A strengthening of buying interest shown for Glass Earth after the overnight press release on the TSX. Some of the WKP36 and 37 drill assays have been divulged, and these would probably have been from the more obvious parts of the drills, or we are being shown the best parts. WKP drilling is resumed, and a lack of water for drilling use (drought) has been offered as one reason for the delay.
The grades are not great, but the point is that once again, it doesn't seem to matter where they drill at WKP, they find gold and silver at the sort of grades a large-scale opencast would work with, on top of some much higher grade intersections suitable for underground work. The proposed drilling areas for the next 2400mtrs of drilling (and this only really makes up for the 2012 drilling campaign not completed) shows some economy being used, three drills from one collar. The area of interest has changed, they're heading roughly North-east from WKP37 and drilling back near some legacy holes.
The planned 2,400m drilling programme focusses on testing the under-explored EG structure (first discussed in a Glass Earth Gold press release, 31st October 2012), both along strike and up and down dip. See Figure 1. The 2013 work program is budgeted to cost approximately $C2.3M (Glass Earth Gold's share ~$C0.8M), and is to include project-first resource estimates.
Further to the new EP above Macraes: GEL also have the large PP above that (PP53297), although some of it seems to be earmarked for a competitive tender in 2013.
Just thought I'd point out that SEDAR is holding the file of an amended MD&A report dated 26 April 2013. As far as I've been able to see, one change is on page 27, where a Selected Annual Information table has been added.
This shows total revenue up nearly 400% over the previous year to nearly C$3mill, but paper writeoffs of older mineral properties in 2012 resulted in a loss per share of C15c. Previous two years it was 3c each year. Total assets remain unchanged basically, at around C$17mill (mostly exploration and equipment). So book assets are well above the MCap, a fairly safe situation compared to some growth shares I could name.
The financial statements don't seem to have been changed, so this is some sort of a regulation criteria. As the MD&A document size hasn't changed much, and it's still 40 pages long, that should be all that was changed. Glass Earth's website still holds the original superceded document at the moment.
Based on the placer data we have, and gold at US$1450 an ounce, GEL should be able to take $7mill of gold revenue out of Drybread in the next year. That's revenue, not net profit..
Interesting comment, that there is potential for a project first resource estimate for WKP in Q2 of 2013, also referred to as "later in the year". But I have learnt to be careful with their data, after some wonderful bogus grades were reported once before.
WKP is on JV permit EP40598. This permit expires on 21st May 2013. It's already an extended permit, has run for 10 years, and the next stage to hold it might be to call it a discovery appraisal.
Here's the list of work that needs to be completed and into NZPAM by the 120 month stage. So the estimate we're waiting for, has to be produced fairly soon, along with some more drilling results, unless they're ahead on that front.
I've spent a bit of time looking back at the documentation for the WKP permit.
It turns out that a London-based firm, HPD Investments Ltd, had a wholly owned subsidiary that used some UK-raised funds to have a look over here for prospective gold permits. They used a contractor (Kenex) to help with that. One of HPD's directors, Marc Sale, was also a technical manager. In late 2005, a deal was struck where Glass Earth Ltd bought out all of these NZ permits (HPD NZ Ltd) for NZ$4mill.
HPD: HPD,who were acquired by Glass Earth (New Zealand) Limited, used prospectivity modelling to acquire and manage exploration on projects throughout Otago,Marlborough, and in the North Island of New Zealand. They used the prospectivity modelling to identify areas that lacked specific geological and geochemical data that could enhance the prospectivity of their targets.
This allowed HPD to design cost-effective exploration programs, prioritise their project expenditure, and rapidly identify those prospects that had the best chance of being developed.The tenement package acquired by HPD was considered highly prospective by other exploration companies, who then offered HPD a variety of investment and joint venture proposals.
HPD NZ recently merged with Glass Earth, a new NZ exploration company, in a deal worth $4M to HPD NZ shareholders. Glass Earth acquired the prospects developed through the modelling work done by Kenex. This valuable exploration land assembled by HPD is today undergoing drilling and aggressive exploration by Glass Earth. [top]
Some of the HPD permits were in the CVR area above Taupo, and others were around Waihi. Earlier research papers may have highlighted some of the areas for the HPD team. WKP was one of the areas, and it received an early mention in the IPO prospectus for Glass Earth, later on in 2006.
As an aside, Marc Sale was at one stage going to be a director of Glass Earth according to NZPAM, but that didn't happen, and he is still linked with the parent of HPD, Patagonia Gold PLC, as a technical director. Patagonia are exploring for gold in Argentina.
During the 10 years from 2003 when the WKP area's permit was first started as no. EP40598 (3650Ha), the area was expanded by GEL and then reduced by the normal rules, but has more recently been added to by petition, so that it is 30% bigger than when it was first approved (now 4751Ha).
This has also preserved most of the exploration data with the JV, it cannot be divulged by NZPAM until the permit is cancelled, or surrendered. Successive permit types preserve the IP too. While Glass Earth took over the rights to the WKP permit area effectively in late 2005, Waihi Gold (Newmont) was brought in as a farm-in partner in an agreement dated 26 February 2007, 3-4 months after the IPO. I've mentioned before the strong links that Glass Earth has with Newmont, particularly through their chairman, John Dow. Newmont had earned a 65% share in the permit by 23 August 2010.
It looks like May 2013 could be an interesting point in the timeline for the WKP permit.
A discovery appraisal application doesn't appear to have been lodged yet, but they have some time left.
Today, the extension of area in GEL's permit EP40767 has been granted, which I think restores some ground that was lost near the Waihi pit due to the normal reduction in permit area. They have until 20 December 2015 (end of 10 years) to complete another 1000mtrs of drilling, but no preliminary resource estimate is required, according to the paperwork loaded up at the moment.
These permit areas that are being added, signal an ongoing interest in resources sited near Newmont's mill and ore/tailings handling facilities at Waihi.
Permit EP40767 is still 100% Glass Earth's -and is 280.4 Ha. Looking to see who else is crowding around in the fully taken up permit space around the Martha pit is Laneway Resources (55213 applied, and permit 53469). They are listed on the ASX as LNY (were Renison).
But also great to see, Dr Stuart Rabone (wrote a good research paper on WKP) has a permit just outside Waihi, no. 52566. All the best with the exploration.
In 2007 some more mention was made of EP40767, the aerial survey flagging possible continuation of a vein into the permit.
Newmont and Glass Earth made their first joint venture agreement in April 2005, on the 280 hectare Waihi West EP 40767 adjacent to the Martha mine after Glass Earth's aerial geophysical surveys indicated good evidence of gold mineralisation from the Martha mine extending into the permit. Newmont was to spend $400,000 in the first year and after a decision point could spend a further $1.1 million within the next two years to earn 60% rights in the permit.
It would seem that Newmont had not spent the full capital on the exploration in Waihi West in the three year timeframe allowed, and so there is no mention of a farm-in yet, in the NZPAM documents. It's 100% Glass Earth's at this stage. But by 2013 there was a bit more info about that from Glass Earth:
In the Hauraki Region, Glass Earth Gold has identified and developed significant ground positions around the active Martha Hill gold mine operations at Waihi. The Newmont-Glass Earth Gold Waihi West JV (Newmont earning in) and Hauraki JV (65/35), including drilling at the WKP discovery, are being actively explored and managed by Newmont in collaboration with Glass Earth Gold.
In the 2012 annual report:
Separately, at Waihi West (adjacent to the Martha gold/silver mine owned by Newmont, pursuant to a 2006 Joint Venture agreement, Newmont has undertaken preparatory exploration and drilled 4 holes
into this permit area, with modest results. Glass Earth agreed to extend the term in which Newmont can
expend the remaining funds out to 31 March 2013. As at December 2012, Newmont had expended
approximately 71% of the funds required for it to earn an initial 60% equity in this permit.
Modest results - but by now the decision will perhaps have been made about a JV in this permit.
I've only just seen this: Newmont's Correnso application has been approved today.
Here's the full report on the findings. This mine will employ hundreds of workers, just as the other Newmont mines are running down. They'll be starting by the middle of 2013.
From NZ Resources, a bit of background on Correnso.
Green light for Correnso mine but protestors may appeal to put it back on amber
Ross Louthean — 8 May 2013
The future of gold mining in the medium to long term in Waihi now appears assured with resource consents granted for Newmont Waihi Gold’s (NWG) underground mine in the Waihi East area – on the outskirts of the North Island town.
Correnso is the next major step by Newmont Waihi Gold, the operating New Zealand subsidiary of Newmont Mining Corporation.
Without Correnso gold mining in Waihi could cease when reserves are depleted on the new Trio underground mine - within four to five years.
The decision comes after the project was put through the arduous consents process and public scrutiny, including the Green Party and others who oppose anything that sniffs of mining.
NWG announced yesterday a positive decision by the independent commissioners’ hearings panel considering the mine application under NZ’s Resource Management Act.
The panel granted consent for Correnso subject to a range of conditions, but has not granted consent for the wider Golden Link Project Area that was originally sought by Newmont Waihi Gold.
The commissioners said: “‘We are satisfied that the development of the Correnso underground mine will, subject to appropriate conditions, enable people and communities to provide for their social, economic and cultural wellbeing.
“The potential of natural and physical resources to meet the reasonably foreseeable needs of future generations will be achieved, while the life-supporting capacity of the local environment will be appropriately safeguarded.
“The adverse effects of the proposal will be avoided, remedied or mitigated, subject to the imposition of appropriate conditions.”
NWG’s general manager Glen Grindlay said the commissioners’ decision must be considered in tandem with Newmont’s assessment of the viability of the project given the conditions set.
“We anticipate that some objectors may wish to appeal the decision or seek alternative conditions through the Environment Court, and it is highly likely that we will also lodge an appeal to address some conditions,” he said.
Grindlay says that Newmont is committed to the process and is ‘in this for the long haul’, stating that the company has committed several million dollars to the Waihi East Community.
“We have funded the Waihi Community Forum which appointed an Independent Review Panel that has just recommended that the company purchase seven residential properties in the Correnso area at a cost of about $NZ2 million with the same amount again yet to be spent.
NWG has, he added, also contributed significant funds to the Waihi East community through the ‘Top Up’ programme for property purchases; the ‘Healthy Home’s programme will see 270 homes insulated for free; the ‘Streets Ahead’ programme has committed $400,000 for Waihi East residents to spend on community amenities and committed funds to the local primary school and pre-school facilities.
NWG’s big Martha open cut and Favona underground mines have either finite or no reserves left and because the company was too coy to embrace the media, the arch anti-mining Green MP Catherine Delahunty, also a member of the Coromandel Watchdog group, did so with relish.
She told Radio New Zealand that while the decision would suit miners it was disastrous news for the townsfolk devastated that mining would continue with Waihi now a “man-made Christchurch” through the constant noise and disruption caused by mining.
Also, she said it was providing a short term economic solution due to the fluctuating gold price, whereas the upper Coromandel was travelling fine through no mining and other industries.
Perhaps Delahunty should take off her large blinkers because Waihi has been transformed from being a subsistence community through the revival of gold mining at Martha in the 1990s, and continued ever since.
This could not be said for most of the Coromandel where factories like the one that operated in Waihi decades ago, are either closed or struggling.
Newmont’s Waihi operations have been put up in the global mining industry as an example of the importance of community relations, and that includes the fact that current operations are on restricted time, excluding weekends, and drills operating near the town are encased in steel containers to mute the noise.
As for painting a picture of a disenchanted town, a recent poll on maintaining gold mining showed that opposition like the Greens would have as much chance of winning the public heart as a Labor candidate in a marginal Queensland seat in the coming Australian federal election.
One of the concerns for mining gold in Waihi, stemming from when the operations were taken over as part of Normandy Mining by Newmont in 2001, was that the Waihi operates were a small fish in Normandy’s big pond.
While it was put on the auction block it was withdrawn after some Canadian suitors became shy with the extent of environmental and resource consents involved.
Newmont, like other global mining giants, has been cutting exploration, marginal projects and even chief executives in the past year due to dwindling profit margins but it appears – based on Newmont’s presentation at Diggers & Dealers in Kalgoorlie last year – that Correnso is seen as a great discovery.
The project may operate seven days a week, round-the-clock and employ about 400 and is expected to be a $US200 M development.
Based on known reserves Correnso will begin construction on the eastern side of the Martha pit mid year and could ramp up to annual production of 100,000 ounces of gold and 750,000 oz silver. The target zones underneath 45 homes – some occupied by company people – is about 130 metres deep and extends to 350m.
Glass Earth has applied for a large mining permit at Waikaia, (55389), on 8th May 2013. The duration is for 10 years. Gold is the only mineral they're after, it's a placer mining site. This is a welcome development, I've covered a lot of detail about the area in posts from 5th July 2012, after the covering EP52844 was established.
It's a promising area, very high grades compared to Drybread have been measured here, see the Q1 2012 report. The size of the permit is about a quarter of the overall one at Drybread. Good results depend on how deep the gold is, how much clay, etc. In the past, quite big equipment like dredges have been used in the area. GEL has one floating GRU, being GRU#1.
The NI 43-101 report for WKP in February answers the issue I saw looming for the permit:
EP40-598 (Figure 2) was granted to HPD NZ Ltd on 22 May 2003 for a period of 5 years covering 5497 hectares and was later transferred to GENZL. A Farm-in and Operating Agreement between GENZL and NWG dated 26 February, 2007, was approved by the Minister of Energy under Section 41 of the Crown Minerals Act 1991 on 10 October 2007. On the 30th June 2010 the Hauraki Joint Venture (HJV) was formalised between the two companies. An Extension of Duration on a reduced area of 2747 hectares was granted for five years from 13 June 2008, and two subsequent Extension of Land applications (granted 22 January 2009 and 22 August 2011) brings the current permit area to 4108.4 ha. The permit will expire on the 21 May 2013 and will be subject to an appraisal extension for a further five years. There is no limit on the number of appraisal extensions required for appraisal based activities.
The NI 43-101 report that was produced earlier this year has 12 pages of great detail on the Waikaia permit. Starting at page 89 (the report is on the GEL website, technical data pages).
While being low key at that stage, it simply reported on the drill campaigns from two other companies, plus its own work. The grades GEL achieved got as high as 3g/m3 in one of the drills. The average wash grade for the resource area they refined was a shade under 0.5g/m3, which is still good for placer. It had a very high standard deviation, meaning there are some real hot-spots. The work defined about NZ$27million worth of gold, and when it's looked at using the existing gear at Drybread, it would take about 2 years to recover all of it.
The gold is only about 5-7 metres down, in a wash layer about 1 metre thick. This sounds similar to Drybread. Eureka Mining Ltd did some of the earlier drills in 2004, and located a richer area just to the East of GEL's permit, which is now being mined under permit MP41875. Some well-heeled interests are involved there.
NZResources reported in February that some more ground and engineering work would be needed at Waikaia before making a decision to mine there (potentially clayey deposit). Looks like that went all OK. Using the placer resource table, Waikaia is the biggest spot, and has the best average grade apart from the small Vinegar Hill permit.
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