AXG - Antipodes Gold [formerly GEL - Glass Earth]

[JBmurc]

JB, just be careful that your shiny new metal detector doesn't get caught up in the front wheel.. I assume you've bought one?

no detector yet don't know if I'll get one,, might instead get a 2in backpack dredge etc paid for by gold shares when they re=rate

[bermuda]

Yeah good one Troy. Up here the local farmers talk of pheasants with tails as long as shovel handles.

For those of us who missed the TV screening , here is the video. Sure enough, the reporter mentions 80 ounces a week. Hmm..If the Moran site has GRU#1, it should be sitting in a big pond.

http://www.3news.co.nz/Modern-gold-b...3/Default.aspx

Thanks for this video elZ

[elZorro]

Thanks for this video elZ

No sweat Bermuda, now we need to see a good bank balance in the Q3 books.

JB, sounds like a good plan with the dredge, that's what I call commitment..

[elZorro]

In the last quarterly report, which I've only skimmed through so far, there are some grades attached to the non-current placer areas. These could be handy.

Placer exploration & mining work in 2011 was concentrated on Gunclub, Shepherds Flat and Drybread. South Island placer mining at Gunclub continued throughout 2011 inhibited somewhat by winter snows and the building of a large water storage dam.

Resource definition drilling was completed at Shepherds Flat (57 drill holes and 709m of drilling). Results were encouraging and a full analysis of drilling was presented to Joint Venture partner Placer Gold International who agreed to proceed to stage two of the Shepherds Flat Joint Venture.

RC drilling and pitting was continued at Drybread to provide grade control and resource definition in preparation for mining. Encouraging results allowed progression with mine planning. Council resource consents and a mining permit were granted allowing two further Gold Recovery Units to be deployed – complementing production at Gunclub.

Q1 2012 EXPLORATION ACTIVITY
In late March 2012, Glass Earth took full ownership of its placer gold production joint venture. Settlement of the transactions took place on March 19, 2012. Taking full control of placer mining activities should enable the Company to significantly accelerate and increase gold production capacity.
Glass Earth is continuing with gold production at the "Gunclub" mining operation while preparing for two additional operations to commence nearby in New Zealand's Otago region. Site preparation has been completed at the "Drybread" minesite, with the second placer Gold Recovery Unit ("GRU") mining operation being commissioned in late May 2012. The Company is also refurbishing and upgrading its GRU #1, which is expected to be installed and running as another operation at Drybread by June 2012.

A drill program was completed at Waikaia from the 6th to the 23rd March. A total of 34 holes were drilled. Three samples returned between 500 – 650 mg/m3 and one sample of 15,300 mg/m3 gold.

A second phase drill program was completed at Shepherds Flat with the completion of 45 drill holes and a total of 558m drilled. The average wash grade was 452 mg/m3 at a depth of 14m with an average thickness of 4.5m.

As we now know, GRU#1 is up and running as they'd hoped at Drybread, and Drybread appears to be an amalgamation of three separate hotspots into one permit. Shepherds Flat is a bit longer term, it's also a JV, and the reasonable grades appear to be about 14 metres down. A long way to fall, and a long way to dig.

So now, have a look at Waikaia, EP52844, 223 Ha. This is a more recent EP that Glass Earth obtained in the Southland region. It's not in the deep south, but on googling Waikaia I see that L&M Mining had a go at an adjacent permit MP41602 and stopped working on it when the gold price was not high enough. Waikaia Gold Ltd seems to be an amalgamation of interested smaller shareholders, and they're going to work it starting October 2012, in the style of the Earnscleugh permit. So it's a placer site, the flood plains of a good-sized river.

The map of the bigger MP area shows GEL's EP off to the west. But it's not far away, and my attention was drawn to the huge grade they've found there. Just one of the shallow drills, sure. 15.3 grams per m3, about 7g/tonne. If you average the three drills with good grades, you'd get 5.5g/m3. We are told that a GRU needs just 0.2g/m3 of gold to break even. A single GRU could produce (if the three sample areas kept going) 5.3g/m3 x 50m3/hr x 24 x 7 = 44,520g spare gold per week, or 1436 ounces per week, nearly 75,000 oz/year.

This would be a gross income of $150mill a year. It's only 5 grams in a cubic metre, but I have to admit gold is a very rare element.

This is all conjecture, who knows, there might be grades like this in parts of Drybread too. Relatively small areas with these grades will make a big difference to the profits. It is curious timing that the drilling at Waikaia was mostly completed just before GEL struck a deal with Bob Kilgour in mid March.

In the April 2012 presentation uploaded by CHFIR, the placer gold production costs were lower at US$800/oz, and Waikaia was mentioned as one of the future placer prospects. From the production chart, Gunclub, PigBurn and even Shepherd's Flat are not expected to add a big percentage to the annual production.

Besides Waikaia Gold, who have enlarged their area with another EP, there are two smaller miners, and NZ Minerals Ltd, normally GEL's 10% partner in Otago permits, has a big prospecting permit application 54316 surrounding GEL's permit. GEL's permit reaches one side of a river or stream, the Garvie Burn.

From an archeological report for Waikaia Gold's MP, 2010:

The gold is largely located within a 200 - 400 metre wide channel on the Waikaia Valley floor,
sitting in a basal wash at an average depth of 19 metres.
The proposed area of mining extends for approximately five kilometres along the west bank
of the river from the Garvie Burn in the south to the Dome Burn in the north. While the main
proposed mining path is located between the Riversdale - Waikaia Road and the Waikaia
River, the proposed path also follows the main gold bearing channel a kilometre up the
Garvie Burn, south east of Waikaia - Riversdale Road in an area lying between this road and
Pyramid - Waiparu Road (Figure 2, 3).

I wonder if GEL read this article too, and made a beeline for the area. Waikaia Gold will work the true left bank of Garvie Burn lower down to the Waikaia, and GEL has an option to work the right bank a kilometre or two upstream.

Waikaia Gold was given the go-ahead in February 2012.

[elZorro]

The TSX price dropped a bit on very low volume overnight, that would be the place to buy GEL at the moment. But I have recently formed the view that we're fairly safe buying here at a slightly higher price. There are many reasons for this.

1. GEL has been at C75c /NZ85c in late August 2011 on good news.
2. Unexplained increase in the placer gold recovery from 42oz/week to 80oz/week (News item) as the two GRUs got stuck in at the Drybread areas.
3. The images of Drybread show shallow workings. I'm picking that the GRUs are being fed with the lesser grades on the top of the profile, and that as gold always gravitates downwards, there is better yet to come. I hope it's not down 14 metres like some other spots, but if they're doing 80oz/week now while still warming up to the task, there could be very good news in future.
4. The current 30 staff might need at least $5mill/year to operate with, allowing for equipment and fuel costs. GEL has in the past year or two used maybe $4mill annually, the big external survey costs behind them. They have been frugal. Even 80oz of gold/week will supply $8mill annually, and in view of operating costs (maybe not capital costs), this is a major change for the company.
5. Company valuation could be at the level of 5x net profit from placer plus the value of all the permits, so if the gold throughput improves further and GEL has a positive cash balance that funds more exploration and needs no shareholder support, there will be a steep re-rating of the share price.
6. Sites like Pig Burn and Waikaia will need extra equipment. There might be some more gear in the Dunstan Mining inventory, but just in case, I had a quick look for new GRUs. Are they out of the question for GEL? No.
NZ has maybe 3-4 suppliers of GRUs, here's one:
I was cheeky enough to ask how much, for a 100m3 unit (Model 1200). They can't keep up with demand for them at the moment, they are $150k to $180k each. In view of the money that might run through them, and the lower maintenance, new GRUs are not going to be an issue for GEL, if they have enough good permits to put them on.

[elZorro]

I've had a closer look at the TV3 video. Looks like this showed two views of cut-down GRU#1 at Drybread No.2 (Morans), and GRU#2 at Gunclub. GRU#3 was not shown, it is probably still in primer red.

Maybe GRU#1 is designed to rest in the bottom of a pond, and as the team digs down to the deeper and probably better grades, we'll see a pond forming.

Note the yellow small-scale gold separator being used in the lab on the video, looks like it processes the sample bags from the RC Drilling rig that's mounted on a truck, maybe any placer area trenching samples too.

To save myself further confusion, Garibaldi is a hard-rock discovery triggered from nearby Sparrowhawk South. It is not a placer site, because the gold is bound up in rocks. It'll need drilling, trenching and assays like WKP and Muirs.

[troyvdh]

..gee el.....the way you are going....you will be recipient of some sort of medal......somehow......cheers...troy

[elZorro]

..gee el.....the way you are going....you will be recipient of some sort of medal......somehow......cheers...troy

Troy, I'm still waiting for my embroidered GEL cap, it hasn't worked yet..
Now answer me truthfully, are you convinced to increase your stake in GEL yet? Things are changing fast with the GRUs in action, that's what I think.

More on Garvie Burn from the extensive report:

According to Miller (1966: 61; see also Tyrrell 1999: 52-53) dredging began in the early 1890s at Gow’s and Dome Creeks, but these were not a success. Another dredge, the Golden Crown, was built at Landslip in 1896 (Hamel 1998: 2; Tyrrell 1999: 52-53). This was a failure and moved to the Shag River less than two years later. Further dredging was established in the upper Waikaia area in the late 1890s and at the Garvie Burn, the lower reaches of which were known locally as Muddy Creek. A dredging boom began from about 1902 - 1903 with the success of the Mystery Flat and Muddy Creek dredges, and the use of this technology continued until the 1930s, when in late 1935 the last dredge that worked west of Freshford Plains Station and McDonald’s roads was closed down, dismantled and transported to Waikaka (Tyrrell 1999: 52 - 54). Tyrrell’s (1999: 52-53) table provides details of the names,dates and other details of the various dredges in operation in Waikaia, some of these returning the richest payouts in Southland for their investors at the height of the boom times. For some of the dredging returns, see Tyrrell (1999: 54) and Hamel (1998: 3). Although the Waikaia field was known as the most ‘productive and profitable’ in Southland, the rich lead below Waikaia that ran south to the Garvie Burn was worked out by about 1914, with many dredges closed down by that date.

That last dredge was working somewhere near the GEL EP, which is mainly west of McDonalds Road.

In 1906, here's the output from the Muddy Creek Dredge, 100 oz in a week.

Waikaia gold might be close to its source, 1890s.

This chart shows that the current gold price is about 3x the value available in 1935, when the last Waikaia area dredge was pulled out, during the depression years.

Lucky for some..

In 1910, a Californian report on the NZ Goldfields stated that the "most consistently remunerative dredging field... (see below)

A map off to the east of GEL's permit shows the rough historical positions of 10 dredges in the area, some working on the land.

[elZorro]

Here's a hybrid map of the area showing some topo detail. There is a curiously barren and slumped area just below GEL's permit space which could be where the last dredge worked, see the black ringed area. GEL has grabbed the ground beside this space, like they did at Drybread.

There is a permit covering the space where the dredge had possibly worked, MP 41772, and near the junction of Freshford Plains Station Road and McDonalds Road there is a small water race and a dam. Looks like more of a duck pond on closer inspection, and for a 9 year old mining permit there seems to be a lot of grass still available for sheep. No broken ground at all..so this mine permit restoration might be finished ahead of time.

https://data.nzpam.govt.nz/PermitWeb...x?permit=41772

[elZorro]

Here's a new suction dredge that has been built in Nelson for the Cold Gold Clutha Co. It needs about 6 people to operate it, but can only grab 30m3 of gravel from the river bed each hour. The suction nozzle is controlled by a camera from above.

http://www.odt.co.nz/regions/central...edging-project

Expecting 4 oz a day from 13 hour operation, yields about 0.32g/m3. They could go for a 24 hour licence later, but even so it's not a great grade on the face of it. I saw a very old article saying that one of the big dredges from 100 years ago recovered 1230 odd ounces of gold in a week. That was a record for river-based operations, it was probably a bucket dredge.

Extra data:http://www.commoditytrademantra.com/...0-years-otago/

At least 4 Rotary gold screen manufacturers near Greymouth..

http://www.rotarygoldscreens.com/video.html