made a big pitch at, and surveyed a lot of it for the first time with newer gear. As a result of this, a large area of molten lava was found in the area around Wairakei, north of Taupo. GEL drilled a few times but found nothing of great consequence. They'd have needed to be lucky, it's a big area.

http://www.nzherald.co.nz/business/n...ectid=11115354

[elZorro]

Adrian Fleming, a director of Glass Earth, also gave a speech at AUSIMM. Via NZResources.

AUSIMM 2013: Company developer says explorers need to understand boom-bust cycles

Ross Louthean — 29 August 2013
An Australian geoscientist who has helped develop mineral exploration companies in Canada, Australia and with a focus on New Zealand, said the current downturn has to be seen as just part of the boom to bust scenario.
Adrian Fleming, who developed more than one successful explorer and has a Toronto Stock Exchange junior board company, Prosperity Goldfields, said these were particularly tough time for junior companies with the TSX and its junior board home to 57% of the listed miners and explorers in the world and that the boom in 2012 saw 137 new companies listed and $C10.3 billion raised.
Globally this represented 70% of all new mining and exploration capital raised.
That was then, he said, this is now and issues such as the dive in the gold price and commodity price slumps have put the Canadian market, and other bourses, in a deep freeze.
He showed one graph where the Australian Securities Exchange has slumped badly this year but the formerly higher TSX-V junior board has gone from above to well below on the graph
In answer to a question on his presentation yesterday, he said while Toronto has been a mecca for raising capital for projects elsewhere in the world, including New Zealand. But, the market perception over there now was that the regulatory situation in NZ was seen as arduous and not attractive.
For a company to join the TSX-V it must have at least a 50% interest in a mineral property, have an exploration expenditure capacity of at least $C100,000, provide an independent report complying with Canadian bourse standards for the work programme and a public float of at least 500,000 shares, and 200 public shareholders.
To show how the mighty can fall in the current market, he showed big gold producer Goldcorp as diving with the share price slump of recent months.
Fleming said booms create busts and busts are followed by improving indices.
“The supply-demand paradigm will kick in but we can’t tell how long it will take,” he said.
Fleming raised as an example Newmont Mining Corporation which has had total sustaining production costs of $US1,417 per ounce.
“On the street in Toronto, mining is a bad word; equity market money for juniors is essentially non-existent.”
Fleming told delegates that if you are a junior explorer it is all about survival.

[elZorro]

RAM scam operator David Ross is hauled before the courts. Those who are out of pocket are looking for his secret stash.

http://www.nzherald.co.nz/business/n...ectid=11116180

It's a matter of public record that one of Ross's companies invested a small amount in GEL at the last PP (at a time when his actions were known). Unfortunately, like all of the other GEL investors found, this didn't turn out to result in a pot of gold.

[GBHcorp]

Today's announcement looks dire. Selling out of South Island to pay down debt. Mention of new financing requirements:

Considering the prevailing conditions, the Board of Directors has determined
that a major strategic refocus was warranted in order to safeguard the
Company's exploration assets and set the Company on the right foot for its
next phase of development. It has therefore been decided to dispose of placer
gold mining operations, refocus exploration activities on projects in the
Hauraki region, carry out significant cost-cuttings and consider new
financing opportunities.

[elZorro]

You're quick off the mark, I hadn't seen it GBHcorp. Thanks for that.

http://web.tmxmoney.com/article.php?...&qm_symbol=GEL

I have a strong suspicion that this has been brewing for weeks, but I have only recently joined the dots.

I think sometime in June the Alexandra offices and workshop were up for lease, with GEL still working from them. Today might be a handover day.

SEDAR has the latest full Q2 report, and a full MD&A report. Mandatory reading.

Subsequent Events Placer Operations



The Company's placer mining operations in central Otago are planned to be
sold pursuant to two Sale & Purchase agreements dated 29th August 2013.
The agreement is subject to TSX approval and formal settlement would take
place upon approval being granted.
That sale, together with two smaller sales of placer mineral permits, will
generate approximately $1.5m, payable in cash. Receipts from the sale of the
assets will be used to retire debt and trade payables.
The remaining placer mineral permits will be sold or relinquished in the near
term. This will conclude the Company’s involvement in placer activities.

Corporate Refinancing
The Company is also seeking funding for its continuing hard-rock activities at
WKP and Neavesville (Hauraki Region of the North Island). Advised
investor interest in a refinancing should provide funding to allow the
Company to progress those activities for an interim period.

Staffing
With a two project focus, a lean and resilient GEG will continue strong
austerity measures having reduced to core staff, while retaining key technical
and management ability to oversee GEG’s assets.

[Flugenbear]

I think GEL will hang in there. It's hard to know how long the anti gold sentiment will hang around. But it will eventually change, that is a certainty. Will GEL be around to see that change is obviously less certain, but I think there is enough investor interest there to keep it going purely on the basis of WKP.
All though the announcement is dire, I think it a good thing they are going so lean in terms of surviving this phase. I was actually surprised they didn't suspend placer activity before winter given the market sentiment. I guess it was worth a try. Ironically the last week or so the gold price is the highest and USD/NZD most favourable for the entire period....but that can always change again in a hurry.
All GEL supporters hang in there, they'll get through this.....though I won't eat my hat if I'm wrong.
What do you think ElZ?

[Flugenbear]

Yep, certainly a good question Yankiw....

[elZorro]

I have not had time to check through the full reports on SEDAR. Normally within a few days, the full reports will be placed on GEL's website.

What I have noticed so far though:

Massive writeoffs for S.I. permits, Garibaldi dropped, the big Kakanui dropped, Ophir permit perhaps sold to Bob Kilgour in lieu of part payment for placer gear. The entire placer gear sold off with its permits for about 1/3 of what they paid for it. The ancilliary permits were never worth much.

Muirs written off and all the data etc handed over to NZPAM and the landowner. I think they were trying to sell it, but no offers.

GEL has been outflanked down in the S.I. in particular. They paid too much for the placer gear, they got into hock over it, then they tried to run it as a managed business, and there wasn't enough profit in it. They have dug some huge holes in the farmland down there. I wonder if any of the landowners have an agreement with the permit holder for restoration of their ground after mining. No mention of this liability. Maybe the new owner has to sort that out.

It seems to me that GEL management couldn't keep good control over the placer. There were undoubtedly good people who had experience with that equipment, but I'd guess others who were roped in because they were handy. Simple mistakes could cost a lot in maintenance. Most of the gear was old and needed to be treated sensibly. With such low grades I wonder if throughput at all costs just overloaded the system. They mentioned poor grade control at one stage. With each truck only holding about $200 of gold at best from the wash, they'd have needed to put good people on that job. Did they?

Wading in with shareholders money, GEL took some proven and unproven gear onto some placer sites with the aim of making at least $2mill clear each year, but instead managed to lose about $4mill or more. By catching themselves short, now they also have to write off more millions in exploration costs in the same financial year.

They need at least another $2mill before Christmas to dig themselves out, and hold Neavesville. 850oz gold or equivalent. That deal doesn't sound so hot now.

They can't raise money on the TSX with shares below a certain price. So there might be another consolidation. Prepare for more dilution. Who is calling the shots now, and who can gain control over a fair portion of the company for just two million?

Retail shareholders have been operating in a vacuum with this company, in between the quarterly reports. When you consider that the Alexandra premises were up for lease in June, it appears that payments to Bob Kilgour were in arrears, maintenance costs were very high and the site was submerged with water etc. We know all about this today, weeks later. I should just like to point out to any GEL management people that here is the disclosure agreement from their own website.

http://www.glassearthgold.com/i/pdf/...URE_POLICY.pdf

I suggest they read it, digest it, vow to abide by the rules, or this company should be delisted forthwith. There are at least eight very good reasons why we should have heard about what was going on, a long time ago. What kind of a board allowed this state of affairs?

[Flugenbear]

It's going to be all about survival for the foreseeable future. Forget about drilling/exploration work for now, IMO. How lean can they go?
There may be a few investors already with enough invested to stump up some more cash to get them through this until sentiment changes....
Don't write those shares of just yet Yankiwi.
Either way, it is an ugly picture.