Capital will pay for gold exploration
By ALAN WOOD - The Press
Last updated 05:00 02/02/2010
Glass Earth Gold is planning a capital raising through overseas and New Zealand investors in March after it completes a share consolidation plan.
Glass Earth chief executive Simon Henderson said the money raised will be spent on test drilling at five of the company's seven South Island sites and in two North Island sites.
He did not want to name a figure, but it would be significant for a company of Glass Earth's size – a capitalisation of around $11.9 million.
"(We've) got to get onto our major drilling projects at the end of the recessionary phase. We've got ourselves through that process without falling over and now we've got to ... start more active drilling in the field," Henderson said.
Glass Earth has called a special general meeting on February 24 in Vancouver, Canada to consolidate its 157.7 million shares into 31.5 million shares – on the basis that every five common shares be consolidated into one.
This was to help with efforts to raise more capital, Henderson said.
Investors, particularly in North America, were not as interested in "penny shares" or those with a face value of less than 20 cents a share.
Glass Earth shares last traded at 7.7c within a 12-month range of 5c to 17c.
"We are looking at a significant capital raising in late February, early March. The (share) rollback is geared around that fundraising process, so we'd need to formalise that so people buying shares are buying in at the rollback stage."
Glass Earth also wanted to commission a second alluvial gold-recovery unit at one of its Ida Valley prospects in the first quarter of 2010. There was already one unit – comprising diggers, a processing plant and water supply-washing system – operating in the Ida Valley region of Central Otago.
Henderson was unspecific about the amounts of gold being recovered daily from the McAdies prospect in the Ida Valley but said its sale would go towards making the company cashflow positive.
Glass Earth is working with joint venture partner Dunstan Mining in the Ida Valley and is permitted for mining at the McAdies prospect.
"We are producing in a very minor way. It's a good start for us," he said.
"We anticipate increasing the number of operations that we have in the Ida Valley ... we have one operation going in partnership (with Dunstan Mining).
"We should have another running inside three months, and we have potential to grow further if those two consolidate enough business."
Henderson said he was confident of getting a second permit through soon for the second Ida Valley site.
Glass Earth dual-listed on the Toronto and New Zealand stock exchanges in October 2006.
It has also entered into a joint venture with private South Island company Ophir Gold and has recovered a small amounts of test gold from a prospect near Ophir township in Central Otago.
Henderson said sampling tests were continuing at the Ophir prospect with drilling into the rock, and some results from those tests still to be returned from Canada. "We did construct and process some material, and the results of that aren't finalised yet."
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