AXG - Antipodes Gold [formerly GEL - Glass Earth]

[elZorro]

FB, the geologists were gone at the end of Q1 by the look of it. The punt from then was that the placer would make money. When it didn't, they had few choices left. The operation will look more like NTL by next month. Retreating to an office in Wellington I'd say. After all, most junior explorers have this setup, and it's a big step up to employ 50 staff as GEL tried to do. If they started with even $2mill spare, it doesn't take long to chew that out if the placer is unprofitable. Remember the two GEL dump trucks? They were 25 tonne older units.

Skevington Contractors has at least 4 proper trucks, Caterpillar D400 36-40 tonne units, from their website. These would be worth over $100,000 each.

I really hope Skevington make a go of it, and prove that you really need to stick to your knitting in the business world. GEL management has shown shareholders that they don't have much idea on how to run a placer operation. They might be better at exploration, although it has to be said they haven't had much luck yet.

Placer operations have been started up all around the South Island, because the gold price is still higher than it has been for 10-20 years or so. They haven't all been successful, but GEL has made a quick mess of Drybread. Shareholder money has gone on wages and repair costs for equipment, fuel, leases, rentals, paying for overpriced gear, you name it.

Despite saying in the Q1 report that the CEO and CFO were getting pay cuts, nothing noticeable happened by the time the Q2 report came out. They're not massive salaries, but they didn't drop much, that's for sure. I suspect that pay cuts weren't suggested by either of these gentlemen, someone else wanted that done, and any bridging finance will probably come from the same source, the major shareholder Geoff Loudon. Mr Loudon was not a buyer in the last PP. It wasn't long after the PP event in 2012/2013 that Brent Cook dropped his support for the company as well.

I don't think it's a question of whether there will be a consolidation in the shares, it's a matter of how severe it will be this time. There's an extraordinary general meeting in Vancouver in early October.