AXG - Antipodes Gold [formerly GEL - Glass Earth]

[bucko]

am i the only one who thinks this price is hugely under valued????

[elZorro]

am i the only one who thinks this price is hugely under valued????

Maybe some of us know it's undervalued Bucko, but having spare capital is an issue. I was just thinking this morning that once the annual report and some of its negative data is out of the way, some new press releases can only improve the shareprice from here.

For instance, we should be able to hear a bit about some drills at Garabaldi soon. From page 23 of the MD&A report (which last time I looked, hadn't made it to the public web or to GEL's website):

Garibaldi Prospect

(Glass Earth 100%)
Glass Earth announced the discovery of the gold mineralised Garibaldi Vein System on 23 April 2012, showing ore grade gold and related tungsten and arsenic mineralisation within vein sets striking over a 900m length and 300m width in outcrop and trenching.Geological mapping, detailed soil/gold sampling, and trenching have scraped the surface of a significant gold and related tungsten and arsenic mineralisation associated with multiple east-west and northeastsouthwesttrending epizonal-style quartz + sericite/illite + Fe-sulphide vein altered and sheared mafic schist in the Omnibus Stream catchment, North Rough Ridge, Central Otago.Channel/panel sampling from trenching (individual samples of 1mx1m) demonstrate consistent mineralised E-W orientated quartz veins with individual grades between 1 – 16.1 gm/t gold and importantly interfingered mafic schist with grades between 0.5 – 2.65 gm/t gold. This is an important development in early stage prospect delineation where the potential for significant widths of mineralised quartz and host mafic schist offer potential for a significant size mesothermal gold discovery. 168 line kms of ground magnetic surveying was completed in a 12 day period, to delineate the structureof the mafic schist, data has now been post processed and interpreted. After data consolidation and review, a shallow reconnaissance drill program of ten drillholes will be undertaken at Garibaldi in Q1 2013, to test the down-dip and along-strike widths and grade of potential gold mineralization.

On the Stuff website, a bit of a report about the annual results. I was wondering about the increase in stock-based compensation ($620,000) too. It is mentioned in the full annual report on page 33, it's a total of 2,730,000 shares as an option to purchase before Feb 9, 2017, a five year period, but at C35c a share. I wouldn't think these have been picked up yet. Over a million dollars worth of share purchase warrants expired in the 2012 year.

[elZorro]

There's been a bit of press repeated on the web about the placer costs:

A fourfold increase in production from its small-scale placer mining (mining by washing or dredging) saw total revenue rise to $2.98 million from $752,000 a year before. However, capital costs associated with ramping up mining activities saw the cost of sales rise to $4.12 million ($523,000 the previous year) to produce an operating loss of $1.15 million for the year.

This is technically incorrect, from what I've seen in the NI 43-101 report. Glass Earth has hired a lot of equipment like diesel generators, spent a lot on repairs for the older gear, and this has all been brought into the books for the financial year. This is how a normal business likes to operate, because it reduces the tax for the year, if all the costs are immediately expensed.

These were not capital costs then, they were running costs. If they could have been treated a capital costs, only about 10-20% of the costs would have been shown as depreciation, and the rest would show up as assets in the books. For a listed company like Glass Earth, with ongoing tax losses that accrue every year, there is no need to minimise taxes. In fact, shareholders like myself are waiting for the day when they can post a profit, and even a dividend!

I contend that the picture looks worse than it really is. Glass Earth should be buying the ancilliary placer equipment (like gensets) as it needs it, reducing all running costs, and figuring out how to turn a solid trading profit from the placer. If they're using contractors to repair the gear, they either need newer gear, or the ability to repair the gear themselves with the minimum downtime. There are a few great looking positives tucked away in the annual report data, and these would be interesting to have expanded, in the coming weeks.

[bucko]

after watching the first season of Gold Rush: Alaska Im essentially a pro miner now so if GEL would like to hire me to make repairs I guess i'd have to put my hand up!

yeh i think next quarters results are going to see a rally in the share price hopeuflly there would be minimal write offs as if they continue generating 1.4m quarter on quarter the company value is seriously undervalued

[bucko]

yeh just reading on huff post about the decline of the price of gold, aparently cyprus is looking at a possible sell off of its bullion...not good if that happens!

may as well increase my take at this price (and lower my average purchase price because all this red is making me depressed)

[Balance]

I'd wait a day or two mate, gold isn't done declining yet as this was the single biggest trading day on record. You're looking for a steep decline followed by sharp rally late in the day on the NY Comex. I believe $1295 (50% Fibonnacii retracement) may be tested and possibly broken through. Buying right now is not the smartest idea, wait until sanity returns to the market!

Looks like Warren Buffetf is proven right again - gold has no real economic value beyond its emotional appeal?

1. “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

2. “The problem with commodities is that you are betting on what someone else would pay for them in six months. The commodity itself isn’t going to do anything for you….it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something that you expect to produce income for you over time.”

3. “Gold is a way of going long on fear, and it has been a pretty good way of going long on fear from time to time. But you really have to hope people become more afraid in a year or two years than they are now. And if they become more afraid you make money, if they become less afraid you lose money, but the gold itself doesn’t produce anything."

[digger]

Looks like Warren Buffetf is proven right again - gold has no real economic value beyond its emotional appeal?

1. “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

2. “The problem with commodities is that you are betting on what someone else would pay for them in six months. The commodity itself isn’t going to do anything for you….it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something that you expect to produce income for you over time.”

3. “Gold is a way of going long on fear, and it has been a pretty good way of going long on fear from time to time. But you really have to hope people become more afraid in a year or two years than they are now. And if they become more afraid you make money, if they become less afraid you lose money, but the gold itself doesn’t produce anything."

Balance you are a person of two personalities.Generally you produce junk about NZO but just in the last two days are coming across as a well balanced poster [pun intended]. This above quote is in every way correct and it would be hard to put up a case against it. It does however not cover the human side enought. Sure gold is mostly useless and produces almost nothing and cost a lot to produce and guard.Humans are strange animals and for about ten thousand years we have decided gold is valuable so no Balance arguement no matter how reasonable is going to change that.Fortunes have been made and lost on gold since we invented the need for a means of exchange and that stays the same into whatever future humans made for themselves. Surely Balance you are not suggesting we entirely embrace the fait paper currencies we exchange goods with today.I am not in any way suggesting you are but by saying it that way it does show the problem we humans have to find some way to agree of value in our exchange. To me gold is certainly as good as any other means of exchange. Can you imagine a QE3 on gold????

[elZorro]

These are points that you might make on a GOLD thread Balance, and the answers will be a bit different there.

Gold does have a lot of use as a near-perfect conductor that doesn't tarnish, and of course another big use in jewelry. Gold is often mined in association with other metals like Mercury, Silver, Copper, Tin, and so while it's a most valuable byproduct, the bulk of the minerals mined in a gold mine could easily be the more commonly used copper, for wiring etc. The mines themselves, the exploration, the funding, are all big employers worldwide, so that's another positive.

No-one can deny that the basic purchase of some gold 10-12 years ago wouldn't have been a great investment, compared to many so-called productive investments and financial instruments. Gold isn't getting any cheaper to recover either. It's a proxy for the cost of energy, and also related to the the amount of foreign investments in US Treasuries. Maybe the Chinese have found a way to increase their gold holdings at a special rate, good on them. But I can't see that gold will stay down and out for long, and it's always recovered to make new US$ highs.

[Balance]

These are points that you might make on a GOLD thread Balance, and the answers will be a bit different there.

Gold does have a lot of use as a near-perfect conductor that doesn't tarnish, and of course another big use in jewelry. Gold is often mined in association with other metals like Mercury, Silver, Copper, Tin, and so while it's a most valuable byproduct, the bulk of the minerals mined in a gold mine could easily be the more commonly used copper, for wiring etc. The mines themselves, the exploration, the funding, are all big employers worldwide, so that's another positive.

No-one can deny that the basic purchase of some gold 10-12 years ago wouldn't have been a great investment, compared to many so-called productive investments and financial instruments. Gold isn't getting any cheaper to recover either. It's a proxy for the cost of energy, and also related to the the amount of foreign investments in US Treasuries. Maybe the Chinese have found a way to increase their gold holdings at a special rate, good on them. But I can't see that gold will stay down and out for long, and it's always recovered to make new US$ highs.

More from Warren :

“I will say this about gold. If you took all the gold in the world, it would roughly make a cube 67 feet on a side…Now for that same cube of gold, it would be worth at today’s market prices about $7 trillion – that’s probably about a third of the value of all the stocks in the United States…For $7 trillion…you could have all the farmland in the United States, you could have about seven Exxon Mobils (NYSE:XOM) and you could have a trillion dollars of walking-around money…And if you offered me the choice of looking at some 67 foot cube of gold and looking at it all day, and you know me touching it and fondling it occasionally…Call me crazy, but I’ll take the farmland and the Exxon Mobils.”

“The major asset in this category is gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.”

[bucko]

well fella's its a good job this forum thread isn't about purchasing Gold its about purchasing shares in a gold exploration/production company. while i agree wtih some of Mr Buffets comments about investment in gold i can still understand its historical importance to the global economy...and i also understand (and hope) that if GEL mines lots and lots of gold ill end up with lots and lots of moolah!

are you a holder in GEL Balance?