AXG - Antipodes Gold [formerly GEL - Glass Earth]

[elZorro]

The high NZ dollar and steady gold price has mothballed and probably closed the Earnscleugh project. That's bad news, shows how hard it is to extract these alluvial deposits at low grade.

20/8/2014 — Gold
Earnscleugh dredge mothball hits local economy
By Simon Hartley
A depressed gold price and the high New Zealand dollar has forced the privately-owned Earnscleugh alluvial gold project near Alexandra to close - stripping 35 jobs and millions of dollars from the local economy.
The loss of the more than five-year-old project - considered to be the largest alluvial gold operation in the country - will hit the local economy hard, being one of the area's largest employers.
Sole director Geoff Loudon of Mintago Investments Ltd, part of the wider L&M Group, said the operation had succumbed to the prevailing low gold price, but more so, to the high New Zealand dollar.
“There's still more gold there, but it's been marginalised by the combination of [the gold] price, and New Zealand dollar,” he said.
The depressed gold price and rising production costs had similarly prompted hard rock miner OceanaGold Corporation to lay off about 270 staff and contractors, at both its West Coast (Reefton) and East Otago (Macraes) gold mines in recent months.
The Earnscleugh start-up phase of the project has been estimated at $3 million, with the company claiming about $10 M was spent in the area annually while, by 2012, the project was averaging about 750 ounces a month from Earnscleugh flats.
Only last December, the project owners had confirmed they were considering seeking an extension to continue mining past the consented April 2016 deadline.
Dredging for the alluvial gold started in July 2009 on the 150 hectare site, and had built into a 24-hour operation at Earnscleugh; targeting more than 110,000 ounces of gold during the seven-year project.
Geoff Loudon said the high kiwi dollar meant the $NZ gold price per ounce was reduced from $NZ2,000 to $NZ1,500 per oz.
“This [high dollar] has continuously been challenging the viability of the mine,'' he said.
While gold mining will cease within a month, there is a further six months of remedial work to restore and return the area to pasture grassland, he said.
L&M owns more than 400 ha of land in the immediate area, but no decision had yet been made on selling it, or whether the dredge will be sold or dismantled, L&M Group chief financial officer Shirley Herridge said.
It was “incredibly unlikely” the project could resume if the gold price strengthened, because the costs to re-start were prohibitive, she said.
L&M, which began as Lime & Marble in 1930s, is estimated in the past three decades to invested more than $50 M in exploration around Otago, Southland and the West Coast.
Loudon said since the operation started, the New Zealand and US dollar exchange rate had increased from US65c to US85c and there was no certainty where it would be long term.
Gold hit a record $US1,921/oz ($NZ2,262/oz) in September 20011, which encouraged many small mining operations to resume or kick-start production. However, during the past six months the gold price had been drifting around $US1,300/oz, or less; trading at $US1,299/oz on Monday.
At less than $US1,200/oz where it slumped last December, even the major high volume mines around the world come close to being commercially impaired.
The tenement at Earnscleugh flats had never been mined before, but was near the historic Earnscleugh tailings reserve, where gold was mined through the 19th and 20th centuries. The project had planned to move 32 M cubic metres of overburden soil, and wash about 14 M cu m of gravel.
“We'll rehabilitate the mine site for future agricultural use, leaving the land in a better state than when it was acquired,” Loudon said of the restoration; part of 132 resource consent conditions imposed by local councils.
“Continuous rehabilitation has been ongoing since 2012, creating quality pasture from previously unproductive land,' Loudon said.
He said the land restoration mirrored L&M Group's rehabilitation programmes at earlier projects at Glenore, Nokomai, Arahura, Rimu and others, which began in the 1990s.
Loudon wanted to thank everyone associated with the project during the past five years, including councils, local community, contractors and staff.
“Their hard work and enthusiasm under difficult circumstances has been appreciated''.
In January last year the company's 30m long by 12m wide, 400 tonne gravel dredge sank and took about 10-weeks to refloat, and had its diesel plant switched to electrical at the time.
Loudon said that this change had driven costs down from about $350,000 to $225,000 per month.
The Earnscleugh project operates under the wider L&M Group which in recent decades had been exploring for oil, coal and gas around Otago and Southland.
Mintago's majority shareholder is L&M Earnscleugh Ltd. A year ago Loudon made a successful almost $13 M takeover bid for dual listed L&M Energy, and delisted it from the NZ and Australian bourses.
*Simon Hartley is senior business reporter and assistant chief reporter for the Otago Daily Times.

[elZorro]

Damn, just as the NZD is about to tank and gold has settled @ $1300 USD p oz!

Since some/all remaining profit has to be spent on reinstating the ground (upgrading it to good pasture), the importance of this event for AXG is that a previous source of funding from an enthusiastic shareholder, could be at an end.

[elZorro]

Thanks for that, Yankiwi. It's a shocker. Here's how you can now buy shares in AXG for NZ 2c. Stump up with some much needed capital to keep the show going. You know, I effectively paid a lot more than that in the last capital raising, and it was so successful for them that they didn't really want my meagre cash. Relatively speaking. But now, $40,000 is a big deal. Welcome to the real world.

There is also a report on SEDAR, for up until the end of June 2014. This states that the company is not a going concern, had $4,000 in the bank at that stage, but owed a lot more. It also 'lost' another $120,000 in the last 6 months.

Non Going Concern
These financial statements have been prepared on a non-going concern basis.
For the six months ended June 30, 2014, the Group had a net loss of $120,000
(six months ended June 30, 2013: $12,105,000), working capital deficit of
$1,768,000 (June 30, 2013: working capital deficit of $1,641,000) with an
accumulated deficit at June 30, 2014 of $38,852,000 (June 30, 2013: $35,952,000).

(Tabular amounts in thousands of Canadian dollars)
For the six months ended June 30, 2014
Page 8 of 27
The Group has been unable to obtain sufficient financing resources to allow
the Group to continue in operational existence for the foreseeable future.
Accordingly, the financial statements have been prepared on an alternative
basis. The Group has continued to apply the requirements of IFRS and NZ
GAAP taking into account that the Group is not expected to continue as a
going concern in the foreseeable future and the net assets are valued at their
realisable value where applicable. In addition the assets have been presented
in order of liquidity in the Statement of financial position.
The recoverability of the carrying value of mineral properties and the
Company's and Group’s continued existence as a Going Concern is
dependent upon the ability of the Company and Group to raise additional
financing, the preservation of its interest in the mineral properties, the
discovery of commercially recoverable reserves, the achievement of profitable
operations, and/or the Company's and Group’s ability to dispose of its
interests on an advantageous basis and, controlling expenditure. The business
of exploring for and mining of minerals involves a high degree of risk and
there can be no assurance that current exploration programs will result in
profitable mining operations...

They also noted that even the accruing tax losses are not recoverable for certain in future, as they have to trade through, to hold them. This outfit needs a white knight with a tax problem, pronto.

[elZorro]

The interests of Geoff Loudon (New Dawn) have offered a short-term overdraft facility to NZEC of up to $5mill. It's in place until March next year. This is presumably a safer bet than Earnscleugh or AXG.

26/9/2014 — Oil and Gas
New Dawn loan for NZEC’s Taranaki exploration

The Canadian petroleum company New Zealand Energy Corporation (NZEC) has gained a $NZ5 million loan which it says is the first step of a capital rebuilding process.
The company (TSX-V: NZ; OTCQX: NZERF) said it secured the loan from New Dawn Energy Ltd, a company linked with project partner Christchurch-based L&M Energy Ltd and its principal Geoff Loudon.
NZEC said this week that the working capital facility, for up to $5 M, is from New Dawn which it described as parent of L&M Energy, which is NZEC’s 50% partner in the Tariki, Waihapa and Ngaere (TWN) licenses it acquired last October.
L&M is also NZEC’s 35% partner in the Alton exploration permit, also in the Taranaki Basin.
“New Dawn’s willingness to advance funds is a strong vote of confidence in both the quality of the TWN Assets, and the ability of NZEC’s team as operator of the assets," said NZEC chief executive officer John Proust.
“The additional working capital will allow NZEC to undertake the activities required to further exploit the TWN Licences, with the objective of increasing oil production.”
For the past year, NZEC said it has been focused on increasing production and cash flow in the Taranaki Basin since closing the purchase of the TWN petroleum mining licenses from Origin Energy Ltd (ASX:ORG) last October.
A tightness on capital last year, not helped by high operating costs at the time, resulted in L&M Energy coming in as a 50% partner on the TWN leases and the Waihapa production facilities.
NZEC said this week it has focused on workovers and uphole completions on the new licenses, a significantly cheaper task than drilling new wells, that if successful, could easily tie into its Waihapa production station using existing infrastructure.
With the new capital, NZEC has the opportunity to expand on its strategy. It has already found four other production opportunities in existing wells on its TWN licenses, along with several new 3D drill targets in four different oil formations.
The Canadian company said it was also reviewing an opportunity at the Waihapa station that could allow liquefied petroleum gas to be extracted, bringing in additional revenue.
“NZEC has made progress in 2014 to right-size the business, reduce operating costs, and focus on its most promising assets in both the Taranaki and East Coast basins," said Proust.
"With this inflow of capital, NZEC’s technical and operations teams can apply the insight gained from nearly a year of operating the TWN assets to advance additional production and cash flow opportunities.”
So far, the company has advanced a total of 12 wells to production, including eight on its newly acquired TWN licenses. All of the TWN wells produce light ~41o API oil that is delivered by pipeline to the Waihapa production station and then piped to the Shell-operated Omata tank farm in New Plymouth, where it is sold at Brent pricing less standard Shell costs.
The loan facility, to the extent drawn down, will bear interest at 12% per annum with a maturity date of March 31, 2015. Interest is payable monthly, NZEC said, or may be capitalised with New Dawn's consent.

[elZorro]

Skevington Contracting has dropped a lot of EP53182, this formerly surrounded the Drybread alluvial mining area, but is now reduced to two interesting pockets at Matakanui and Cambrian/Blue Lake areas.

http://data.nzpam.govt.nz/PermitWebM...p?permit=53182

[elZorro]

The reasonably large dredge at Earnscleugh is being dismantled by L&M Mining. 13 staff have been retained to complete restoration of the farm around the site of mining (temporarily on hold for resource consent), and the others have all found work.

http://www.odt.co.nz/regions/central...ind-other-jobs

[elZorro]

For nostalgia's sake, here is an update on what Drybread looked like in early 2013. At this stage GEL still had hopes for the area, they were going to have a tough winter and cripple all their trucks in the mud, losing well over a million dollars of shareholder funds. Within a few months most of the workers were laid off, and Skevington Contracting picked up the pieces. Eventual loss for GEL was about $4mill.

Courtesy of google street view.

[elZorro]

Newmont Gold is progressing with the Correnso South orebody, located under Waihi East township. The glimmer of hope for AXG holders is that this orebody continues into the Southwest area of Waihi township, where AXG has a permit. It's one of the very few that is still current.

ftp://www.waihigold.co.nz/httpdocs/p...ate_061114.pdf

[elZorro]

It looks like AXG has been let off the hook over more commitments to Neavesville. I wonder who the mystery investor is?

17/11/2014 — Gold
Eurasian strikes new deal on Neavesville
By Ross Louthean
The Canadian mineral royalty company Eurasian Minerals Inc has struck a new deal on its Neavesville epithermal gold-silver project near Waihi in the Hauraki goldfield.
Eurasian Minerals (TSX-V: EMX & NYSE MKT: EMXX) said it has struck an agreement with Australian privately-held company Land & Minerals Ltd which it dubbed “L&M”.
There is a coincidence, but perhaps no more, in the fact that the previous company planning to acquire Neavesville was Glass Earth Gold (now Antipodes Gold Ltd (TSX-V & NZAX: AXG) which before its name change and management change had the support of Christchurch-based Geoff Loudon who is principal of the NZ petroleum, coal and gold company L&M Group.
At the time Glass Earth dropped out of the Neavesville play it was running tight on capital and Geoff Loudon’s group was expected to either take up equity or have some other involvement with the prospect.
However, it all lapsed so Eurasian Minerals began looking for a new partner or acquirer of the property.
Eurasian Minerals said it had given Land & Mineral the right to acquire its subsidiary Hauraki Gold Ltd which controls Neavesille.
Hauraki Gold has also entered into a joint venture agreement and access agreement with the Pakirarahi 1B Trust, which controls surface rights across a majority of the project area.
Under the deal Land & Mineral must:

• Reimburse Eurasian $C100,000 ($NZ112,000) exploration costs.
• Make payment of 75 troy ounces of gold by the second anniversary of the agreement date.
• Pay 600 oz of gold1 within 30 days of the third anniversary of the agreement date.
• Undertake at least 3,000 metres of drilling in the first three years after the agreement date.
• Further payments at the rate of 100 oz of gold per annum beginning with the third anniversary of the agreement until a start to commercial production, which may be credited against a deferred consideration.
• Agree to pay amounts equivalent to 3% of net smelter returns from production from the exploration licenses; in any given year, Further payments made prior to production may be credited against up to 80% of the deferred consideration payable in that year.
• Beginning with a decision to construct a mine based on a JORC (2012) feasibility level Technical Report that supports a positive production decision, payment of 0.01 oz of gold for each of the first 500,000 oz of contained gold in proven and probable reserves1. For any contained oz in reserves that exceed 500,000 oz over the life of the project, the gold payment to EMX will be reduced to 0.005 oz of gold per contained oz.

Eurasian said gold payments may also be made in equivalent US dollars at the then spot price of gold – the mode of payment to be at Land and Minerals’ election.
Failure to make the gold payments or achieve the required drilling would see Eurasian entitled to retake possession of Hauraki Gold or the permit covering the property.
Neavesville takes in a single exploration permit covering 30 square kilometres and several identified gold-silver targets.
One of the mineralised zones, Trig Bluffs, has an historic near-surface inferred resource reported as 3.2 million tonnes grading 2.7 grams/tonne gold and 8.9 g/t silver, for 289,000 oz gold and 944,000 oz silver.
In addition, says Eurasian, a separate higher-grade historic inferred resource of about 0.47 Mt @ 7.1 g/t Au and 20.7 g/t Ag, represents 107,000 oz Au and 312,000 oz Ag.
“The historic estimates should not be relied upon until they can be confirmed. However, the drill-delineated Trig Bluffs gold-silver mineralisation described by the IGNS (GNS Science) report is considered relevant,” Eurasian said.
The district had historic production from the high-grade Ajax Vein system, the single largest producing historic mine in the Neavesville camp, which is within the Pakirarahi 1B Trust land and will be the initial target of an upcoming exploration programme
“The vein has not been explored in recent decades, and only two modern holes have been drilled in the vicinity of the mine workings, both of which intersected mineralisation, with one drilled through a stoped cavity,” the company added.



Companies mentioned in article
Antipodes Gold Ltd
Eurasian Minerals Inc

Land and Mineral Limited (ACN 152 947 601) was formed in August 2011, had its most recent shareholding changes and a share issue in August 2013, and shares the same physical office and joint company secretary and accountant as Kidman Resources, who are listed under KDR on the ASX.

Leading directors for this new owner of the Neavesville prospect seem to be Gregory Seers and Jeff Bennett.

[elZorro]

The Neavesville prospect seems to be the Exploration permit (NZ) EP51767, still listed as owned by Hauraki Gold, in turn owned by EMX, a BVI headquartered company, which is Eurasion. I think last time I looked, a portion of the shareholding was owned by Newmont.

Hauraki Gold has dropped two other permits, one being the other Neavesville permit AXG were looking at, EP52759, in May 2014.

Meanwhile AXG languishes on the TSX at somewhere between C 2c and 3c a share, valuing whatever is left, at a few hundred thousand dollars. Considering the costs of exploration, the unpaid bills out there (although these are falling away), there is still some serious dilution of share value ahead, if AXG were to ever start exploring again.

I haven't seen anything new on the web from them, there will be a new quarterly report soon however. The company website appears static.