New Canadian capital raising for Glass Earth
Simon Hartley — 21 September 2011
Gold explorer Glass Earth Gold Ltd (TSX-V & NZAX: GEL) is seeking $C5 million ($NZ5.82 M) in a private placement in Toronto to recapitalise and continue its test drilling and mineral exploration around New Zealand.
About two years ago, Glass Earth's cash-flow was becoming perilously low, but it has successfully recapitalised several times since then.
It is understood to have spent more than $30 million during the past four years; the majority of it around Otago prospects.
In 2010, Glass Earth completed two fundraising exercises which raised $6.2 M and at the end of December carried $C3.9 M cash then in January received a further $500,000.
Glass Earth booked a loss for 2010 of $1.4 M, compared with $2.6 M the year before.
The company's chief executive, Simon Henderson, said together with increasing mining income from Otago, the $C5 M private placement would leave Glass Earth in a strong position for its drilling activities in 2011.
"The company consolidated its placer activities by acquiring 50% of its joint venture party's mining company; and related placer mining equipment," he said.
Gold production from Otago last year saw cash generation total $357,000, and forecasts in December said alluvial mining expansion in 2011 should mean a significant increase in both gross and net revenue.
Otago remains the focus of Glass Earth's South Island exploration efforts, which includes hard-rock exploration and some small-scale mining of loose alluvial gold around Central Otago.
On the North Island, exploration efforts are focused on gold systems around the Hauraki and central volcanic region, including a joint venture with Newmont Waihi Gold on the WKP discovery near Waihi which continues to shape up as a major epithermal gold project.
In the Central Volcanic region Glass Earth is adancing exploration on the 100% owned Muirs Reef in the Mamaku district.
*Simon Hartley is senior business reporter for the Otago Daily Times.
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