AXG - Antipodes Gold [formerly GEL - Glass Earth]

[Citizen Erased]

You must be pleased with the recent price action, elZorro? Good for you.

I took the conservative option and bought more physical bullion, rather than shares.

What do you think the future share price potential of GEL is, if they strike it big?

[elZorro]

You must be pleased with the recent price action, elZorro? Good for you.

I took the conservative option and bought more physical bullion, rather than shares.

What do you think the future share price potential of GEL is, if they strike it big?

You should do all right with gold bars CE. Certainly while open-ended QE3 is in progress. OGC is perhaps another local stock which will follow gold, but at a bigger percentage margin both ways. I'm unsure why Baker Steel is backing out of it, they usually know what they're doing.

But the big question is, where could GEL go from here? Worst case, a big mine is a long way off while they wait for a good few intercepts. They still have their placer mining permits, which can fund exploration and overheads given basic grades of ore to work through. So I can't see them going backwards from here, unless a large capital cost looms up.

However I'm increasingly optimistic that one of the next drill(s) at WKP could hit the mother lode. Either the intermediate gold veins from the original epithermal event (a feeder zone rather than the broken surface expressions), or a concentrated seam trapped by the adjacent andesite. I still have a lot of research to look into when I have time, these documents are held on the NZPAM website. It looks like the geothermal waters that brought up the gold from the lava below, were coursing through the WKP area for many many years. There is still a warm spring near the WKP Stream.

What do we know about the Hauraki gold mines from 100 years ago? The old miners were bringing out gold from the underground veins that averaged 3oz per ton. Colossal grades nowadays. No-one has yet found consistent veins like that at WKP, but some short intercepts are at that level. As we have seen, the area is rugged, hard to get to, it discourages long-term drilling. For that you need a big partner like Newmont.

There have been mentions here and there estimating about 3Moz, even 5Moz of gold at WKP. Considering the big mineralised area, and comparing it with Waihi's Martha mine (11Moz), that sort of level doesn't seem impossible. Lihir for example is a lot bigger (40Moz), but they can opencast it.

WKP is of little value until the grades and continuity are at a level where Newmont see they can profitably underground mine it. If Correnso is anything to go by, 0.5 oz/tonne and say 3 to 5Moz total would probably get them interested. It's a bigger step up than Correnso, where they are beside existing structures and equipment. That's why the WKP assays are so important.

At 15grams/tonne average grade, a volume of ore 300 metres square and 70 metres deep would yield about 6.3Moz of gold. If the ore is 3 oz/tonne grade average then they'd need only one sixth of that volume. But as you can see, it's not a very big volume compared to WKP's mineralisation area. Drilling at 200 metre spacings to find that high-grade gold (if it's there) could take a while, but they seem to be getting closer. Every drill finds gold.

Proven/probable gold in-ground is worth about US$250 an ounce, maybe a bit more as the price keeps going up. This theoretically puts GEL's 35% share of say a proven 5Moz resource as about $440 million. Shares would then be worth about US$5.50 each, NZ$6.90, a 1470% increase on today's price. But in the scary world of the junior explorer, this is not the norm, they don't all find enough gold for a mine, as Brent Cook pointed out. It's very heartening to see someone like Brent Cook backing GEL as one of 20 junior explorers that have a good chance of making it.