AXG - Antipodes Gold [formerly GEL - Glass Earth]

[elZorro]

Glass Earth raises more capital
SimonHartley — 12 October 2012
Small-scale Otago gold producer GlassEarth Gold Ltd (NZAX & TSX-V: GEL) has raised a further $C360,000($NZ456,000) in private placement funding as it juggles cash-flows againston-going exploration costs at North Island prospects.Glass Earth remains one of thecountry's largest gold explorers with two other targets being drilled in theHauraki region, including a joint venture on the WKP project with Waihioperator Newmont Waihi Gold.
In late-June Glass Earth clinched$2.95 million from private placements, to refinance the $4 M buy-out of itsformer joint venture partner, then for the half-year to June booked a $8.49 Mloss on the back of accumulated exploration cost writedowns.
Glass Earth has spent almost $40 M inless than six years exploring around the country, much of it around Otago;largely from Canadian investors on the Toronto stock exchange's and ventureexchange.
Glass Earth chief executive, SimonHenderson, has said recently cash allocation has been refocused on the goldtargets with the best potential, plus there had been a pruning of its overallportfolio of prospects.
A target of producing $2 million ofgold had been set for the second-half of this year from the Maniototo, withgold revenue targets in 2013 of $6 M.*Simon Hartley is senior businessreporter for the Otago Daily Times.

This was on NZResources today, maybe it'll be in the ODT as well. Looks like more information will be dispersed in due course.

[elZorro]

I have missed something in the press release for the last private placement:

The proceeds of this private placement will primarily be used to provide for exploration and acquisition activities.

This was pointed out to me in an email from Simon Henderson. Some kind of a deal is in the wings perhaps.

Another comment was about placer recovery rates:

The alluvial mining has been going well for the last two months, both plants are working smoothly and producing 30-40 oz each per week, i.e. cumulatively 70-80 oz/week. Our best week to date is 97oz.

All this puts a new, more positive complexion on the press release. I'll have a look at my placer spreadsheet to see how that looks, but the placer operation could well be turning a profit, not too bad at this stage of the proceedings.

Strenuous efforts are also being made to get prompt assay results from drill WKP35.

The spreadsheet results were that the average grade could be about twice the cutoff value, and at the moment, annual gross profit after Dunstan Mining and the placer team are paid, would be approx $4mill p.a. assuming no great maintenance overheads. Some of the return will go to the landowners. But there could be about $75,000 a week spare cashflow.

[elZorro]

Further to communication received from Glass Earth (both Simon Henderson and Thomas Rabone):

Placer results are a snapshot in time, and until a few more weeks have passed, they will be careful about what is reported as the recovery ounces. For security reasons as well as commercial reasons, they cannot separate out the results from each GRU. That's understandable. However, they are using some new technology like variable speed motor drives (VSDs) to improve the results over older methods. Sounds good.

Simon Henderson: I think it's fair to say we're not reluctant to publicise this, just making sure we don't over promise or jump too soon, and can record good, robust production over a meaningful period.

Regarding the rationalisation of the permits:

SH: We have not reduced any of the significant alluvial assets, and remain optimistic that there is a lot more alluvial/placer potential out there. We have dropped significant portions of our second tier hard rock exploration targets that we don't wish to pursue. The costs of holding these permits was in excess of $250,000 p.a..

On WKP:

SH: We're committed to long-term success, and that means getting reliable and important information out promptly. This has been frustrated on our most important project by the assay turnaround at WKP, we still await "urgent results" on WKP 35. I've just been in Waihi trying to facilitate better information and assist Newmont in getting better assay turnaround.

I had a quick phone call with Thomas Rabone, he's on the staff of GEL. His father is Dr Stuart Rabone, a geologist well versed in the terrain around WKP and Golden Cross. Thomas has formal legal training, has worked underground, and is helping get things sorted out at Alexandra in the meantime. I think I detected a lot of optimism for the months ahead.

[gonzo56]

Hey elZorro,

I’m starting to take an interest in GEL, so I had a look at the earnings report ended JUNE 2012. Glancing over it, I see that it mentions that Gold recovery was “thwarted by the snow of the southern winter" and that there were high establishment costs that quarter (which are now resolved).

The report also mentions the fact that the second Gold Recovery Unit (GRU) became operational in late May and therefore is only partially reflected in the result. Furthermore, the third GRU became operational only in the last few days of June.

Considering the last report barely took into account two of the GRUs, what is your opinion on the result GEL will release in November? (How big are these two GRUs..?)

[elZorro]

Hey elZorro,

I’m starting to take an interest in GEL, so I had a look at the earnings report ended JUNE 2012. Glancing over it, I see that it mentions that Gold recovery was “thwarted by the snow of the southern winter" and that there were high establishment costs that quarter (which are now resolved).

The report also mentions the fact that the second Gold Recovery Unit (GRU) became operational in late May and therefore is only partially reflected in the result. Furthermore, the third GRU became operational only in the last few days of June.

Considering the last report barely took into account two of the GRUs, what is your opinion on the result GEL will release in November? (How big are these two GRUs..?)

Hi Gonzo56, good point, as the next quarterly report will be the first one to show a substantial gold income on the books since the IPO. The GRUs are above the hobby level unit, but still a lot smaller than many other systems. L&M are running one 4x bigger than any of GEL's at Earnscleugh.

GELs' units can handle 50-70 cubic metres an hour, which is 50-70 scoops from a big 25 tonne digger in an hour, each. 0.2grams per cubic metre of gold is the breakeven grade, and I think they're doing twice that, so on current performance (a snapshot), they could have a net profit of $4mill a year. If they run any of the gear 24x7, this would greatly help further. But I think they are keener on tuning up the GRUs at the moment, and getting the third GRU operational. For that they'll need daylight.

Regarding the merits or otherwise of a stake in GEL: Brace yourself in the best possible way for quite a bit of news from GEL's head office dept. This has all been intimated to the market, while the weeks stretch on, but certainly quite a lot should have happened by Christmas.

WKP 35 drill assay, and other drills from WKP, could be a big impact on the company
Garibaldi - some exploration may be occuring, new hardrock find
Ophir - a JV and the other party now has cash
Muirs, report due sometime
Placer results (Drybread), 3rd GRU, JV with John Youngson, other sites
Latest PP part ear-marked for an acquisition?

Bear in mind that this is not a billion dollar company like OGC. Any results that imply some hard-rock mining is part of the future for GEL should have a proportionately big effect on GEL's shareprice. Current Mcap ranges from only $18mill to $25mill. They've spent a lot more than that on exploration, and I contend it has not been wasted.

Current price on the TSX is cheaper than over here.

[gonzo56]

Ok, thanks for your thoughts. It seems like they do have a lot on.

Yeah, I would prefer to keep it simple and stay in the NZ market though. On a side note, the TSX listing has had a bit of a volume increase late Sept early Oct so the chart doesn't look too bad. I look forward to hearing more about GEL, Cheers.

[ynot]

Well Gonz your certianly in the right place for that thanks to our man EZ.

[elZorro]

Talk about pressure.. I hope this share does the business sometime then

There's been a lot of volume on the TSX all of a sudden (at C25c), a general reflection on the lower liquidity of the share when there's little news. If you need to sell a lot of these shares at the moment, your timing has to be good, or they'll go for a song. I think head office already knows that too.

The flip side is that there have always been opportunities to buy GEL shares at a low price, most years. It's also true that if GEL makes the jump to being a hard-rock miner (or is connected to a mining permit of the right size), then these changes in the company valuation will be nothing but noise. Junior explorers moving to the next stage, do so spectacularly.

I have not bought GEL shares to play it safe. I'm definitely hoping for a life-changing experience at some point.

[bucko]

After seeing the increase in gold output from the placers im quitely optomistic of that earnings report! Am i safe to assume we could see GEL maintain the 88oz production throughout the summer due to improving conditions?

My first post on GEL, El Zorro you seem to be the king of this forum, some great posts here!

[elZorro]

The odds of Newmont's Correnso project getting the go-ahead look good. This would assist GEL, in that a positive cashflow from Newmont's operations in the Waihi area increase the chances of a long-term interest in the WKP JV. The CHFIR page mentions that the aim is to prove the WKP permit holds more than 3Moz of gold.

Golden Link hearings for Waihi begin in December

Ross Louthean — 24 October 2012
Submissions are in for the Golden Link gold development in Waihi and mine operator Newmont Waihi Gold has noted that most submissions are in favour of the project.
There are almost 500 for the consents hearings to be heard for Golden Link by the Hauraki District Council, scheduled to begin on December 3.
Newmont Waihi Gold said it is aware of the sentiments expressed in the submissions as a copy each must also be given to the company as the applicant.
The Golden Link project takes in the area around the Martha open cut mine and the proposed Correnso underground mine that would provide ore to carry operations through until 2020.
The company said the submissions are about three to one in favour of the project, with a small number not expressing a view either way.
“The main issues raised in the submissions that opposed the project are effects on property values, and vibration and noise,” the company said.
Newmont said that while it has consents to blast at night at the developing Trios underground mine at Waihi, the company has no plans to undertake blasting at night at the Correnso operation.