AXG - Antipodes Gold [formerly GEL - Glass Earth]

[clifton]

More drilling results out still positive
MINE: GEL: Further Drilling Results for WKP

GEL
08/11/2013 08:30
MINE

REL: 0830 HRS Glass Earth Gold
Limited

MINE: GEL: Further Drilling Results for WKP

Wellington,
New Zealand, Thursday 7 November 2013

Glass Earth Gold announces Further
Drilling Results for the Wharekirauponga
(WKP) Gold Project, Hauraki, New
Zealand

Glass Earth Gold Limited (TSXV-GEL; NZAX-GEL) ("Glass Earth Gold or GEG") is pleased to announce the drilling results for holes 38 and 39 in
the (Easternzone) of the WKP Wharekirauponga (WKP) Gold Project, Hauraki, New Zealand.
The WKP Project is held by the Hauraki Joint Venture ("HJV") - Newmont Waihi Gold (65%) and GEG (35%) and is located in the southern Hauraki Goldfield, 10km north of the Martha Gold Mine (Newmont Waihi Gold100%).

Highlights of the drilling results include high grade zones of 1.5m at 20.9 g/t Au, 0.5 metres at 26.4 g/t Au, and 0.8 metres at 9.77 g/t Au. As well broad intersections of lower grade mineralization include 517 metres at 0.46 g/t Au plus 454.5 metres of 0.46 g/t Au.


The President and Chief Executive Officer of Glass Earth Gold, Simon Henderson, commented on the results: "With the completion of drill holes 38 and 39, the Company has completed 9,035m of drilling on the WKP property. The latest drill holes have targeted the Eastern graben structure which hosts mineralization similar to the major gold mines in the vicinity, with continuing intersections of broad widths of modest grade, and narrow high grade individual intersections.
The area continues to tantalise with its significant volumes of mineralisation, however recent resource work points to the Central/Western zones as the most promising higher grade structures to concentrate further work".

Future technical work will be aimed at improving the size and grade of the broader high grade T-Stream gold-silver vein system (Central and Western zones). The exploration team is encouraged by the high grade potential of the T-Stream system, resources by zone offering higher grade estimates; Central zone 6.6 g/t Au, and Western zone 9.7 g/t Au respectively, with significant expansion potential.

The objective is to expand the limits of these known higher grade veins, test the selected targets for the presence of additional mineralization, collect preliminary environmental background data, and conduct preliminary metallurgical testing to assist the preparation of future Mineral Resource estimates.

The WKP project, which has emerged as the company's flagship project, hosts a NI 43-101 mineral resource estimate of the inferred category of 1.3 million tonnes at an average grade of 6.1 g/t Au and 9.3 g/t Ag for a total of 260,000 ounces of gold and 390,000 ounces of silver, at a cut-off grade of 3.0 g/t of gold (news release 1 August 2013).

Cost-containment measures

In the light of the unfavourable environment that severely affects junior exploration companies, Glass Earth Gold has carried out a major cost-cutting exercise which aims at building resilience by containing its operational and administrative costs to a minimum. A major overhaul of the operations has led to the sale of non-strategic assets and a refocus on exploration led by WKP as lead project.
The team has been downsized to two full-time employees and four consultants and part-timers, which has enabled the Company to maintain
access to core skills and effectively pursue the projects.

[elZorro]

Thanks for that Clifton. Not bad grades when they hit the veins. But perhaps a bit too far apart and not intense enough to be interesting practically. Looks like they (Newmont) are going to do more infill drilling in the best known areas. This would add to the NI 43-101 estimate over time. I can't even be bothered having a look to see where those EG drills were exactly on the permit.

So now the fulltime GEL staff is down to two people, this may be Peter Liddle (Auckland) and Simon Henderson. Andrew Hamilton (IT) may be one of the part-timers, based in Wellington with Simon. Looking at it from one perspective Clifton, this is a very cheap company now (I've had a hard lesson in how cheap it is). Whether it is viable for anything in future, is the other perspective.

[elZorro]

Not good news for GEL holders, Newmont is looking at a massive downsizing of the mining staff in Waihi for a six month period starting in the middle of next year. This is presumably because the granting of approvals for the Correnso Mine took a bit longer than they'd hoped, and other mines will be out of ore soon. They have already heavily reduced the exploration staff. Without strong cashflows from the Waihi operations, it's unlikely the Newmont head office in Denver will be too excited about WKP. There is still the Waihi West area under the other part of Waihi township to consider of course.

http://www.stuff.co.nz/waikato-times...-Waihi-economy

You can see their problem: yes, they are the number two gold producer, but the true costs to extract the gold are now US$1149 an ounce overall (2012), and the market price is currently not that far above that.

http://www.newmont.com/about/company-glance

Jobs have also been lost at head office earlier this year.

And then the situation got worse, all-in costs more like US$1500 an ounce.
http://www.proactiveinvestors.com/co...oll-46526.html

[elZorro]

Sometimes you just have to call time when everything is turning against you. do you think GEL will do this?

I've been told that the company (GEL) must suffer some pain for a few months. This appears to be the feeling in Canada. I can imagine some of the more recent Brent Cook investors saying that. Newmont has not moved out of Waihi, and as they are only working in 7 countries around the world, it's still a good endorsement. Correnso is a smallish but rich find, they'll certainly work that out, and if you are a longer-term gold bug you'd think that we'll see gold going over US$1800 again soon enough. WKP would be an interesting longer-term project for Newmont, and the calls from business owners after a 6 month drop in income for the Waihi region may help to sway public opinion.

GEL has had permits on a heap of areas, possibly unlucky there weren't any massive easy finds near the surface or in the places they could afford to drill after doing the aero mapping. This meant that the funds to do more detailed exploration haven't been forthcoming since, but they also used up C$32mill of shareholder money since 2006. They definitely failed to create their own cash in the placer permits, for a number of reasons, some of which were in their control, some not.

GEL have hunkered down, left with permits near their most friendly NZ firm with capital for gold exploration - Newmont. Some on the board think that this is what they should have done all along -concentrate all the effort on just a couple of permit areas that look most promising. Very hard to do when they had a look around a big chunk of NZ, and there was lots of promise in most of it.

GEL should now be able to survive with a small amount of G&A expenses, and I think they'll wait for the gold price to move up again, just like Newmont will be watching and waiting.

[elZorro]

Yankiwi, I still have a small indicator holding in GEL, but it might make you feel a bit better to know that I lost a fair bit more on GEL than you did. They did always warn us it was a risky share. But no amount of FA work made up for the lack of real information about the true and quickly changing state of affairs. They never seemed to catch a lucky break either.

[elZorro]

elZ, no matter how much you have made or lost on GEL makes the taste in my mouth any sweeter. I think Simon might be good at finding rock in the ground that a lot of others would pass by, but that's about where it ends. IMHO he has no idea how to run a business. Placer mining was pie in the sky thinking which nearly cost me my entire investment. Maybe they should have just closed up the entire shop at that point & given us "Shareholders" the right to go down south and do a little panning of our own. That would have left a better taste and there's a good chance you & I could have been face to face with a few nuggets in our hands.

Anyways, I'm moving on with head held high. Maybe I'll find a 10/1 shot in the greyhounds and see if I can turn the $1750 into $17500, back where it all started. If that bet is placed on another preverbial "dog", it'll be a easier lesson to swallow.

Yankiwi, that is all so true. Except maybe for finding nuggets at Drybread. Sounds like the gold was very grainy and well down. Our investment was derailed, that's what happened. A bit like this dump truck. This photo never made it into the media reports from GEL..and apparently is just part of the sorry story of misadventure.

[cammo]

a mate of mine who lives down there and is a mech eng (who was up here last week) said that they bluntly refused to put in a proper road, which meant the trucks were running in deep sludge in winter and hydraulic brakes dont mind a bit of water but sludge - At 50k per truck for a brake overhaul, apparently they did like 6 over the winter due to not metalling some access road. Apparently a lot of guffaws from the local industry about goings on there...why didnt i ask earlier?

[elZorro]

Cammo, that's interesting. I was told by one GEL senior staff member posted down there, that the winter rain was unseasonably massive, and that was part of the bad luck at the site. He'd mentioned the big brake repairs, not the price of them. He never mentioned unmetalled roading. I assumed it was impractical to build better roading, sounds like they didn't even try. But it wasn't all the fault of the roading. Apparently one dump truck driver tipped his vehicle over five times before he was let go. Most driving staff learnt after the first time.

Let's do some numbers on the cost of six brake jobs, a total of $300,000 of maintenance. Each dump truck could hold about $200 of gold per load at the wash grade they found. So they'd need to extract 1500 truckloads of wash at zero cost (and that didn't happen) just to pay off the brake repairs. Ouch, that's a great way to use up shareholders' cash.

Waikaia Gold's plant in Southland has been opened by Bill English. It's using a floating GRU fed by a digger. The GRU is already down in a deep hole in a pond. 5 years of planning. This is more likely to work out OK.

http://www.odt.co.nz/regions/north-o...icially-opened

[elZorro]

Hi Yankiwi. As per usual, GEL produces a report on the last day it can legally meet. What you have posted is a short form of the full MD&A report. The full report is on SEDAR. In a few days it should be available on GEL's website, going on past performance.

Here are some other parts from that report.

Hauraki Joint Venture (WKP prospect)

Negotiations are well advanced withNewmont Mining (65%) for Glass Earth (New Zealand) Limited
(35%) to assume management of the HaurakiJoint Venture and sole fund exploration activities in order
to increase its equity in the JV.

Outstandingcash calls of $588,000 due to Newmont by GENZL as at 30 September 2013, would form
part of the overall funding for the 2014& 2015 exploration expenditures. Newmont has reserved its
position in respect of the unpaid cashcalls by issuing a Default Notice under the terms of the Hauraki
Joint Venture Agreement (“JVA”) on 17October 2013. The JVA requires that the unpaid cash calls be
remediedwithin 65 days or default dilution will occur (potentially up to a 20% reduction in GENZL’s
interest in the project).

Neavesville Prospect (GENZL was 50% - now 100%)

As from 6 November 2013, the Company hasregained 100% ownership of the Neavesville prospect
opportunity. Negotiations are underwaywith Eurasian Minerals to amend the terms of the Option
Agreement – primarily to extend the payment deadline of 31 December 2013 foran option payment of
850 oz gold (or equivalent US$’s or GEGshares – at GEG’s election).

Placer Creditors in New Zealand

On 5 November 2013, creditors of GlassEarth Mining Limited’s placer operations, totaling $620,000,
agreed to accept a mixture of immediatepayment and deferred payment terms (upto 31 December
2014) while the Company refinances.

Significant Expenses of a Corporate Nature

The Net Loss before Income Taxes for the9 months ended September 30, 2013 was $12,911,000 (9
months September 302012: $8,952,000). Placer miningaccounted for $6,932,000 of this loss.

The Company’s cash position as atSeptember 30, 2013 was $423,000 (September 30 2012: $522,000)
with Trade Payables of $1,368,000.Payment of $1,208,000 of these Trade Payables is discussed under
the Subsequent Events note on page 24.

The Companyhas reduced its staff down to its two senior executives who are taking significant salary
sacrifices. The Company has reduced itsnon-exploration expenditures and efforts to reduce other
liabilities are underway. The Company hasa history of successive capital raisings (as is usual for an
exploration company).

Related Party Transactions

Related party transactions are in thenormal course of business and are measured at the exchange
amount, which is the fair value as agreedbetween management and the related parties. The
strengthening New Zealand dollardisguises some of the salary sacrifice in C$ terms.
a) Simon Henderson, CEO, received$150,215 for the nine months ended September 30,
2013 (nine months ended September 30,2012: $158,769). Use of a motor vehicle, life
and health insurance benefits are alsoprovided.
b) Peter Liddle, CFO, received $117,879for the nine months ended September 30, 2013
(nine months ended September 30, 2012:$128,327). Use of a motor vehicle, life and
health insurancebenefits are also provided.

If investors are going to get involved again in GEL, it won't be with the same optimism that was exhibited late 2012 or early 2013. That time, everyone was surprised how freely the money flowed in (about $3mill), but at the cost of massive dilution. Some bigger shareholders possibly felt they had no choice but to participate, although Geoff Loudon remained on the sidelines. The placer assets and permits had a book value, and when the operational losses were added to the loss on sale, and permits were let go (heaps of them), the loss on the placer overall was nearly $7mill in 9 months.

Cammo has alluded to the stories coming out of the Drybread area. These are not fiction, more like a financial disaster for shareholders. One wonders how a business that had layers of admin and operational staff at that stage, continued operating with massive losses for months, and proceeded to lose even more money. Who was supervising the costs and the operational matters? Ultimately, Peter and Simon, the remaining core staff. Their inaction when it would have counted, lost all that capital.

A listed company with a more compelling proposition might be able to raise money more easily. GEL will be up against it now, and already the bigger wolves are circling, with Newmont possibly able to obtain another 20% of the WKP permit, worth perhaps a lot more than the default costs. If Glass Earth wasn't able to run placer operations, will they be any better at running an exploration campaign?

[elZorro]

Although I'm not at all interested in investing in them, I do find it interesting that nearly 5% of the GEL shares issued are currently on the ask side for 1c on the TSX.

GEL TSX.

So my figures say that for just over $50k CAD you can have your very own SSH notice issued, without waiting, telling everyone you own 5% of them. If you have a bit of patients then possibly you could get your notice for half of that amount.

IMHO, If WKP held any future promise, wouldn't Newmont be grabbing all the nearly free shares they could? $50K CAD to Newmont is probably as important to them as a 50c coin is to one of us.

GEL, or what ever it is they're calling themselves now, will not be seeing even my 50c coin as an investment in their dream.

Not so Yankiwi, there are 5mill shares on ASK but they are at a range of prices, so they'd move upwards pretty fast should anyone decide to buy some. At 0.5c the entire company is valued at just $500,000, but already it looks like it's made a solid move to 1c. What would you get for C$1mill? A lot of box files on alluvial work, exploration reports, old wages bills, equipment bills, permit costs that are now irrelevant except to wider NZ as some of that data will end up with NZPAM. When the gold price moves up a bit more, smaller operators will make something out of it no doubt. But there is also the IP for the Coromandel permits, the new members and energy on the board, and of course the permits themselves. These are the best permits - the ones that are left - they are the select few from over maybe 60 permits that have been held.

I'm grumpy about losing some investment dollars on GEL too. But I won't be surprised if GEL/Antipodes recovers from this hiatus, and of course if it does, some money will be made by savvy investors who will buy in at the appropriate time. I try and make it a rule to never lose money on something I've invested time and cash into, I have learnt a lot from this process, and often apply that to other things I have a go at. So while I might not get back the losses on GEL with the new Antipodes, I will weigh up their proposition with other investments I could make.

Why did we get involved with GEL in the first place? To be investors in a greenfields explorer for hard rock gold in NZ. They may have wandered off the track a bit, but they still have something fairly interesting that needs checking out further. WKP.