AXG - Antipodes Gold [formerly GEL - Glass Earth]

[elZorro]

FB, the geologists were gone at the end of Q1 by the look of it. The punt from then was that the placer would make money. When it didn't, they had few choices left. The operation will look more like NTL by next month. Retreating to an office in Wellington I'd say. After all, most junior explorers have this setup, and it's a big step up to employ 50 staff as GEL tried to do. If they started with even $2mill spare, it doesn't take long to chew that out if the placer is unprofitable. Remember the two GEL dump trucks? They were 25 tonne older units.

Skevington Contractors has at least 4 proper trucks, Caterpillar D400 36-40 tonne units, from their website. These would be worth over $100,000 each.

I really hope Skevington make a go of it, and prove that you really need to stick to your knitting in the business world. GEL management has shown shareholders that they don't have much idea on how to run a placer operation. They might be better at exploration, although it has to be said they haven't had much luck yet.

Placer operations have been started up all around the South Island, because the gold price is still higher than it has been for 10-20 years or so. They haven't all been successful, but GEL has made a quick mess of Drybread. Shareholder money has gone on wages and repair costs for equipment, fuel, leases, rentals, paying for overpriced gear, you name it.

Despite saying in the Q1 report that the CEO and CFO were getting pay cuts, nothing noticeable happened by the time the Q2 report came out. They're not massive salaries, but they didn't drop much, that's for sure. I suspect that pay cuts weren't suggested by either of these gentlemen, someone else wanted that done, and any bridging finance will probably come from the same source, the major shareholder Geoff Loudon. Mr Loudon was not a buyer in the last PP. It wasn't long after the PP event in 2012/2013 that Brent Cook dropped his support for the company as well.

I don't think it's a question of whether there will be a consolidation in the shares, it's a matter of how severe it will be this time. There's an extraordinary general meeting in Vancouver in early October.

[Flugenbear]

I agree with your thoughts here ElZ.
I have been particularly gutted with the placer mining, and the fact they made such a mess of it. Even right at the start when the gold price was good they still managed to lose a bunch of cash. I don't know why, but I suspect you are right and incompetence has played a large role.
I had gambled a bit that it was at least going to make a bit of cash, but in the end it has been quite the opposite.
All n all, very disappointing.
Lets see if they can stay afloat to get any benefit out of WKP and Neavesville....

[elZorro]

FB - they'll be able to stay afloat, but it will be at the cost of shareholders being diluted again. Via Sharechat, an ODT article that sheds more light after talking with Simon Henderson.

http://www.odt.co.nz/news/business/2...ts-otago-sites

[elZorro]

GEL has dropped permits 53180 and Mining Permit 52018 (their first placer mine) in late August. More to follow - all of the South Island permits that they haven't sold as part of the deals.

[elZorro]

It looks like Newmont's Waihi operations traded at a loss in 2012, and here is some data from NZResources that could have an impact on GEL. The exploration team has been cut back a bit, while the focus is on Correnso, their new mine.

Newmont Waihi says it must compete for funds

Ross Louthean — 9 September 2013
To develop the next mine for longevity Newmont Waihi Gold has told the Waihi community that, being part of the Newmont Mining Corporation global gold business, it must ensure the new Correnso mine project will perform.

Because of mine developments, mill maintenance and repair work, the company has produced very little gold and silver in recent times.
“Our parent company (in Denver) paid our bills. Now, as we refine our plans for Correnso, this proposal must compete for funding capital with a range of projects in the Newmont portfolio and also pay back our 2012 loans,” the company said in its latest Waihi community newsletter.

"The most effective way of performing well will be identifying site-wide efficiencies that will assist in maintaining our margin and profitability."

At last month’s AusIMM NZ Minerals Conference in Nelson, Newmont Waihi Gold general manager Glen Grindlay said that mine development and limitations to milling operations resulted in the NZ operations being one of the highest cost in Newmont Waihi’s operations in five continents.
The newsletter said: “It’s not the gold price that is important, it’s the margin between the total cost of production in Waihi and what we receive for the gold we have produced.
“In simple supply terms, the gold mining business is all about finding ore bearing deposits, determining how much ore we can access, and extracting it in a timely manner to ensure a continuous ‘pipeline’ of ore to the mill.”

Operations at Waihi began in 1987, with only a short break in production of a few months over that time. However, the company said, the gold mining business, just like any business, is not simple.

“If you grow pumpkins for 80c and sell them for a dollar you will have a viable business. But if it costs you a dollar to grow your pumpkins and you still sell them for a dollar it doesn’t matter how many pumpkins you grow and sell, you will not have a profitable business.
“It is the margin between input costs and the price you get for your product that is important.”
Newmont Waihi Gold said "if the gold price drops we must look at our business and identify efficiencies we can make to preserve our margin. Other similar operations around the world are in the same situation."

Mines have been reducing staff, some operations have been closed, and many new projects deferred.
There have been some major staffing and exploration cutbacks in the global gold mining business since the gold price slide several months ago and Newmont Mining has made cuts around the world, and others who have made severe cutbacks, like Barrick Gold who has sold some of its significant gold mines in Western Australia.

Newmont Waihi Gold has cut some of its exploration team as it has slowed down its exploration activity, and also shed a few other jobs.

[Manda]

Just to note central otago has had it's best winter in years . No hoar frosts, hardly even a Jack Frost. There was a couple weeks of rain a little bit of snow that didnt last, but all n all a very mild winter. Miners in central have never stopped mining through winter or wet months they just plan ahead a get through it just fine. So the whether excuse can certainly not be a factor at all in there downfall.

[elZorro]

Hi there Manda, certainly the shares are fairly cheap at the moment. Still no bailout cash in sight. Glass Earth has just let go a 6100 Hectare EP called Moeraki, near and above Macraes. They only had it granted a few months ago. More crazy planning, part of the exodus from the South Island showing itself.

[elZorro]

The last share consolidation was a 1 for 5. This time it's a 1 for 10. Desperate stuff. It is needed to ensure the shareprice stays well above the minimum for TSX fundraising.

http://www.glassearthgold.com/s/News...eportID=602231

Note there is now no mention of any of the S.I. placer mining or permits. The focus now has to be on areas near Newmont in Waihi. I think this policy is partly at the suggestion of someone on the board. But it's also a financial imperative.

It's a real shame the company didn't get lucky on any of the CVR or Otago permits. Some they have dropped, will no doubt be explored by others, and maybe someone else will get the rewards.

[elZorro]

From NZResources: nothing new added here except the comment from the firm that helped with the IPO. 48c down to 2c in a short while, that is spectacular, no?

Again the proof reading from a NZ journalist missed the wrong word being used (it's principal). This share consolidation has to put the price above C15c so funds can be raised. Already the market has pulled it down to that figure on the TSX. They are all playing the game.

Share consolidation planned by Glass Earth

Simon Hartley — 11 September 2013
New Zealand gold explorer Glass Earth Gold Ltd (TSX-V & NZAX: GEL) is looking to consolidate its number of shares on issue, in a swap of 10 old shares for one new share.
The proposal would see the present number of ordinary shares on issue change from 105.66 million to 10.56 M.
Craigs Investment Partners broker Peter McIntyre said Glass Earth's numerous capital raisings over the years had diluted its share value, with the price “languishing” around 1c-2c.
By consolidating the number of shares on issue, the price could potentially rise to double figures and may be more attractive to some investors.
From a year-high of 48c last October, Glass Earth's shares had steadily declined to trade around 2c yesterday, following the announcement.
Glass Earth had raised and spent about $40 M - generally from the Toronto Stock Exchange - during the past almost eight years, to explore for gold, on both the North and South islands.
A fortnight ago Glass Earth pulled out of its Otago operations, having sold its boutique alluvial gold operations around the wider Maniototo for $1.75 M, and is concentrating exploration targets in the Hauraki region of the central North Island, including with joint venture partners.
The share consolidation proposal must be passed by shareholders at a special general meeting on October 4, and also by the TSX, which is its principle listing.
*Simon Hartley is senior business reporter and assistant chief reporter for the Otago Daily Times.

[elZorro]

Incorrect information from me in the above post. The latest minimum price for additional shares issue is C5c. IPOs have a higher price of C10c.

http://www.lexology.com/library/deta...5-9aca5f6f3d7f

This means that the TSX price could be C0.5c for a GEL share before consolidation, and 5c afterwards, and still just meet the criteria. But it's normal for there to be a fair bit of movement downwards just after consolidation, while the bookbuilding is done. So a lowest price before consolidation of about C1c seems likely. Of course this values all of Glass Earth at just C$1.055 million. To get in just another C$2mill to the coffers will require heavy dilution at that valuation.

Heavy sales of GEL shares on the TSX last night, at C1.5c.