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  1. #761
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    Gonzo, Yankiwi, you were both right, the quarterly report was technically out before the end of the month.

    http://www.marketwire.com/press-rele...el-1732154.htm

    This link doesn't include the MD&A report, which will become available on SEDAR first I'd guess. As indicated in the latest background pdf posted in the GEL website, gold production has increased significantly. The icy winters in Otago naturally limited output over those three months, the bigger GRU#1 took a fair while to get going properly, and there must have been a lot of setup costs, which the report says were expensed in the quarter. So this is a different treatment from exploration of permits, where the cost is only expensed once the permit has been surrendered.

    The gold production was worth over C$1mill, but cost about another $300,000 of cashflow on top of that, in the quarter. That's probably a really good result, all things considered. I'll wait for the MD&A data.

    Revenues from mining operations increased significantly for the quarter to $1,079,000 (June quarter: $349,000) but was less than budgeted due to the extended commissioning of the GRU#1 plant and lower 'wash' grades for both sites. Mining and processing costs were higher during this settling down process which coincided with 2 of the 3 months of winter in the South Island. Gold production in September and October was considerably higher than the winter period and the December quarter is expected to increase further.

    All commissioning costs have been written off as incurred. The increased production in September - November has resulted in a turnaround to monthly profits. Attention will now focus on costs reduction, which combined with a move to higher grade areas for both sites, should see a marked improvement in cash generation and profitability.
    This quarterly report was preceded by another press release - there is another Private Placement happening at the moment. The buy-in is at C16c, with future 1 for 1 warrants at C25c. The aim is to raise C$3mill for Neavesville and WKP exploration work. This should all be completed by December 6th.

    It's not immediately good news for current GEL shareholders, but I've followed the story of this company for a few years. Now a fairly useful employer in NZ, has trained and offered employment to geologists, ramping up gold production with its own assets, has big interests in two or three promising mine sites near Newmont's Waihi mine - we could all be looking at a great opportunity for capital gain from this point.
    Last edited by elZorro; 01-12-2012 at 08:44 AM.

  2. #762
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    It's good to see the big increase in revenue! But the costs are certainly weighing them down.

    So in relation to the PP, if the SP goes below C$0.16, then there wouldn't be an advantage to buying the PP shares, right?

    I'm not sure I understand, I thought the PP would be at a bit more of a discount to entice buyers...

    Or, is the benefit that if the SP goes above C$0.45, the PP buyers can still exercise their purchase warrant to buy what they are entitled to at C$0.25?
    Last edited by gonzo56; 01-12-2012 at 08:15 AM.

  3. #763
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    Yes Gonzo, the market might take the price of GEL below C16c equiv for a short while, but it won't go very far below that. The warrants could be extremely valuable later, and 1 for 1 is GEL's normal deal, but this is generous compared to other similar companies looking for cash on the TSX. The PP price must have been a compromise, based on what indications were from big investors recently, combined with feedback from current investors. This is a big dilution effect, the Mcap could be in theory held at C$16mill for a while, does that sound cheap for a company with permit assets and an unusual cashflow from placer mining?

    Going forward, I'd like to see massive short-term effort in the promising placer business section, as a few million spare cashflow each year will halt the dilution, and give the company time to arrange more structured capital raisings for the longer term important exploration work, if needed.

  4. #764
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    yeh i agree with ez, if your looking for something long term (lets face it, thats what GEL is) its a very good PP offer. Think of it logically, this is the first time in the companies history where it is generating a fairly decent income and with time the costs of generating that income will reduce once procedures are put in place and the funding required to start this measure isnt listed anymore.

    Also im hoping something is going to eventuate from WKP within the next 24 months, all the signs are there its just a waiting game now. But thats just my opinion, I'm a young investor and GEL was one of my first purchases so i think i may be a little attached

  5. #765
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    Quote Originally Posted by bucko View Post
    yeh i agree with ez, if your looking for something long term (lets face it, thats what GEL is) its a very good PP offer. Think of it logically, this is the first time in the companies history where it is generating a fairly decent income and with time the costs of generating that income will reduce once procedures are put in place and the funding required to start this measure isnt listed anymore.

    Also im hoping something is going to eventuate from WKP within the next 24 months, all the signs are there its just a waiting game now. But thats just my opinion, I'm a young investor and GEL was one of my first purchases so i think i may be a little attached
    I haven't been investing in shares for that long either, Bucko. Certainly this company keeps me interested, always something going on. What little I know about private placements could be written on a postage stamp, but it appears there is no minimum subscription amount, and as there is no prospectus and you're buying new shares, there is some kind of a qualification form to fill out. I would expect McDouall Stuart to be able to supply further details, as they handled the IPO.

  6. #766
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    The MD&A report is available on SEDAR. It's 33 pages, quite detailed and covers the last 9 months. Some of the charts from the lastest presentation are included. It states that the CVR permits (Taupo-Rotorua area) were very reluctantly relinquished in Q1,Q2. I remember that the IPO prospectus text (2006) held high hopes for the area. It's so big, every expensive drill has to be in the right place.

    A bit of work has occurred at Garibaldi in Otago, drilling in Q1 2013, shallow holes. No extra assay data from WKP, as expected. The finances show a tightening cashflow position, but that has been sorted out with the PPs since.

    A mental graph of placer income against time will be one of the most heartening aspects of the report in the short term. There is no rental equipment cost at all, in the placer operation. All costs were expensed, so naturally enough there was a small shortfall over the last quarter. It'll probably be the last one, as September's work made a clear profit, and the gold recovery has jumped up to a stable result near 80oz a week from two GRUs, since. There is a spare GRU on the Drybread site, brought over from the Gunclub permit. The MD&A says it was relocated to find better grade areas. The weather will be a lot better for the next few months too.

    http://www.sedar.com/CheckCode.do;js...1D1YxhUokJg:-1

    The Southland Times provides a bit more detail about Drybread.
    Last edited by elZorro; 02-12-2012 at 04:26 PM.

  7. #767
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    NZX market announcement made this morning, will be interesting to see how the market reacts, increase income but the PP may dampen any potential gains

  8. #768
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    Am I right in that these are only for the Canadian shares? Why not both the NZ and Canadian shares? I thought its time I started asking more questions as I really am just learning, so apologies if they seem a bit obvious to others

  9. #769
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    Quote Originally Posted by delboy View Post
    Am I right in that these are only for the Canadian shares? Why not both the NZ and Canadian shares? I thought its time I started asking more questions as I really am just learning, so apologies if they seem a bit obvious to others
    Hi Delboy, no, the shares are identical, just the exchange rate changes the price in theory. You can buy shares on the TSX and bring them back to NZ with some paperwork. I'm not sure how the PP would go, most likely you could buy NZ shares if dealing with a NZ broker. The PP work is generally done overseas as the bigger exploration investors are over there.

  10. #770
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    Thanks EZ I use directbroking so dont really have a broker to ask...although they do also answer questions when Im really confused as in LME takeover bid! Hopefully I learn faster than my mohlah disappears! Not as easy as it first seemed (beginners or blind luck). Pike blew up, PPP doesnt seem to move (although I appreciated the dosh return), NTL dilute and slack around like HGD and now LME may be takin for a song, but Im learning!! Dont hold all the time, sell when ya gut says sell and buy only what you can afford to lose (not that I wanna lose any any of it!).

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