More history - here is the Hartley and Riley dredge which was on the Clutha River gathering staggering gold amounts, from about 1898 to early the next century. This is an early photo, before the covers went over everything. You can see a trommel (the rotating screen) and the massive riffle areas should be where the two blokes are. The elevator to the left would have dumped the washed rocks and gravel back into the river, or onto the banks maybe. Not sure how they got the gravel from the river bed up into the top of the trommel, but it looks like this was an early example of a bucket dredge, which was quickly copied by other startups once the dredge began recovering over 1,000 oz of gold in a week.
This whole huge structure was run by a 10HP or 12HP motor, probably a steam engine.
The Lady Ranfurly dredge, an electric powered unit, apparently obtained the record weekly production of 1234oz in 1900, on the Kawerau River, now Lake Dunstan. It eclipsed the recent record of the Hartley and Riley dredge. http://thefieldofgold.blogspot.co.nz...rom-river.html
Glass Earth was on the TV3 news again this morning. It looked like a spare bit of video footage from last week, cobbled together in a similar article. So I'm unsure what that was all about. Short of new news?
This time the weekly recovery amount wasn't mentioned, but it was stated that each of the three GRUs is processing about 50 cubic metres per hour. They won't all be running 24/7 of course, but it helps with estimating the returns. Here's the video..
Text of the story..
(The item might have been about redressing some perceived treatment of the topic, there was a lot more about finding a hard rock deposit at the end of the item, that being the main object of the company).
Just spotted that Glass Earth has been granted Kakanui, permit PP53297. They'll need to take 200 BLEG samples, 200 gold pan samples, and 20 shallow gold drills within 2 years. No problem. The permit is 533,950 hectares, stretches way over the top of Macraes Mine.
Maybe they've been looking here already, see the Q1 2012 report:
A first pass program of stream sediment sampling was started in the
Kakanui Range (north-east Otago). 84 samples have been collected to date with 250 remaining.
So GEL now has 6801.81 km2 of permits, another 2121km2 in the pipeline.
Not too much has been happening with the CVR permit areas Glass Earth holds. I remember GEL has a wholly owned company (Glass Earth Geothermal Ltd) connected to the geothermal side of the permits. They decided to put this on the backburner in 2009, because they can't secure the IP under current rules.
The implication is that Glass Earth knows of some prospective new geothermal sites, and maybe one day these will be worth something too.
Waihi Gold (Newmont) has dropped EP40687 recently, this was a small permit around Golden Valley Road, a short drive away from, and east of the Martha Mine in Waihi.
The Manuherikia and Ida valleys are fully allocated for water uptake. The govt is part funding a search for new water sources and management systems. Funnily enough, the water allocation is related to mining use until 2021, must be an historical thing. I'm wondering if the data that Glass Earth provided from their aerial scans has been of any help here. GEL is placer mining in both valleys.
Here's the text, and I think the last line is encouraging: management are not wanting any more firesales in future, the placer gold should provide the bulk of the funding.
Grade is king, GEL should catch a good break there sometime.
It's near the end of July, and Glass Earth set a target for placer production of about 84 to 100oz/week by the end of the month. After the newer placer sites get up and running, the target is 144oz/week (7500oz/year). I dug up an old email from Simon Henderson, which I've already posted.
February 2012: In alluvial production we quote grade in grains per cubic metre, not grams per tonne. (A grain is roughly 1/15 of a gram, and there are about 2.5 tonnes of gravel wash in one cubic metre).
We'd regard a grade of 3 grains/m3 as an acceptable cutoff point for profitable mining (high volume throughput, no crushing, gravity separation and so on all mean that far lower grades than that needed in a hardrock environment can be profitable), but of course can run into far more than this on richer leads - in fact we will have on occasion run into 3"g/t" ground..
Given the small size of these deposits and the difficulty and expense required to define an official resource (plus the sensitivity our JV partner has required us to have towards reporting grades in Otago, based on keeping results confidential to each landowner) it makes more sense to have a solid estimate of projected ounces per week production, and then the total net revenue we are achieving - net profit from alluvials measures for us what these deposits are worth in terms of what they add to our company. 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.
Here is where the maths gets interesting (but not hard!). 3 grains/m3 is roughly the same as 0.2grams/m3. Each GRU processes 50 m3 per hour when it's online. Since it takes almost exactly 3 hours for each GRU to produce an ounce of fine gold flakes at the minimum cutoff grade, then the approximate running costs for a GRU is about US$300 per hour (we've also been told the cost of each ounce is US$900). The cutoff grade will change if the price of gold goes up or down, but it is low compared to other mining methods.
$300 needs to cover the wages of about 3-5 staff per GRU/hr, any downtime costs, maintenance, fuel. All GRUs need to contribute to the monthly settlement payments for Bob Kilgour, and at each site the landowners will have a small percentage (unknown, left out of my calcs).
But assuming GEL didn't drag the GRUs out there for anything less than the minimum cutoff, then running GRU#1 for 24/7 hours, and the others for about 60 to 70 hrs/week, will recover the gold they are talking about. There would be an annual profit of about US$2.6 mill at 100oz/week, at the lowest grade.
However, if Drybread sites offer 0.4grams/m3 of gold, the annual net profit from just the sites and gear they have going now, would be US$8.6 million. That's enough for everything that they normally do in a year, all paid for.
To put this into perspective, each excavator scoop of 1 m3 needs to be fed to a GRU at about once a minute. The dry weight would be about 2 tonne, 2.5 tonnes wet. At the minimum grade, 3 grains of gold (0.2 grams), needs to be present. A single .177 lead slug pellet weighs about 9 grains, or 0.6 grams, so that small weight of gold per m3 is three times the cutoff value.
Note: gold is about 70% more dense than lead, so Glass Earth are hoping to see no less than 1/3 of the weight of a slug gun pellet (in gold) in each scoop, and 1/5 of the volume of the pellet.
L&M Energy confirms consummating Alton Block deal with NZEC 18 July 2011 The active petroleum and coal seam gas explorer L&M Energy Ltd (ASX & NZX: LME) last week announced reaching an agreement for AGL Energy Ltd to sell its 50% share in PEP 51151(the Alton Block) to New Zealand Energy Corporation (NZEC).The deal would be subject to gaining New Zealand ministerial consent.
L&M Energy earlier said NZEC agreed to fund 100% of L&M’s share of expenses in the currently drilling Talon-1 oil exploration well – estimated at $1.75 million, including $250,000 of completion costs in the event of a discovery. L&M Energy would retain its existing 50% interest in PEP 51151. Talon-1 is the first well to be drilled on the permit which is in the onshore southern Taranaki Basin “which also contains multiple further targets.”The joint venture is targeting mean reserves of 2 million barrels of oil recoverable in the shallow Manutahi Sands in a structure geologically identical to the adjacent Manutahi oilfield operated by Origin Energy. NZEC is a subsidiary of a privately owned Canadian company which earlier this year appointed well known NZ petroleum sector consultant Ian Brown of Ian Brown & Associates as an executive.
NZResources.com said in February that NZEC was going to focus on oil and gas exploration in NZ with a focus on exploring for both conventional and unconventional oil and gas in proven, but under-explored areas.
Why post this here? Ian Brown's consultancy was in the mix when Glass Earth first started up, and Ian was a director of Glass Earth. Geoff Loudon owns a good-sized chunk of LME, and has recently stumped up $5mill for LME to continue other gas/oil drills. The most immediate one of interest could be Kahili-2, a new drill into an already proven (but disappointing first well) field that has gas/oil takeoff plant ready to go.
Geoff Loudon has sizable interests in Glass Earth Gold too, so both will be keen to see how the rest of 2012 shapes up.
NZEC is listed on the TSX as ticker NZ. It has raised $85.5mill since the IPO in August 2011. It has its own gas production station tied in to a gas line, at Waihapa. 50% share of Alton Permit, soon 65% etc.
In March 2011 NZEC bought Ian Brown Consultancy, and the staff work for NZEC. This company was only conceived in 2010, they have moved very quickly.
Stock-based compensation for the year ended December 31, 2011 totalled $2,203,548 compared
to $9,996,000 recognized in 2010. Of the total non-cash charge for the year ended December 31,
2011, $1,000,000 related to the IRBA asset purchase agreement, on the valuation of the shares
issued, that was executed on February 21, 2011.
IRBA Agreement The Corporation entered into an asset purchase agreement with Ian R. Brown Associates Limited ("IRBA"), a private company owned by the COO, pursuant to which the Corporation acquired certain of IRBA’s assets, including geological data, office equipment, personnel and an office lease in Wellington, New Zealand. In consideration for the transfer of the assets, the Corporation paid $400,000 and issued 2,000,000 common shares to IRBA, at a deemed price of $0.50 per common share (Note 12a).
The AusIMM conference is on in Rotorua this month, the main part of it being from 27-29th August, in Rotorua. Here's the programme.
There are some industry heavyweights speaking at the morning sessions, including Mick Wilkes (OGC), Glen Grindlay (Newmont Waihi), Chris Baker (Straterra) Geoff Loudon (L&M Energy, L&M Mining). The chairman of the organising committee is Tony Christie (not the singer, the scientist from GNS). Dr Christie was the lead author in papers on the WKP area and the Coromandel.
Simon Henderson has a 20-minute slot on the first afternoon, where attendees have a choice of two sessions. He has chosen to discuss the Garibaldi discovery process, which could be a heads-up for that hard-rock area. On another day an Otago University student, James Stewart (who may or may not be of Scottish descent..) will discuss the morphology differences in placer gold between Nevis and Garibaldi.
That's something else GEL is good at, providing placements for geology students by the look of it. There will be another session by GNS covering new geothermal discovery work near Taupo. So plenty of links here to GEL, including some time spent on the blind Correnso deposit in Waihi, which may trend towards a GEL JV permit with Newmont.
Here we are at the start of August, another month gone and with no press releases of any useful kind from Glass Earth Head Office, I'm wondering what planet they were on when they promised better feedback for shareholders on their operations. They're obviously beavering away at Drybread and Gunclub, and in view of the effect a lowered bank balance regularly has on the shareprice, are they doing well down there or not?
On having a look at the news releases page (which is only noting the "good" news releases), this is perfectly normal.. one month or more gap in news after each closing private placement, of which there have been a few. http://www.glassearthgold.com/s/NewsReleases.asp
This could just be a coincidence, that once the bank balance has been restored temporarily, there was nothing to report to the market. Just in case they don't know, yes, we're out here, waiting for news.
I've taken a wild guess at what hours the GRUs could be doing in the future, used the $300 an hour operational cost for each, and even after paying out for the equipment purchase price, there should be a good profit left at the cutoff grade. Of course, like any business, many costs are fixed, and so the profitability goes up once the overheads are covered. Here's a graph showing that effect for GEL's placer, if the grades go up.
I have left off any profits from new areas not even started yet, but these could also help a lot. As for the grades, Waikaia had one drillhole tested at 15g/m3, but we have not been supplied average grades for any of the permit areas. But let's hope they'll do better than the cutoff grades on most permits. That profit would certainly keep them in cash for each year's exploration and admin needs, and would lead to a rerating of the shareprice.
A bit of perspective: the true shareprice is 20% of that asked for during the IPO in 2006. Current EPV is about $18mill, no increase after all the new shares added. An average grade of 0.4g/m3 could produce more than the projected 7,500oz per year from all current and near-term placer permits.
But the first graph does point out one thing: the grades they find there on the placer permits have a lot to do with the immediate cashflow of the company.
I've added a chart of the annual ounces that would be produced by higher grades. GEL is bound by TSX and NZX rules to be relatively conservative in their data outputs to the market. However it is true that two other placer deposits being worked in Otago by other parties appear to have grades around the 0.2 to 0.4g/m3 mark, based on the data provided. But Glass Earth will have the biggest choice of sites in the country, and if one site has markedly better grades than the cutoff, the strong cashflow would allow more resources to be employed there quickly.
Newmont Waihi has started to be a bit more public about the prospects at WKP, at an industry conference. This could be fairly important, via NZResources.
Newmont Waihi Gold Limited
8 August 2012 Higher grade targets identified at WKP by Ross Louthean
The usually coy nature of Newmont group about the progress of the WKP gold find near Waihi wasn’t evident with the positive comments made by a senior executive at Diggers and Dealers in his presentation on the Asia Pacific operations...
Mining Weekly had this report. Which Waihi underground mine in 2016? It's probably Correnso. But there must have been some mention of WKP too.
Jeff Huspeni has been an exploration geologist, and has visited Waihi since his new appointment as VP of the Asia-Pacific region for Newmont in 2011.
Higher grade targets identified at WKP
Ross Louthean — 8 August 2012
Operator for the exciting WKP gold discovery near Waihi, Newmont Waihi Gold, has been able to identify potential high grade zones at the prospect which may accelerate exploration.
At the Diggers & Dealers Forum in Australia’s gold capital of Kalgoorlie, Newmont Asia Pacific’s senior vice president Jeff Huspeni told NZResources.com that recent diamond holes into the prospect had identified what could be a feeder zone.
There would now, he said, be a focus on adding grade to what appears to be a large system.
Newmont owns 65% of WKP with the balance held by active New Zealand gold explorer Glass Earth Gold Ltd (NZAX & TSX-V: GEL).
NZResources.com suggested to Huspeni that WKP was perhaps the most exciting emerging gold discovery in New Zealand. He did not disagree.
In his presentation on the Waihi Golden Link project, Huspeni said the company was advancing the Correnso and Martha Deeps projects and it was projected that Correnso-Martha Deeps would cost $US240-250 million to develop and would achieve operating costs in a range of $US800-$US900/ounce.
The company was targeting starting a Martha exploration decline in the second half of this year, once permitting was obtained.
Currently Newmont Waihi Gold’s focus is on finalising operations on the Favona Lode underground mine and advancing development of the nearby Trio underground operation that will provide an operating life before Correnso comes on stream possibly late in 2014 or early 2015. Huspeni said the Waihi Golden Link project was aiming for production in the range of 100-125,000 oz per annum.
Newmont Asia Pacific's production from its region – taking in mines in Western Australia, Northern Territory, New Zealand and Indonesia – was targeting 2012 production in the range of 1.73-1.8 M oz and operating costs ranging from $US800-850 M, and attributable copper production of between 145-165 M lb.
A pearl for the Australian operations remains the Callie mine in the Northern Territory’s Tanami Desert, a region that has produced 8 M oz, with 75% coming from Callie where the company is now sinking a deep vertical shaft to access deeper ore positions on this durable and high-grade mine.
Deep intersections on Callie Deeps have included 10 metres @ 23.3 grams/tonne gold, 45m @ 28.8 g/t and 43m @ 11.5 g/t Au.
Exploration near the mine has outlined the Oberon discovery which Huspeni said had “Callie-like” mineralisation and that this “exciting” target could expand the inventory of open-pit and underground mineralisation.
He said the Callie Deeps shaft would also provide potential access to deeper ore in Oberon.
The other major Australian asset was the 50/50 joint venture on Kalgoorlie’s Super Pit – which again holds the crown as Australia’s largest gold producer – where in the six months to June attributable production to Newmont was 175,000 oz.
Attributable reserves at the Super Pit were 4.4 M oz.
Another global giant Barrick Mines is the project partner.
In the quest to contain operating costs the now-imposed carbon tax by the Australian Government would, according to MiningBusiness.net add a per annum $US36 M to operating costs within the country, and for the relatively new Boddington mine it would represent between $US24-27 M. Attachments
Newmont's Diggers and Dealers presentation. (Adobe PDF File)
Newmont is determined to replace all reserves as they are mined, and to increase production to reduce per ounce costs. In perspective, Boddington is a big mine already, 1Moz having been recovered within 1.5 years. But if WKP can step up to this kind of output, it would make a big impression on gold mining in NZ. Maybe this WKP feeder zone is the undisclosed results from the lower half of drill WKP31.
Reply With Quote
Bookmarks