A bit of background on Earnscleugh, from 2009. GRU#1 was leased by L&M to prove the site, and from memory it had to be tidied up a bit more, so it should be in good working order now. Note that L&M kept the permit for the area alive, until gold prices recovered. Total area of 150Ha is 1.5million square metres, the alluvial gold gravel thickness is purported to be seven metres deep, a total estimated 110,000oz in that space. 10.5 million cubic metres of gravel, weight about 1.5 tonne per cube, yielding perhaps 110,000 oz, is a grade of 110,000 x 31/(1.5 x 10.5 million), or 0.2 g/tonne grade.
That is the worst case grade, there will be better pockets of gravel probably. But this area has never been worked before, unlike Drybread. I'm thinking that Vicarage Capital might have misplaced a decimal point in their earlier alluvial grade. Maybe it's 0.3 g/tonne. Placer gold is much easier to process than the Coromandel gold, so it's still possible to make a profit at these grades.
Here's a background on Galena, if this is the outfit with a block of shares in GEL, they won't be there forever, according to their charter.
But they did do very well in 2009.
Great short background on L&M Mining in this article from NZResources.
Earnscleugh gold project to move to two shifts
Ross Louthean — 3 February 2012
The privately owned alluvial gold project at Earnscleugh in Central Otago will move to a two shifts a day operation within the next few weeks as more kinks are being ironed out with the gold plant.
The operation, near Alexandra, has been established by the L&M Mining, part of the L&M Group, initially using an hired smaller gold plant before revamping one of its mothballed plants that had been gathering moss at Waikaka.
L&M’s chairman Geoff Loudon told NZResources.com that it has taken some time to get the gold plant operating effectively and this has included getting adequate service for a sophisticated generator unit and new additions to the plant.
He said moving to two shifts will allow the operation to run more smoothly, advancing from treating about 150 cubic metres of terrace material per hour to more than 200 cu m/hour.
Target production for the Earnscleugh operation is building annual production to between 7,000 to 9,000 ounces of gold.
The original L&M company had a long history of alluvial gold plant and dredge mining on the South Island. Two decades ago it was mining on the Shotover River and terraces on the West Coast, under the wing of a listed vehicle that had the misfortune of being controlled by another company that went belly up takings its funds with it.
Loudon’s team acquired the company from a bank and continued gold mining until resources cut out and a major drop in the gold price created problems.
Earnscleugh was held through that drought.
Meanwhile, L&M moved into coal and coal seam gas and moved its oil and gas permits into L&M Energy Ltd (ASX & NZX: LME) and vended some of its West Coast coal permits into Bathurst Resources Ltd (ASX & NZX: BTU).
The figures show that L&M's GRU can process about 6x more gravel than GEL's GRU#1, but if it runs near non-stop at that rate, the grade at Earnscleugh would be only 0.1g/tonne, so assuming it's about 50% duty, 0.2g/tonne Au sounds about right.
Gold's up, US$ heading down..and I liked this:
Reality is the leading cause of stress
among those in touch with it.
~ Lily Tomlin
L&M Group have previous/current interests in seafloor mining. They've made a surprise move over here, obtaining a permit.
L&M Group in new Chatham Rise phosphate quest
Ross Louthean — 3 February 2012
The L&M Group which figures strongly in petroleum exploration, coal seam gas, coal and gold mining is now joining the quest for seafloor phosphate deposits on Chatham Rise.
The company has formed Chatham Phosphate Ltd which it owns 90%, with the balance held by prospect vendor and veteran geoscientist Roger Gregg. New Zealand Petroleum & Minerals has granted a permit on the rise, near the Chatham Islands and well east of Christchurch and it envelopes on three sides of the marine phosphate permit held by Chatham Rock Phosphate Ltd (NZAX: CRP).
Chairman of the L&M Group, Geoff Loudon, said there are no set plans and the future development of the company because everything is in its infancy. Later, consideration could be given to whether Chatham Phosphate remains private or looks at an IPO.
Over the years Roger Gregg was involved in studies on the Chatham phosphorites.
Comment by Chris Castle (CRP), 8th Feb:
Chatham Rock welcomes new Chatham Rise explorer
Ross Louthean — 8 February 2012
Chatham Rock Phosphate (NZAX: CRP) yesterday welcomed news that another company has been granted an exploration permit to explore seafloor rock phosphate reserves on the Chatham Rise.
As reported by NZResources.com, the L&M Group, which has a wide range of petroleum exploration and mining interests, has been granted a permit by New Zealand Petroleum & Minerals to explore seafloor phosphate deposits over a wide area to the west, south and east of the marine phosphate permit held by CRP.
L&M holds 90% of Chatham Phosphate Ltd, with the balance held by veteran geoscientist Roger Gregg.
CRP managing director Chris Castle said he was delighted another company recognised the potential of the area.
“It reinforces the enormous potential value we see in the area, which is being constantly confirmed as we gather new technical data,” Castle said.
Chatham (Phosphate) holds a large area which has more unknowns but which could have real prospectivity for both rock phosphate and glauconite. ”
Mr Castle noted Chatham chairman Geoff Loudon has had a distinguished career in the mining industry and is widely recognised as an astute investor.
“CRP has done a huge amount of work over the past couple of years that would be of benefit to Chatham. There are many potential synergies that can be achieved, particularly relating to environmental monitoring and scientific research.”
The Chatham Rise is about 450 kilometres east of Christchurch.
Keen to keep their 350 + 350 workers employed, Newmont is beavering away in Waihi, not moving too far from the Martha pit just yet.
Local opposition to disturbance might keep their sights on WKP, however, and good drill grades there will help. The future Correnso mine site grades are not easy to find, still looking. Sounds like there might be 500,000oz Au there.
Investing in shares is a bit like fishing, I realised this weekend. With fishing, you are always hoping that you’re using the right gear, at the right time, and you’re in the right location. Here’s why I think we might have hooked a big fish with Glass Earth.
I’ve noticed how every year or so, GEL needs more funds for exploration, and issues shares at a discount to the market, usually in a brokered series of tranches. The last fundraising was at CAN 55c, and was closed short of the original total that was indicated by the company. Previous capital raisings were at CAN 20c and CAN 30c, and the original IPO at CAN 20c (before the 1 for 5 condensing) valued the early shares at $1 each. But this latest set of tranches was non-brokered.
So two things have happened recently: the valuation of the company has improved following drills at WKP, and there has been more interest from well-connected investors. The latest presentation shows that there are at least four major investors holding perhaps about 40% of the company in total: Trapeze Asset Management (13%?) Woolwich International Holdings Ltd (Over 10%) Sprott Asset Management (Unknown%) Auriferous Mining Limited (Unknown%)
Trapeze Asset Management is the investment advisory firm partly owned and chaired by Herbert Abramson, who has connections to St Andrews Gold, the original major investor in Glass Earth.
Sprott Asset Management is a much larger funds firm with various gold interests worldwide, so it’s hardly surprising to see them on the major shareholder list.
Auriferous Mining Limited (AML) is a private investment vehicle set up in the British Virgin Islands. It has equal third shareholdings - Campania Holding Inc 1/3 (controlled from Wong Lam Leung & Kwok CPA Ltd, accountants’ office in Hong Kong) Tangent International Ltd 1/3 (connected to Dr. Werner Muller, Swiss Geologist) Archibald Geoffrey Loudon 1/3 (Chairman of L&M Group and Nautilus). Geoff Loudon and Campania Holding were also founder investors in the private firm Peru Copper Inc, holding about 6% of the shares each, in 2006. This explorer was sold to Aluminium Corp of China (Chinalco), and Geoff Loudon remains as an advisor.
AML are also major shareholders in L&M’s spun-off Energy division, LME (listed on NZX and ASX). This now includes L&M Group’s coal seam gas assets. Total holding assuming all options are taken up by AML, is 84% of LME. LME has looked fairly sick chart-wise for the last few months, but they have a few promising areas of energy exploration themselves, and their IPO was only in 2007. Based on the current low price, Mr. Loudon’s share of LME is worth $13million, but it has been nearly 3x higher in the last year.
AML also own all of the private L&M Group assets, including L&M Mining. This is the firm that leased GEL’s GRU#1 for Earnscleugh trialling (late 2009 to early 2011?), near Alexandra in Otago.
Geoff Loudon has achieved much already, including being founding CEO of Niugini Mining, which discovered the huge 30Moz Lihir Gold Mine in PNG. He was a director of Lihir Gold Ltd when it was sold to Newcrest Mining (NCM) in 2010, to create what is now a 26 Billion dollar company. Geoff Loudon sold up in London in 2010 and moved permanently to New Zealand. He has old family ties to the Hokitika Goldfields, back as far as 1875. He will receive a total of US$40mill for his 1/3rd share of L&M Coal, sold to Bathurst Resources.
All this brings me to the second largest investor in GEL, Woolwich International Holdings Ltd (WIHL). The only other mention on the internet is that WIHL is a cornerstone shareholder in PuriCore, a listed company which has purchased the rights to a non-toxic sterilising system (brand-name Sterilox). It’s just too much of a coincidence that Geoff Loudon mentions the same brand-name as one of his retirement investments in an interview for a mining magazine, which is now posted on L&M Group’s website.
Most likely, Geoffrey Loudon is behind Woolwich International Holdings, meaning that he controls the biggest cornerstone shareholding in Glass Earth, if you add in Auriferous Mining holdings. As it would appear that most of his share purchases happened from late 2009 or 2010 onwards, it’s likely that the Lihir Gold and the L&M Coal deals freed up some capital. Out of all the companies Mr Loudon has observed in the last few years, he chose Glass Earth as one to invest in.
The TSX chart for GEL shows that major investors will not let the shareprice fall below 20c or 30c, but rather than let the price drop back there and allow more of the company to be picked up at a bargain basement valuation, I think it is fair that all shareholders are aware that some big fish are getting involved. This is great news for Glass Earth, as there is a surplus of capital available from cornerstone investors, and in fact all shareholders might appreciate the chance to chip in on the next capital raising. GEL has done a lot with a tiny amount of capital, they're used to allocating funds carefully.
More great news this morning: it's now 7th February and Glass Earth management has posted a news release about ACC investing more in GEL, now having over 6% shareholding, just over 4million shares. I saw that big one going through, one buy was through Haywood Securities Inc on the TSX, 1,745,000 shares at C25c each, 26th Jan 2012. It's taken a bit too long to inform the market. Anyway GEL has gone up 18% over in Canada this morning (now CAN 35.5c), to match the NZ price of 40c. ACC bought the latest (net) parcel of shares at equiv NZ 29c, so they're doing well already. (Note the Accident Compensation Corporation of NZ (ACC) has investments totalling over $17 billion, having increased the fund by 36% in just a year, with some extra money put in, but also good returns). As GEL pays no dividends, I assume ACC is here for a long term capital gain, like me. ACC owns(on average) about 4% of the NZX domestic sharemarket. See pages 17 and 18 of this report.
Ophir gold prospect in Otago, New Zealand (Glass Earth 50%) -- Additional work is being undertaken as a pre-requisite to a formal proposal for capex and mining for the consideration of the Joint Venture.
Q2 report in August 2011 also mentioned Ophir:
Operational ActivitiesThe Company has had an active and successful quarter as described in the Quarterly Overview and Near Term Outlook below.Field operations concentrated on the testing of Glass Earth's two most advanced prospects WKP (35% Glass Earth / 65% Newmont Mining; Newmont managed) and Muirs Reef (100% Glass Earth) in the North Island. Encouraging assay results for drill holes WKP 28 and 29 were released August 26, 2011, with assay results awaited in respect of WKP 30.In addition, further metallurgical testing on the Ophir Project (50% Glass Earth/50% Ophir Gold) gave very good recoveries based on gravity separation processes. Expansion of alluvial/placer gold mining in the Central Otago region is a strong focus as current mining operations bed down.
With more capital appearing every day for GEL, maybe we'll see some real action on the site soon.CHFIR in Canada reports
GOLD PRODUCTION AT OPHIR
A step closer as very encouraging gravity met results push plant design ahead
Sounds like there is plenty of gold-bearing gravel, and a GRU about half the size of the #1 unit (or 50 tonne/hr) would be suitable for the site. A lack of water capacity for sluicing has been mentioned as one hiccup in the process. The schist boundaries are host to higher-grade gold-bearing veins, which might be a bit harder to recover, more capital needed.This is yet another permit area that has been kept alive while some others were dropped, and we're seeing some progress.Central Otago background, Drybread, Moa Creek, Ophir, St Bathans and Alexandra.Oturehua, home of the Hayes wire strainer, and other Hayes products..
Here's a map from NZPAM showing the Ophir permit areas, all under JV and quite a large area, almost over to Moa Creek.
A page out of the presentation on the bottom left of GEL's homepage, has this flow chart on Ophir. This is nothing short of a highly profitable test grade, since this isn't autoclaving or crushing, just separation by flotation and gravity. Maybe they hand picked the 80kg sample, hard to say. Late last week Simon Henderson was down in Alexandra, at the base there. If there is a decent amount of this grade available, GEL won't need any private or brokered placements to pay for a bit of drilling, and for overheads.
I emailed Simon Henderson (GEL's CEO) a week or so ago, and received a written reply from him yesterday, to some queries about the company. All the answers were in a positive vein, and things are looking good for 2012. Here is an example.
Q. Does Mr Abramson still hold shares privately or are they now distributed to Trapeze clients?
A. While he's been a staunch supporter of GEL (and has told me he'll be back), Herb Abramson has sold down much of his stock - for reasons not associated with GEL he needed to divest (and given we had underlying value compared to other holdings, the GEL stock was able to be sold), and these shares were snapped up by ACC. On the plus side, for us it's a boost having ACC as a supportive and growing shareholder, and our price isn't being held down by a big seller's overhang.
That paragraph explains most of the behaviour of the GEL shareprice on the TSX, for the last 6 months. WKP exploration and other positive news boosted the share to a sensible valuation of near C65c/ NZ80c (the IPO listed at C$1.00/NZ$1.25 equiv) but it inexplicably drifted back from there, after a capital raising at C55c. Once a big enough block of the shares were sold in a parcel the other day, you could almost hear the stock springing back.
GEL has a link to the US gold price like most goldies, but over the last 11months has drifted away from the rising gold price, due to the consistent selling up until recently. See chart below. As an aside, these charts are easier to read if you log onto Sharetrader, and how about some other posts on this thread? For example, anyone have any ideas on the direction of the gold price? Cheers.
Here is another question that had been bugging me - well answered by Simon Henderson in the email last week.
Q. Vicarage (Vicarage Capital, UK) claimed 3g/t from the placer work in Otago, then removed that from the latest file (GEL brief note Dec 2011) . What is the average yield? I would hope this type of data will be revealed to the market with the new Drybread results.
A. On to alluvials, Vicarage's quote of 3g/t is an error. In alluvial production we quote grade in grains per cubic metre, not grams per tonne. (A grain is roughly 1/15 of a gram, and there are about 2.5 tonnes of gravel wash in one cubic metre).
We'd regard a grade of 3 grains/m3 as an acceptable cutoff point for profitable mining (high volume throughput, no crushing, gravity separation and so on all mean that far lower grades than that needed in a hardrock environment can be profitable), but of course can run into far more than this on richer leads - in fact we will have on occasion run into 3"g/t" ground but believe the Vicarage quote is a coincidental mistake.
Given the small size of these deposits and the difficulty and expense required to define an official resource (plus the sensitivity our JV partner has required us to have towards reporting grades in Otago, based on keeping results confidential to each landowner) it makes more sense to have a solid estimate of projected ounces per week production, and then the total net revenue we are achieving - net profit from alluvials measures for us what these deposits are worth in terms of what they add to our company.
We're actually going through a significant (and exciting) overhaul of alluvials, I can't tell you more than that today but we are looking forward to some real progress, and profit, this year. Our placer mining is shaping up as a very useful and unique side to how we operate - it began as a survival tool but is starting to look like a true opportunity for self-funding meaningful hardrock exploration. So when laid alongside our current projects and land package it's very compelling.
This helps explain a lot, we won't be able to know individual area grades, as that is sensitive information to landowners. As the material is scooped up as wash with water added, a cubic metre into the GRU weighs 2.5 tonne, but about 1.7 tonne dry. A minimum payable grade of 3 grains/m3 of wash is about a dry grade of 0.12g/tonne. This is in the region of half the average grade at L&M's Earnscleugh area, perhaps.
This low figure can be put alongside the impressive Ophir test grade (above) of 19.4g/tonne, this is over 160 times better than the payable grade. Here are some photos of the Otago placer operation taken in June 2010 or June 2011, according to CHFIR.
Vtrader found time to purchase today.
Chart has the right look, and the FA from elZorro tipped the balance.
I am predicting POG increase, and GEL fits the theme.
V.
Vtrader found time to purchase today.
Chart has the right look, and the FA from elZorro tipped the balance.
I am predicting POG increase, and GEL fits the theme.
V.
Good on yer Vtrader, expecting lots of EWT posts over the next few months..
Overnight GEL announced some additions (one proposed) to the board of directors.
Justin Cochrane and Adrian Fleming, both from Vancouver, have plenty of company experience and enthusiasm by the look of it. The timing of this announcement, after the investment by ACC, confirms GEL has turned a corner, and 2012 is going to be a good year for the company.
Another tricky question arose from a UK advisory firm's report (Vicarage Capital).
Q. Vicarage Capital has published at least three short notes to the web about GEL, and in all of these they claim that Newmont reportedly drilled 44mtrs @36g/t Au, slightly north of a GEL permit (presumably WKP, so probably still within the GEL permit space). When I asked them directly, this aspect remained unchanged. They replied that this information was passed to them in a meeting(s) with Glass Earth in 2010. Is this drill data correct, where is the site, and why is Vicarage the only web source for that information?
A. The report from Vicarage is slightly confusing in that it amalgamates news from WKP and a discussion of our Waihi West JV. These are two different things. WKP (10km north of Waihi) you'll of course be familiar with..Waihi West again is a JV with Newmont (65%) but relates to our permit within Waihi to the (immediate) East and South of the pit (https://data.nzpam.govt.nz/PermitWebMaps/StaticReport.aspx?permit=40767). We don't have news to release yet on this but the Vicarage report is picking up on some of the excitement coming from Newmont's exploration on their 100% ground next door. They presented this at the AusIMM NZ conference late last year and I understand will be publishing resource/reserve estimates from their discovery later this month.
The high intercept that Vicarage quotes looks just like the new Correnso deposit, (said to be) 650,000 oz Au, at 12g/t, accessible as an underground system from their existing workings. It's stayed hidden for so long as it runs in a different direction from previously known mineralisation in the town (a N-S rather than NE-SW orientation), and while we have no solid news on our own permit today, having such a large discovery made right next to us certainly poses some exciting questions - especially given that Newmont is exploring Waihi with vigour and we're already part of that.
650,000 oz at NZ$2300/oz is 1.5 Billion dollars worth. It's not near WKP, but very near the GEL permit 40767, which runs under Waihi township. The Correnso find is deep but underneath some houses, (not many), and how Newmont Waihi Gold handles this situation will be informative. With gold at this grade close to their milling plant, the pressure might be off WKP for a bit, while Newmont proceed with planning hearing stages for Correnso. See the satellite map of the area, the 35/65 JV boundary is less than 1000 metres away.
GEL up 15.5% on the TSX overnight, resting at C38c, which brings it close to the NZ price of NZ48c. Having two more Canadian board members is a smart idea.
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Originally Posted by Vtrader
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