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Hauraki Joint Venture (WKP prospect)
Negotiations are well advanced withNewmont Mining (65%) for Glass Earth (New Zealand) Limited
(35%) to assume management of the HaurakiJoint Venture and sole fund exploration activities in order
to increase its equity in the JV.
Outstandingcash calls of $588,000 due to Newmont by GENZL as at 30 September 2013, would form
part of the overall funding for the 2014& 2015 exploration expenditures. Newmont has reserved its
position in respect of the unpaid cashcalls by issuing a Default Notice under the terms of the Hauraki
Joint Venture Agreement (“JVA”) on 17October 2013. The JVA requires that the unpaid cash calls be
remediedwithin 65 days or default dilution will occur (potentially up to a 20% reduction in GENZL’s
interest in the project).
Neavesville Prospect (GENZL was 50% - now 100%)
As from 6 November 2013, the Company hasregained 100% ownership of the Neavesville prospect
opportunity. Negotiations are underwaywith Eurasian Minerals to amend the terms of the Option
Agreement – primarily to extend the payment deadline of 31 December 2013 foran option payment of
850 oz gold (or equivalent US$’s or GEGshares – at GEG’s election).
Placer Creditors in New Zealand
On 5 November 2013, creditors of GlassEarth Mining Limited’s placer operations, totaling $620,000,
agreed to accept a mixture of immediatepayment and deferred payment terms (upto 31 December
2014) while the Company refinances.
Significant Expenses of a Corporate Nature
The Net Loss before Income Taxes for the9 months ended September 30, 2013 was $12,911,000 (9
months September 302012: $8,952,000). Placer miningaccounted for $6,932,000 of this loss.
The Company’s cash position as atSeptember 30, 2013 was $423,000 (September 30 2012: $522,000)
with Trade Payables of $1,368,000.Payment of $1,208,000 of these Trade Payables is discussed under
the Subsequent Events note on page 24.
The Companyhas reduced its staff down to its two senior executives who are taking significant salary
sacrifices. The Company has reduced itsnon-exploration expenditures and efforts to reduce other
liabilities are underway. The Company hasa history of successive capital raisings (as is usual for an
exploration company).
Related Party Transactions
Related party transactions are in thenormal course of business and are measured at the exchange
amount, which is the fair value as agreedbetween management and the related parties. The
strengthening New Zealand dollardisguises some of the salary sacrifice in C$ terms.
a) Simon Henderson, CEO, received$150,215 for the nine months ended September 30,
2013 (nine months ended September 30,2012: $158,769). Use of a motor vehicle, life
and health insurance benefits are alsoprovided.
b) Peter Liddle, CFO, received $117,879for the nine months ended September 30, 2013
(nine months ended September 30, 2012:$128,327). Use of a motor vehicle, life and
health insurancebenefits are also provided.