Glass Earth strikes new deal in the CoromandelSimon Hartley — 21 November 2012
Active explorer and boutique gold miner Glass Earth Gold Ltd (TSX-V & NZAX: GEL) has taken an option to purchase a gold and silver prospect north of the Martha mine in the central North Island, in a 50:50 venture with well known mining entity Geoff Loudon.
If access agreements can be struck, Glass Earth hopes to initiate a “minimum” 5,000 metres drilling programme in the 30sq km block later this summer, which is mainly felled forest area criss-crossed with logging tracks for access, as opposed to expensive helicopter-borne transporting.
Glass Earth Gold, which is producing alluvial gold from tenements in the Maniototo in Otago, is expanding its central North Island prospects from three to four in holding its option on the Neavesville (CRRT) tenement.
Chief executive Simon Henderson said Neavesville offered an opportunity to manage and control an established historic resource with the “immediate objective” to update and improve data on the potential estimated resource.
This could be seen as an implication from the 35% holding in the WKP gold discovery to the immediate north with Waihi mine operator Newmont Waihi Gold – where the exploration pace has not always been to Glass Earth Gold’s liking.
Between the 1970s to 2007, several companies explored the Neavesville area.
Glass Earth director, Peter Liddle, said from Auckland that once the estimated resource was updated, to new international standards, a decision would be made on acquiring Neavesville from Eurasian Minerals Inc, (TSX-V: EMX) which has held the tenement for less than a year.
Historically, the area is estimated, from 63 drill holes totalling 8,900m, to have an estimated resource of 289,000 ounces of gold and 944,000 oz of silver, including one deeper resource having a gold grade average of 7.1 grams/tonne, or 107,000 contained oz from 470,000 tonnes of ore. A shallower resource of 3.2 Mt graded 2.7 g/t Au and 8.9 g/t Ag.
The main discovery area from historic and recent drilling has been on Trig Bluffs.
Christchurch-based Geoff Loudon is an international explorer and mine developer, having been a foundation director of Lihir Gold Ltd, and is at present chairman of Nautilus Minerals and L&M Energy; the latter for which Loudon's New Dawn Energy Ltd launched a full takeover bid in early-November.
At the end of June Glass Earth held $C1 million ($NZ1.25 M) in cash. In late-June Glass Earth clinched $2.95 M in a private placement to refinance the $4 M buy-out of its former Otago joint venture partner, then in early-October raised a further $456,000 in private placement, out of Canada.
Under the deal with Eurasian Minerals, the joint venture will:
- Immediately reimburse Eurasian’s recent exploration costs (C$85,567).
- Make an option payment of 850 oz gold prior to the end of 2013.
- Undertake 5,000m of drilling and produce an updated JORC/NI 43-101 compliant resources report prior to the end of 2015.
- Exercise of the option to purchase the shares in the company owning the Neavesville permits and execute an agreement to pay amounts equivalent to a 2% NSR on production from the permits.
- Additional payments at the rate of 75 oz gold per annum, prior to exercise of the option and 100 oz Au after exercise of the option, until production commences, whereupon the deferred consideration and the additional payments paid are credited against 80% of the deferred consideration.
- Upon producing a compliant feasibility study, supporting a decision to construct a mine, payment of gold in the ratio of 1:100 on all probable and proven reserves included in that report – up to a limit of 500,000 oz on those and subsequently reported reserves. Payment of gold on reserves above 500,000 oz would be in a reduced ratio of 1:200.
*Simon Hartley is senior business reporter for the Otago Daily Times.
- Additional reporting by Ross Louthean
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