AXG - Antipodes Gold [formerly GEL - Glass Earth]

[elZorro]

Just found or rediscovered the 2011 half-year report from GEL: here's some of what they said about placer mining:

Placer exploration & mining is conducted under a 50/50 joint venture with an experienced placer miner in the Otago region (Goldmines New Zealand Ltd and the related mining company, Dunstan Mining Ltd). In Q1 2010, the first generation of cash from these placer initiatives was recorded. Costs associated with the exploration and establishment of these operations is being amortized rapidly against revenue as a conservative approach.The first placer mining at McAdies commenced in December 2009 and finished in October 2010 with the replacement operation at Gunclub commencing in December 2010.

In March 2010, Glass Earth (and Goldmines New Zealand Ltd) entered into a joint venture with Placer Gold International to carry out drilling and bulk sampling at Vinegar Hill in the Manuherikia valley (the 2 target areas are referred to as Shepherd’s Flat and Nicholson’s Lake). Historically, the site was mined by sluicing and hydraulic elevators. Placer Gold will provide up to NZ$250,000 (circa C$190,000 for each of Shepherd’s Flat and Nicholson’s Lake to prove up the resources in return for earning a 30% equity. Should Placer Gold wish, it can provide further funding of NZ$500,000 (circa C$380,000) per target for capex to earn a total of 50%. The NZ$500,000 funding is preferentially repaid out of mining profits.In October 2010, the Company purchased 50% of Dunstan Mining Ltd, thereby securing access to mining equipment and related resources. All mining equipment is held by Dunstan Mining including the 40 tonne Gold Recovery Unit leased to another mining project.

Net cash generation from the Company’s 50% share of placer operations totaled $357,000 for the year, with the Q4 contribution reduced due to rehabilitation work at McAdies and the initial set up at Gunclub. Planning is underway to commence a further 2 mining operations and a franchised arrangement – all to run concurrently with Gunclub. The leased gold recovery unit has been returned to Dunstan Mining in June 2011 and a third gold recovery unit is being built.

Q1 2011 Exploration & Mining Activity

Good revenues were gained from leasing out the Gold Recovery Unit at Earnscleugh and placer mining at Gunclub (Ida Valley, central Otago). While the net revenue of $129,000 was a welcome contribution, management is committed to a significant increase in placer gold production from this source this year. Exploration, land access, permit and resource consenting continued on several targets in the Ida, Manuheriakia and Maniototo Valleys (central Otago) in order to allow multiple operations to be run concurrently.

Q2 2011 Exploration & Mining Activity

South Island placer work comprised ongoing mining at Gunclub, a drilling campaign at Drybread (a target in the Manuherikia Valley, also in central Otago), processing of drill samples and field mapping/sampling in Southland. South Island placer mining at Gunclub continued with twenty five pits completed and assayed to define and test the western lode ahead of mining. Resource definition drilling commenced at Shepherds Flat in July. Six drill lines are planned with eight holes and 165m of drilling per line. Drybread RC drilling has continued with 144 holes completed and two additional lines planned. Processing of these drill samples is ongoing. Council resource consents have been granted in respect of Drybread and the grant of a Mining Permit is imminent. This will allow 2 further Gold Recovery Units to be deployed –complementing production at Gunclub.

Tucked inside this report is a few lines about Serpentine: two drillholes done, best result was 1 metre of 1g/tonne. It didn't reflect the surface measurements, and they're not sure why.