AXG - Antipodes Gold [formerly GEL - Glass Earth]

[elZorro]

Yes, Bucko and Gonzo, it'll be an interesting quarter report for sure. Might look a bit scary at first, with some permits that were let go that'll have to be expensed on the books. They've already had their effect on cashflow long ago. In the latest quarter the placer sales should start to look quite impressive against normal annual expenditure. Have to keep an eye on the placer expenses and allocation of output for possible Neavesville payments though.

Just following the Puhipuhi permit story, I did have an idle thought that this was the project GEL was looking at, but of course a hardrock project closer to the Newmont mill at Waihi is a lot smarter.

De Grey places big focus on epithermal gold-silver

Ross Louthean — 23 November 2012
The Perth junior explorer De Grey Mining Ltd (ASX: DEG) is placing a strong focus on high grade epithermal gold and silver – with a new spotlight on projects outside of Australia.
The company was announced earlier this month as the new holder of the Puhipuhi project in Northland and subsequently detailed the acquisition of epithermal prospects in South America.
The company this week gave a presentation in Australia on its new focus that takes in permits in two provinces in Argentina and Puhipuhi. These properties, the company said, contain “walk-up drill targets.”
The Argentinian projects take in the Sierra Morena, Pachi, Halcon and Boeadora prospects in the Deseado and Somuncura massifs in the Santa Cruz and Rio Negro regions which are “pro-mining.”
The company said that at Puipuhi there are nine priority targets generated from work to date, and more than half of the historic drill holes on the prospect were anomalous.
De Grey said that a total of 50 drill holes had been completed on Puhipuhi and only four went to depths greater than 200 metres.
Meanwhile, the minerals director for New Zealand Petroleum & Minerals (NZP&M), David Crawford has given a briefing to the Northland Regional Council on Government plans to open up exploration in Northland both for minerals and petroleum.
The Northern Advocate reported that a small but well behaved group of anti-mining advocates was present.
The newspaper reported that a survey by GNS Science found that the Reinga Basin in Northland could hold promise for oil and gas discoveries.
Crawford reportedly told the council that that from the time a licence was granted to a shovel going in the ground could take about 10 years.
He said the expectation was that, when granted, an exploration permit would last for five years, then another five years to determine the size of the resource, which would likely involve drilling.
Crawford said responsibility for ensuring environmental standards were met during the process lay with the NRC and the relevant district council under the consent process.
However, clearly the anti miners have been bending journalist ears in Northland citing that there would be a public meeting this week in Whakapara to discuss a Western Australian company “mining the Puhipuhi hills.”
No doubt there will be some colourful claims like those aimed several months ago at Newmont Waihi Gold, the former holder of Puhipuhi which was accused of under-hand night drilling on the property. Newmont made it clear no drill rig had been in Northland as there were no specified targets.
The article claimed that De Grey had paid Newmont $1.27 million for Puhipuhi and that issues of concern put up by the Mine Watch Northland coalition included “risks from mining the mercury laden-rock and complex underground water and stream system.”
Sources: nzresources.com data base and northernadvocate.co.nz

[bucko]

you were right Yan

Revenues from placer mining operations increased significantly for the quarter to $1,079,000 (June quarter: $349,000). Gold production in September and October was considerably higher than for the winter period with the December quarter expected to increase further.
The Company had a net loss for the three months ending September 30, 2012 of $456,000 vs $670,000 for the similar period in 2011.

	Three months ended				Nine months ended				Notes
	September 30,				September 30,
	2012 $''s		2011 $''s		2012 $''s		2011 $''s
Revenue	1,079,000		180,000		1,595,000		607,000
Cost of revenue	(1,360,000	)	(114,000	)	(2,408,000	)	(352,000	)
Gross (Loss)/Profit	(281,000	)	66,000		(813,000	)	255,000		1
Administrative expenses	(122,000	)	(334,000	)	(821,000	)	(769,000	)	2
Salaries (net of exploration costs)	(65,000	)	(69,000	)	(190,000	)	(183,000	)
Finance income	12,000		(6,000	)	18,000		31,000
Non-cash items
Stock based compensation	-		-		(556,000	)	-
Write down of mineral properties	-		(327,000	)	(6,590,000	)	(327,000	)
Loss before & after Income Taxes	(456,000	)	(670,000	)	(8,952,000	)	(993,000	)

[gonzo56]

What happened to the third GRU? (Nevills)

[elZorro]

That got moved to the Drybread area, but not started up yet by the look of it. Maybe it's going to Pigburn. Note that the presentation has 7 pages on WKP, 2 on Muirs, 2 on Placer. WKP is where the money is going to be, the placer will help them get there.

[gonzo56]

oh ok, thanks. I wonder how much of an effect that will have on their earnings report, should be out any day now...

[elZorro]

Thanks for your post Bucko. Please send more in. I'd actually forgotten that a quarterly report might be due soon, so thanks Gonzo.

That placer page on recovery ounces will be fascinating to have a look at when I've got time. Maybe the ground is variable in grade, maybe some days the tuning on the GRUs goes astray. The clay could be clogging up all the screens etc. But here for the first times are the grades on the permits, and these are up to 3x above the cutoff grade at Drybread. Not a bad business as a standalone, C3.6mill profit, or NZ$4.5mill a year. It'll be even better once Bob Kilgour is paid out fully.

[elZorro]

Here are two screens from the presentation, both of them with important new data.

First, the grades and weekly recoveries from the GRUs. The biggest GRU is at Morans, but the best current grade is at Hecklers. Groundwater is a site that has yet to be started, and they're all within the Drybread permit. Output can be 50% down in a given week, but the overall picture is good. Much better than was achieved at Nevills, where the grade must have been poorer. We have not been given an explanation as to why the third GRU is not in action again, yet. If the trend for the month of August had continued, we'd have seen the company knee deep in cash by now. The target for production by the end of the first year was set at about 144oz/week, assuming three GRUs in use (7,500oz in a year). Total potential resource for the areas in the table is about 24,000oz.

But then there's another cryptic line, Southland 100,000oz? GEL has a permit down there.

The resources page for WKP gives approximate figures for the gold contained in the better known sections. The Central area potentially holds 2.3Moz, the original East area 1.4Moz, the Western area and EG areas are too new to delineate by the look of it. But even the earlier areas have a total possible resource of 3.7Moz. It's not a big jump to 5Moz, the supposed trigger point for Newmont. There's confirmation that WKP37 is being drilled, and this is looking for another high-grade intercept. Looks like there is just one drill in use.

[bucko]

so much activity today!

thought i'd take advantage of the price drop myself and increase my holding a few thoasand more and drop my average purchase price

Once they release the quarterly report i think the price is going to rally somewhat, absolute bargain at the moment in my opinion! 70oz a week they should be clearing at least 100,000USD a week currently and now its an established placer it should be able to icnrease further than that as we come into the summer months and conditions down south improve.

I hope there is no takeover for GEL in the near future, I'm really looking forward to seeing what this could turn into

[elZorro]

Here's a section out of the general writeup on Glass Earth, done in 2011. The Gunclub permit has been wrapped up for over a year now. It gives an indication of the staffing needed at Drybread.

Glass Earth is currently producing gold from its Gunclub Project, a placer/alluvial deposit in the Ida Valley between the Raggedy and Rough Ridge Range. It’s a shallow deposit holding from 1,000 to 2,000 oz. Though it is a relatively small deposit, the gold is recovered quickly and economically. The operation is worked by four men using three diggers, a truck and a trommel-based gold recovery unit (GRU). The project is worked systematically and reclamation is accomplished almost simultaneously with gold recovery. Top soil is removed and stored nearby, one metre of overburden ground is then stripped and moved aside, the alluvial gravel is removed and placed into the trommel where it is washed, and the heavier, gold containing concentrate is collected in a trap under the trommel. The concentrate is removed and taken to be processed on a shaking table, a mechanical process similar to panning. Using this method, Gunclub is producing approximately 100 oz of gold per month.

Included in the latest presentation, is an update on the size and grade of the Correnso deposit that Newmont is keen on recovering at Waihi. 850,000 oz at 11 grams/tonne, these days that's a great deposit. It's 1.6 billion dollars worth.

Glass Earth is looking at the feasibility of trucking ore from the prospective Garibaldi deposit to Macraes. This must be part of a decision-making tree.

[elZorro]

http://www.glassearthgold.com/s/News...eportID=558357


So, this is the new project - I wasn't aware of this area at all. I did notice that GEL has a permit application in for an area called Neavesville North, I don't think it's been granted yet.

Formerly a JORC resource of nearly 300,000oz gold, that's great for a start point as it appears to be shallow, and three times the amount of silver with it. That'll help a small amount with extraction costs. Over another 100,000oz underground accessible. From the supplied map, there's andesite up there, also a good marker. Not too far from Waihi either. A 50% JV with Geoff Loudon interests, means that the other half of the capital won't be a problem. GEL isn't big enough to do a project of this size by itself, but it's also too small for the likes of Newmont. GEL's connections with Newmont would be helpful though, if the ore needs to be processed cost-effectively. No doubt Newmont's facilities at Waihi have some spare capacity at the moment.

I need to spend a lot more time looking at this, but it would appear the terms of one of the permits means it'll be time to do some drilling soon. Payment for the area seems to be on a spread basis and assuming gold is produced in the near term (unless this is going to turn up from placer), or it can be GEL shares or cash equivalent.

GEL now has JV permits covering quite a bit of the area around and above WKP. A good big block if it ends up being mined soon.

For Neavesville, assuming all three permits had a total of say 500,000oz, the valuation being about NZ$250 an ounce inground, at the point they are called NI 43-101 Reserves/resources, then this is a value of $62million to GEL for a 50% holding. A few bills and some drilling to go first (shared costs), but added to nearby WKP it's a tidy picture. WKP has only been drilled 36 times, Neavesville 63 times, but they were on average shallow drills, avg 140metres. There is potentially more lower down, if the surface is the top of an epithermal gold resource, as is normal for the area.

Eurasion's view of the transaction.