I've just noticed the change in the TSX news release. There was a line missing from the cash allocation for the deal as first posted. In all, NZ$4mill in cash is being transferred, and I would assume about another NZ$1mill in current share value to make $5mill total, this is over 2mill shares at about NZ45c.
From a shareholder point of view, the press mistake is quite a big one - I purchased some shares based on the first NR. I would also like to know when GRU#1 will be operational at Drybread, as it's been a few months since it was retreived from Earnscleugh, and at that stage it had presumably been in going order.
CORRECTION FROM SOURCE: Glass Earth Gold to Purchase Joint Venture Partner to Consolidate Placer Gold Production WELLINGTON, NEW ZEALAND--(Marketwire - March 15, 2012) - This document corrects and replaces the document released at 8:00 AM EST on March 15th, 2012. In the table titled "Consideration," a row labelled "Deferred cash (payable June 11, 2012)" has been added. The complete and corrected news release follows. Glass Earth Gold Limited(TSX VENTURE:GEL)(NZAX:GEL) ("Glass Earth Gold" or "the Company") announces the purchase of its placer gold production joint venture partner, Goldmines New Zealand Limited, as well as the remaining 50% share of the joint venture's mining operator, Dunstan Mining Limited, in regards to the placer mining/exploration project located in Otago, New Zealand.
On 15 March 2012, the Company entered into agreements to acquire full ownership of its placer joint venture and associated mining equipment. The transaction involves purchasing the 50% of shares in Dunstan Mining Limited (mining operator) that the Company did not already own, and 100% of the shares in Goldmines New Zealand Limited (the other 50% joint venture party).
Taking full control of placer mining activities will enable the Company to significantly accelerate and increase production capacity.
In 2011, the placer joint venture (then 50% Glass Earth Gold), contributed CAD$752,000 in gross revenue and CAD$274,000 in net revenue based on only one Gold Recovery Unit ("GRU") operating. The Company plans to commission a further GRU in Q2 and another in Q3.
This together with 100% ownership and increase in throughput should enable the Company to achieve its previously articulated production goals.
Consideration
NZ$m
CAD$m
Issue of 2,188,184 shares of the Company
Cash
0.5
0.4
Deferred cash (payable June 11, 2012)
1.5
1.2
Deferred cash (payable NZ$80k/month (CAD$65/month) for 25 months commencing July 1, 2012)
2.0
1.6
Total cash:
$4.0
$3.2
The transaction is subject to TSX Venture Exchange approval. About Glass Earth Gold
Glass Earth Gold is one of New Zealand's largest gold exploration companies, with its experienced geological team exploring promising gold prospects across a land position of approximately 10,000 square kilometres, in both the North and South Islands. The Company held a net cash position of CAD$3.6 M at the end of Q4 2011 to fund exploration progress.
From NZ Resources today, delayed response..
New high grade hit for Glass Earth Gold at Muirs Reef
Ross Louthean — 16 March 2012
Active New Zealand gold explorer and boutique miner Glass Earth Gold Ltd (TSX-V and NZAX: GEL) has had strong results from the second of 17 diamond holes being drilled at Muirs Reef in the Hauraki goldfield.
Assaying of hole MSDDH9 gave a series of intersections, the most significant being 2 metres from 48m depth grading 38.4 grams/tonne gold and 49.2 g/t silver. Higher up the hole there was a 2m interval grading 2.5 g/t Au and 1.2 g/t Ag and from 85m depth there was an 18m section @ 0.78 g/t Au and 0.9 g/t Ag. The drilling programme at Muirs Reef will continue through this year and take in about 2,500m of drilling to identify gold mineralisation in the Massey Reef area.
Simon Henderson, Glass Earth Gold’s chief executive said these results were encouraging news for the project and the company was now moving to double-shifting of the rigs for the next holes. “Our exploration team is working hard to develop and evaluate the Massey Reef gold system – the results so far show continuity and expand the system, and striking this high grade interval is a very promising sign,” he said.
The Massey Reef drilling programme follows completion of trenching last year that included significant surface results, including 24m @ 5.7 g/t Au and 1.9 g/t Ag, and 10m @ 3.1 g/t Au and 1.7 g/t Ag. Muirs Reef is 65 kilometres south-east of Newmont Waihi Gold’s Martha open cut mine which has an historic production of 10 M ounces gold and substantially more silver. Muirs Reef is at the southern end of the Hauraki Goldfield. Two quartz reefs were mined within this epithermal system until the 1930s, with over 43,000 oz of gold extracted from shallow surface and underground workings.
Massey Reef is part of the Muirs Reef mining area. Recent surface trenching results in outcropping and sub-cropping quartz veins demonstrated a 650m strike length of the surface mineralisation, ample dimension to potentially host a significant gold resource.
Remember the email I received from Simon Henderson on 10th February 2012 (already posted) contained this:
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.
I think the good drilling news at Muirs, and feedback from contacts at PDAC, may have pushed a long-mooted deal with Bob Kilgour forward. There is no doubt that there's a lot more interest in Glass Earth's prospects in 2012. A weighted average of the prices for GEL shares on the TSX leading up the 15th March would have been C37c or so, the exchange rate conversion to NZ is about NZ45.7c, or 2,188.184 shares to give a value of $1mill NZ in GEL shares.
This could explain why the big GRU#1 has not been deployed yet - Glass Earth perhaps wasn't too keen on having to halve the profits in perpetuity, and gaining access to Dunstan Mining accounts might have been sporadic. I have yet to find out exactly where Dunstan Mining's buildings are, or find out anything about their assets list. Surely these assets will be incorporated into the main set of books for Glass Earth from 2012 onwards.
With up to $5mill in cash and shares available to Ophir Gold, there should be nothing stopping a rapid rollout towards mining at Ophir. GEL still has a JV there, a lot of area around the Ophir gold permit(s). It'll be interesting to see what happens over there in the next few months. Maybe Ophir Gold will use the funds to purchase or build new mining equipment for processing. I think a crusher/mill is required at least.
As far as GEL shares go in the meantime, some good drill results at WKP, Muirs or Hindon will create buyer interest. But if on top of that, the GRUs start to produce plenty of ounces within a quarter, the finances of Glass Earth will be changing dramatically. If 50% of the gross return on placer gold was net profit, $5mill profit would require about 5,000 oz of gold to be produced (the target is 7,500oz), which is about 20oz a working day.
Goldmines NZ Ltd (soon to be GEL) has permit PP39336 in Southland, and has applied for EP53378 and EP53379, West Coast. GEL was the operator for one. Map of PP39336 below, it's a decent sized one at 15,100 Ha, but has an expiry date of May 2012. Normally only the most prospective part will be saved as an EP or as multiple EPs. Glass Earth has helpfully already listed all the JV permits and applied permits with Goldmines NZ, clicking on the LHS will link through to the NZPAM maps. This was done two months ago.
Application Permit 53380, have a look at that - we could be running West Coast beach sand through the GRUs. This area starts just south of Three Mile Lagoon, and covers some of the coast (some nowhere near roads) down to where the Haast River enters the Tasman Sea.
Looks like the permit application is only for gold/silver. The gold normally sits in the ironsand strips on the beaches, which can also be a good resource in bulk.
NZResources has this article from Simon Hartley, and this time it's a result of a direct interview with Simon Henderson. The figures line up with the basic maths above, about 20 ounces of gold a weekday is the target.
Glass Earth buys out its placer mining partners in Otago
Simon Hartley — 19 March 2012
Placer gold miner and active New Zealand gold explorer Glass Earth Gold Ltd (TSX-V, NZAS: GEL) has bought out its Otago joint venture partner for $4 million in cash and script.
It is now targeting quadrupling of gold production out of Central Otago this year.
It appears 2012 could be the year Glass Earth finally hits its straps after five years of, at times, surviving hand to mouth, and repeatedly having to seek fresh capital. Glass Earth Gold has spent about $35 million in gold exploration around the country in almost five years, much of it in Otago, and is this year expanding gold production from one to three sites in Central Otago.
With $C3.6 M ($NZ4.51 M) cash in hand at the end of last year, the existing placer gold production unit in the Ida Valley will be joined by two more, at adjacent sites in the Manuherikia Valley.
Late last week Glass Earth Gold purchased placer gold production joint venture partner, Goldmines New Zealand Ltd and also the other 50% share of the joint venture's mining operator, Dunstan Mining Ltd, which had overseen placer mining and exploration projects around Otago. Glass Earth chief executive Simon Henderson said all operations, equipment and staff from Dunstan and Goldmines have moved directly under Glass Earth's umbrella.
“Taking full control of placer mining activities will enable the company to significantly accelerate and increase production capacity.
“We want to be generating a healthy cash surplus from placer [gold production], which will set us apart from other greenfield operations,” he said. Glass Earth at present targets 20-25 ounces of gold per week from the Ida Valley, but has budgeted this year for a total 100-110 ounces per week from the three sites.
In 2010, gold from the Ida Valley generated $357,000 revenue for Glass Earth. In 2011, the joint venture gold production contributed $C752,000 ($NZ943,775) in gross revenue, using just one gold recovery unit.
Henderson said the two units being commissioned would be in the second and third quarters this year.
On the question of funding streams for operations, he said the buy-out payments totalling $2 M cash were spread over 25 months, at $80,000 per month, which left Glass Earth's cash position largely intact. Henderson hoped that with improved cash flow there would be no need to seek any recapitalisation from shareholders this year, instead focussing on “delivering some value to shareholders.”
Craigs Investment Partners broker Peter McIntyre said while as a “niche operator,” Glass Earth's production costs would be low compared to the overheads of major producers, but it will “at some stage” have to consider going back to the market. “Glass Earth needs a year of getting a few runs on the board for when they do have to go back to the market,” he said.
In the North Island, exploration is focused on large epithermal gold systems in the central North Island Hauraki region, including a joint venture with Newmont near its Waihi mines and its own exploration project -- at Muirs Reef. “That [recent assays from Muirs] has been a real shot in the arm for us,” Henderson said.
Glass Earth early last week reported its second set of strong results from its diamond drilling at Muirs Reef.
The most recent assays returned results of a 2 metre intersection of gold at 38.4 grams/tonne and silver at 49.2 g/t, while in late-January results included 2m of gold at 2.46 g/t and 17m at 1.58 g/t.
*Simon Hartley is senior business reporter for the Otago Daily Times.
Big trading day for NZ with GEL, someone ended up with some bargain shares..(not me ).
I think the Birchfield dredge is the biggest example of a GRU we have. A West Coast council offshoot helped with a $2mill loan to get it restarted. Interesting background from further up the West Coast.
Just spotted that Bob Kilgour has also successfully helped sell most of 100 lots on Molyneux Estate in Alexandra (has approx 1/3 share), and the contact details were the same as for Dunstan Mining for some of that time. Things were a bit tight in 2009 re council fees for a related commercial site on Boundary Road. Not too many houses show up on a satellite map though. Must be an old scan.
Renison Consolidated Mines has wasted no time in filing an EP (54216) for GEL's relinquished area around the Talisman Mine.
GEL let this area go early I think, and RSN is a penny dreadful that would in theory have difficulty in raising their own capital to explore these areas.
90% interest in a mesothermal shear zone. E-W orientation, with strike length of 760m,6km shear zone, with a separate 4.7km vein swarm at Hindon. Rock chip samples have returned several results ~41g/t Au, with up to 71g/t Au at Hindon.
Placer Deposits (South Island):
GEL has a number of deposits, which produce 2,500oz/yeah Au. GEL purchased a 40t/d float unit, which was refurbished in Q3 2009, and production begun in Q1 2010. With recent investment of C$1.5M from placer specific investment group, GEL intends toincrease production from these placer deposits to 7,500oz/year Au in 2012. Recovery is through gravity only.
Others:
There are numerous other small high grade vein projects located within the Otago South
Island area at various stages of development/exploration.
They also mention that 2010 exploration by Newmont revealed extensions of good-quality drill results trending in a NE-SW direction from the Correnso deposit and further into the GEL JV which lies under most of Waihi. I think we'll need GEL's confirmation on that one.
The Vicarage report also states that a placer specific funding group has funded C$1.5mill towards JVs in the S.I. If this is correct, that'll be some of the sites in the Manuherikia region, JVs with Placer Group International and John Youngson.
I have an overseas contact who mentions the rumour? of Newmont agreeing to a new drilling program for WKP, for about 5,000ft of drills, to be completed within 6 months, starting about now. This would be about 8-10 drillholes, if each are about 200 metres or less.
Taken together, it would appear that shareholders are being left in the dark for considerable periods of time with this company. If any data would be expected to affect the shareprice, there are rules about this sort of behaviour. On previous performances, there will be no quarterly report for the three months leading up to Dec 31 2011. This will be incorporated into the annual report, which will come out on one of the last days in April 2012.
Here's a little list of items that could be included in press releases up until that date.
Progress at Game Hen and Hindon, drilling has been ongoing?
More detail on the Placer JVs, how many sites, what gear, photos, what is going on with GRU#1?
Drilling program for WKP - details?
Muirs drill results?
What are GEL's intentions for the Goldmines NZ permits? (Some only under application).
And how about a quarterly report before the end of April, there should be one at the end of February.
There is a lot of buying interest on the low side over on the TSX, perhaps it's steady accumulation of GEL shares.
In the months ahead we should be hearing more about PGIC, who have apparently fronted up with some capital to earn an interest in some placer JVs with Glass Earth. Just when I thought we were clearing all this away..
Placer Gold International Corporation owns Placer Gold International Ltd, NZ (Previously Gold Standard Ltd).
Office: Dorf 76, Walzenhausen, 9428 , Switzerland.
This looks like yet another tax haven company. (If you're going to play with the big boys, make sure you don't pay any taxes either). If you or I tried this, the IRD would be looking sideways at our annual returns.
Placer Gold International was brought in as a shareholder to replace Gold Standard Ltd-registered in the Cayman Islands, in early 2011. No relation to Gold Standard Ltd, a deregistered NZ company. http://www.business.govt.nz/companie... international
A month after Cayman Island resident and gold investor Bob Moriarty (Gold Standard) bowed out, Placer Gold International appeared. Mr Moriarty seems to be a clever investor, see numerous web interviews. http://www.theaureport.com/pub/na/6718
Also revealed on PGI's site, some of the gold grades we're talking about at Vinegar Hill, German Hills, (GEL permits) and these are good. The units are g/m3 (data provided by Glass Earth), but according to the writeup, in this case it could mean grams of gold per cubic metre, the only other mention of units in the PGI document. I hope this is correct, if it's grains per cubic metre it's not nearly so good.
PGIC intends to also run its own Waikaka permit in Southland (EP 51820), and to be reaping 15,000 to 25,000 ounces per year from there, by 2014. Vinegar Hill is not being expected to be mined until 2014 either.
OK, GEL has produced the annual set of books and the MD&A for the last quarter, one month earlier than usual. Either they are precis masters (as our English teacher used to say) or the press release is the short version. Net loss as usual, with some ground being written off.
Here's where they need to be careful: 10,000 km2 of land being prospected they say.. in fact the permit list is for only about 1,100 km2 of land, and another 7,600 km2 or so in the wings under application with NZPAM. Some of this is being re-applied for, after the major permit holdings reached their terms.
There is not enough detail to say much about whether they are heading in the right direction. A lot of digging about down in Otago for just $230,000 of annual placer gross profit, of course maybe a lot of the turnover went to Dunstan Mining. No data about most of the permit work at all.
There have been about 2mill odd shares added to the issued list. These could be the shares for part payment for Dunstan Mining and Goldmines NZ.
From NZResources:
Cash flow erodes losses for Glass Earth Gold
Simon Hartley — 30 March 2012
Small scale gold miner and active explorer Glass Earth Gold Ltd (TSX-V & NZAX: GEL) posted a $C1.71 million ($NZ2.09 M) loss for calendar 2011 trading, but retains $C3.6 million ($NZ4.44 M) cash in hand for ramping up its Central Otago gold extraction programme.
In dual fund-raisings, Toronto-listed Glass Earth raised $C2.9 M and $C250,000 – the latter warrants and options -- and sold placer from its tenements near Alexandra last year for $C316,000 ($NZ387,000).
The $C1.71 M loss for Glass Earth, which has spent more than $35 M in mainly southern exploration in during the past five years, follows a loss the previous year of $C1.46 M.
A month ago Glass Earth bought out its joint venture partner for $4 M, in cash and script, saying at the time it was targeting a potential quadrupling of Central Otago gold production this year -- up to 100-110 ounces per week from three sites; one in the Ida Valley and two in the Manuherikia Valley.
Yesterday, Glass Earth chief executive Simon Henderson said the sole “gold recovery unit” in the Ida Valley would be joined by a second unit, at another site within three weeks, and a third unit is being refurbished to be operational at another site by June.
“Placer mining expansion in 2012 should see a significant increase in both gross and net revenue,” Henderson said in a market statement.
The company’s operations in the North Island remain focussed on large epithermal gold systems around the Hauraki region, including a joint venture with industry heavyweight Newmont Waihi Gold, relatively close to its open pit and underground operations in Waihi.
*Simon Hartley is senior business reporter for the Otago Daily Times.
Maybe I have the maths wrong about the Dunstan/Goldmines deal, but it looked to me like NZ$5mill was the price Simon - $4mill in cash, some deferred, and another NZ$1mill in value of GEL shares.
Why is it so hard for shareholders to find out where the placer sites are going to be, what the gear looks like, and which GRUs are on track? So far I think I've only seen photos of GRU#1. If this is the GRU that is on target for deployment in late June, then for half of the calendar year the gold output won't be huge. Big GRU#1 would by then have been lying idle for about a year, waiting for refurbishment.
Note: this looks like what will be happening, late June setup in Drybread for GRU#1. A year out of action, that has cost GEL plenty.
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