The small cluster of farm buildings that makes up the location Lauder Creek (as opposed to the actual watercourse shown on the map above, and Lauder settlement to the south) is right in the middle of the mining permit.
Here's a letter written to the Crown about mining access for Lauder Station, in 2010. Cam Wylie is connected to the industry-good organisation Straterra, along with Simon Henderson. http://www.ausimm.co.nz/AusIMM_LauderStation.pdf Turns out Lauder Station is further to the north, see topo map.
Thanks to google street maps, have a look at the flat terrain at the 5-star intersection itself. It's dry, sheep country.
Matakanui (to the west of the Drybread location) seems to have been the largest settlement in the area, with about 3,000 to 5,000 residents in the late 1800s. Some photos of the area here, and note the image I've posted before showing the sluicing at Drybread.
It might look impressive, but this was surely an expensive and labour-intensive method. Glass Earth will be able to use mobile diggers and trucks, transporting to the GRUs in their own ponds if needed, conserving scarce water. The GRUs can also travel in a moving pond arrangement anyway. Looks like the area uses an irrigation scheme.
Matakanui has been good to some influential investors over the years. Have a look at Mr Knox D'Arcy, whose oil discovery in Iran founded BP. Perhaps it'll be just as polite for GEL shareholders?
RC drilling is similar to air core drilling, in that the drill cuttings are returned to surface inside the rods. The drilling mechanism is a pneumatic reciprocating piston known as a "hammer" driving a tungsten-steel drill bit. RC drilling utilises much larger rigs and machinery and depths of up to 500 metres are routinely achieved. RC drilling ideally produces dry rock chips, as large air compressors dry the rock out ahead of the advancing drill bit. RC drilling is slower and costlier but achieves better penetration than RAB or air core drilling; it is cheaper than diamond coring and is thus preferred for most mineral exploration work.
Reverse circulation is achieved by blowing air down the rods, the differential pressure creating air lift of the water and cuttings up the "inner tube", which is inside each rod. It reaches the "bell" at the top of the hole, then moves through a sample hose which is attached to the top of the "cyclone". The drill cuttings travel around the inside of the cyclone until they fall through an opening at the bottom and are collected in a sample bag.
The most commonly used RC drill bits are 5-8 inches (13–20 cm) in diameter and have round metal 'buttons' that protrude from the bit, which are required to drill through shale and abrasive rock.
A picture tells a thousand words, this one from GEL is a beauty. Note the approx 1988 Toyoace truck-mounted RC rig, looks like it works fine, and costs are kept in-house. They'll be able to use it on multiple permits. The truck itself might still be worth up to 10k, the rig extra, so that might be 10% of the 2011 year asset list for mining equipment. Glass Earth is using any funds carefully, by the look of it.
Looking along Glassford Rd with streetview, saw the below scene, which includes an unusual cluster of three trees, some with signs of drought or possum damage. Spot the link with the Glass Earth photo of placer drilling?
The description of many placer sites is an old river course, usually in a fan shape. Drybread looks like this, it starts in the Dunstan mountains, and heads out across a flatter area, under Glassford Road. Both sides of the road are old placer or alluvial mining sites. One dotted mining site looks strongly like part of a braided river, and it points directly towards the area of the GEL placer RC drill photo.
I think GEL are looking off to the side of historic workings, rather than rework old ground for slim pickings. They only need 0.2grams/cubic metre of gold, 3 grains/cubic metre to make a small profit. Better spots will be a few grams/cubic metre, hopefully, for great cashflow. Fingers crossed.
I asked Simon Henderson if shareholders could have more detail about the mining equipment that the company now owns.
Q. Can shareholders expect to see a list of the capacities and status of the 3 or 4 GRUs and other equipment, with scaled photos perhaps? I realise that in the end, profit obtained is all that is important, but we have no ability to estimate what the earnings might be without that data. GEL insiders will have most of that information, the market doesn’t.
A. Yes. We're enjoying having full control over this gear and would like to make more of a story of what these plants can do, and how. Grade is one thing, and plant throughput is another. We're right now working on an update to the "placer" page on our website, I think I mentioned to you earlier that we are reluctant to talk about deposit ounces given landowner relationships, but we'd like to give as much detail as we can get away with - photos and details of the plant and our mining process included.
There are a few things that make Glass Earth unique in NZ: the first to cover lots of the country with the latest electronic equipment, the first to hold umpteen permits allowing them to cherry-pick, rare greenfields explorers with their own mining equipment and placer deposits.
Shareholders are anticipating the arrival of GRU#1 at Drybread / Lauder Creek, to complement the current GRU that has had "an extended settling in period". We should be getting some photos of that gear soon. I suspect that Drybread is the best of the placer sites that GEL holds, in terms of size and easy access. It's a big mining permit, laid out to cover 877Ha of an alluvial fan structure.
Now the guessing starts. The total permit area is 8.8 million square metres, and assuming 2 metres depth is payable at the minimum 0.2grams/cubic metre, a total of 130,000 oz there. But even if the GRU#1 was doing 50% duty for 24 hrs every day of the week, or 5,000 cubic metres/week as L&M achieved with it, it would take 77 years to process the whole area. GEL will have to find the best parts of the permit with the RC drill rig, and it looks like there is plenty of choice. Simon Henderson has already mentioned that sometimes the placer gear has hit small areas of over 3 grams per tonne (other permits).
GRU#1 can process 60-75 cubic metres of ore an hour (approx 100 tonne/hr) , in practice 45-50 dry tonne/hr is achieved. Imagine if the gear was running 10 hours a day, 500 tonne of ore per day, and the best spots were selected to yield an average 1gram/tonne grade. Each day would recover 16oz gold, about $32,000 worth. It's nearly $12mill turnover a year off one permit. L&M had 15 staff running a 24hr process, maybe GEL would need 10 for daytime operations only, so about $2mill in costs (again this is a big guess). The result is $10mill of profit per year, which of course would cover all other overheads, access fees, 10% share, royalties and a lot more exploration drilling elsewhere.
Here's the link to the post on the operation at Earnscleugh. Based on L&M data, the grade there averages 0.2g/tonne, but they are using a bigger GRU to get the job done in 7 years. That's an example of a large, low grade placer resource. GEL has some hotspots among their permits, suitable for the smaller gear they own.
Regarding Vinegar Hill and Shepherds Flat, JV placer areas, I emailed Simon for clarification.
Q: Thanks for your answers the other day. Here is the link to the PGI site that quotes data from Glass Earth. The units (g/m3) are not separately defined, but the article does quote data from older alluvial work in grams per cubic metre. The differences in magnitude are so great that it is important these figures are confirmed as one or the other. I could ring PGI, but as the data is from Glass Earth (I’ve not noticed the data on the JV areas before), thought it would be best to know from you.
Do you have any comments on PGI? Has some funding been expended by them?
A. (Simon): I have just had a look at the PGI data, it did not come from GEG but from a report by L&M mining in the 1990’s on Vinegar Hill. The numbers as reported by L&M are correct and they have individual 1 m intervals from drilling up to 20gm/cu m ….yes bonanza stuff. However one has to put this into perspective; there are no alluvial operations digging down to 40-60 metres…where the historically high grade drill results are reported. GEG has had individual 1m intervals up to 4gm/cu m in its recent exploration drilling on Shepherds flat, but one result does not make a resource.
We are currently seeking advice from TSX:V as to how to report placer / alluvial results, so that what we do report is in context and we don’t get a rap over the knuckles. Until we have this sorted we need to be circumspect about what we say.
PGI are in JV earning in on this project, so the current and earlier drilling phases completed by GEG (as operator) are funded by PGI.
The Placer Gold Corp page that shows some L&M Mining data for JV area Vinegar Hill is below. These will be the best grades, and they are down deep, requiring a lot of overburden removal to get at them. Sounds like that's not the idea for placer mining, but 20grams/m3 is a great grade.
Remember that Vinegar Hill is just southwest of St Bathans, and Drybread is southwest of Vinegar Hill, all of these alluvial areas feeding off the Dunstan Range.
I asked Simon Henderson about staffing levels for the acquired mining operation.
Q. What are the staffing levels now? Is Dunstan Mining contracting out to other mining clients, or will it be working solely on GEL interests? Where is Dunstan Mining? Photo?
A. In addition to our existing geology and admin team, we now have a mining team of 10 and growing (to accommodate three or more simultaneous operations), plus a new Operations Manager and COO, accounts support and so on. "Dunstan Mining" (the name will be changed soon) is based in Alexandra, now in the same premises as our geology office (42 Russell Street). We've leased out more workshop and office space, and it’s become a hive of activity. It's more likely others would contract to us to mine (eg on peripheral areas) than the other way around, we have a decent portfolio of projects and many prospects to develop.
On the TSX, the share finished at C32c, about NZ39c, but plenty of interest on the buy side of over 250,000 shares. I think some are shorting the share, hoping to pick up a bargain. Current Mcap would be about C22mill based on that price, does that look like good value for a company that could easily be sitting on a pile of cash within 6 months, with all its permits?
Time will tell whether the "very encouraging" drill tests at Drybread permit will result in perhaps $10mill of net profit each year, but it's likely to be GEL's biggest placer permit holding, and the other JVs are being done on the lesser finds. In the same way that Muirs has been kept as a 100% GEL holding.
I went fishing.
Q. Good to see the big grades at Muirs. Is WKP likely to be a slow burn, waiting for Newmont to run out of easy gold near Waihi, so more attention moving to Muirs?
(Simon) A. Yes and no. No because Newmont do seem committed to the project both in their words and actions, yes in that if for some reason Newmont's appetite for WKP exploration changed (and it would be naive to rule that out), we're never going to regret having developed our own independent project. Just as with our placer gold production, we think it's sensible strategy to hope for the best, plan for the worst.
I think this is a great strategy, how many companies could generate this sort of income from a few hundred hectares? Un-irrigated farmland in Otago (sheep/beef) produces only $200 of gross profit per hectare per year. GEL could achieve $11,000 from each hectare in the permit per year, while only digging up a small portion of it, resowing as grass.
Press release out overnight: confirms the small text line in the MD&A report, a substantial drilling program for WKP north of Waihi is under way. The detail shows the drilling is occuring at the southern end of the WKP area, looking at the base andesite for gold hosting, as seen elsewhere in the region. These will be remote sites, possibly a helicoptered rig at a guess.
On the TSX, looks like a finish at C31c, but some sold at 32.5c earlier in the day, and the last trade of 2,000 shares by Jitneytrade follows a pattern of selling down at the end of the day. Again, high numbers sitting there on the buy side.
All the signs are there, the shareprice for GEL will be a lot higher in just a few weeks, unless all the exploration over the last few years has been imaginary. A great time to accumulate, I certainly am.
No new detail in the NZResources article out today, but that's a reasonable amount of coin to be spent on the drills. GEL has to cover 35% of the costs, but can hold 35% of the permit value too. Try multiplying 3Moz times the gold price. There will be bigger numbers in the end.
WKP gold quest steps up on the Coromandel
Simon Hartley — 20 April 2012
A new drilling programme on the WKP gold-silver prospect near Waihi will see $4 million being spent by the partnership of Newmont Waihi Gold and Glass Earth Gold Ltd (TSX-V & NZAX: GEL).
Glass Earth has a 35% share in the project where a total of 5,500 metres are to be drilled on targets within the permit which covers 3 kilometres by 5 km, 10 km from Newmont Waihi Gold’s Waihi gold mining operations.
Glass Earth’s chief executive Simon Henderson said the joint venture WKP prospect had been inspired by earlier exploration showing broad zones of about 100m of 1 g/t gold and also silver and also “significant high grade” intercepts of widths of between 3m-9m grading between 15 to 60 g/t gold and silver.
“Results to date have demonstrated that this project represents a very large gold mineralised system. The current programme will test both the size and tenor of broad mineralised zones and connectivity of high grade intervals,” Henderson said.
Glass Earth said WKP continued to demonstrate new “enticing” targets south of the present drilling areas and higher grade intersections within the current drilled zones, such as 9.7m @ 17.2 g/t gold and 24.2 g/t silver.
Glass Earth and Newmont have another joint venture in the region, Waihi West, which Newmont is managing and Glass Earth is exploring its Muirs Reef prospect further south on its own.
Muirs Reef has produced encouraging recent results including 2m @ 38.4 g/t Au and 49.2 g/t Ag.
In Otago, Glass Earth is close to having the last of three alluvial gold production
operations begin and has also been getting positive results from other Central Otago sites. It has two operations in the Manuherikia Valley and one in Ida Valley.
ODT article from 2010 implies that GRU#1 was earmarked for McAdies before the leasing out started (L&M). The dark green GRU shown working at McAdies in the photo pages (website) has a capacity close to GRU#1 apparently. I think it's the one that has been moved to Gunclub.
I even saw some mention of GRU#1 going to Ophir, maybe this is part of the reason for the delays in it finally going to a GEL permit in June this year (Drybread).
Some of the pages on the Glass Earth website have been added to. In particular, the placer page under projects, which I've been keeping an eye on, so this is within 12 hrs or so. There are a couple of new images - gold being washed up and a close-up of grains from Drybread. I thought the text was interesting too.
Projects Placer Operations Joint Venture (GEL 50%)
Glass Earth Gold actively mines for placer ("alluvial") gold across its large permit holding in the Otago region (where over 8M ounces of gold has been mined historically since the first gold rush in 1861).Current resources under mining and resource consents total ~15,000 oz, with a further ~15,000 oz under resource development.
The mining, undertaken through wholly owned subsidary Glass Earth Mining (Dunstan Mining Ltd), enables cash to be generated from ground already being held for hard-rock exploration (where we are looking for targets similar to the nearby Macraes Mine, a mesothermal shear-hosted 7.2M ounce deposit owned by OceanaGold).
Current placer production is around 2,000 oz/annum, with the immediate goal of our placer operations is to increase production to 7,500 oz/annum to cover all company-wide "General and Administrative" expenses, with further profit being re-invested into hard-rock drilling and wider exploration in Otago and up north at WKP and Muirs."
Drybread is now 90% GEL owned, not 50% as the header says, but it will take a while to pay off the cash expenses involved there. However, they are a capital cost, won't appear on the trading side of the accounts. Note that the intention is to investigate the placer areas for hard-rock deposits as well, so someone who knows about gold flakes would be able to tell how far they have moved. The grains shown are smaller than a mm across, some hammered flat, most rounded. But these are from soil trenching and pitting tests so far.
Placer ounces of gold (payable) held in permits is likely to be 30,000 oz, that's NZ$60 million worth of sales ready to be collected.
Is Drybread eluvial or alluvial, the definition seems to depend on the distance from the source. Drybread could also be a bench deposit. http://www.southernprospectors.com/id1.html
By coincidence, a google of eluvial placer with Otago picked up:
Eluvial gold placer formation on actively rising mountain ranges, Central Otago, New Zealand
D. Craw, J.H. Youngson
Geology Department, University of Otago, P.O. Box 56, Dunedin, New Zealand Received 12 June 1992. Accepted 17 November 1992. Available online 11 April 2003.
Abstract Eluvial gold deposits in Central Otago, New Zealand, have formed and are still forming on the flanks of actively rising antiformal mountain ranges. These gold deposits are derived mainly by erosion and concentration of fine-grained ( < 500 μm) gold in mature Miocene fluvial quartz gravels.
Chemical processes during Pleistocene-Recent uplift and eluvial sedimentation have resulted in crystalline and amorphous authigenic gold precipitation and up to 2 orders of magnitude gold grain-size increase. The eluvial gold deposits are hosted by thin lithic soil and sequences (up to 60 m thick) of poorly sorted immature schist gravels. The gravel sequences consist mainly of matrix-supported mass flow deposits and channellised proximal fan deposits, intercalated on a 1–10 m scale.
Gold is concentrated in coarse lag gravels (up to 40 cm clasts) at channel bases. Topographic slopes on the rising ranges show an evolutionary trend in space and time, from gentle weakly dissected surfaces, through slightly degraded but convex slopes, to deeply incised convex streams. Eluvial gold occurs sporadically on the gentle slopes, but the most efficient concentration processes occurred where steeper convex slopes yielded an apron of fan sediments.
Gold concentration at these sites resulted from selective and localized removal (“winnowing”) of most schist debris, leaving coarse lag gravels and gold. The combination of authigenic grain size increase and residual concentration ensures that the eluvial deposits retain coarse-grained gold, and that only fine-grained gold is released to the alluvial systems downstream.· ·
Correspondence to: D. Craw, Geology Department, University of Otago,P.O. Box 56, Dunedin, New Zealand.
Helpfully, the soils in the Manuherikia area usually have plenty of schist in them. The Drybread grains are less than 1mm across, so everything points to this deposit being eluvial - Dr Youngson's research field (Placer Gold International).
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