They say that the first 5 years of any business operation is the testing ground. Those that are still operating after that time, have better chances of success.
Glass Earth Gold was first established in 2002, and the capital raising's public stage was in September 2006 (the IPO).
So in just 10 years, Glass Earth has gone from an idea, to a listed company with international links and strong cornerstone shareholders (ACC, Loudon etc), with two or more large to internationally significant gold deposits being proved up, and is a useful NZ employer and funder in the greenfields and alluvial/placer area. Next on the list, a solid cash balance in the bank from gold sales.
And I would say that this move can't come too soon. Glass Earth will be one of the few gold explorers with a good cashflow that doesn't require the issuing of shares. They will stack up really well against other juniors, and investors are already looking hard to see which, if any, they will hold. Have a look at this video.
Not to put too fine a point on it, the companies office reports no change to the shareholdings of Dunstan Mining Ltd or Goldmines NZ Ltd, which are theoretically in Glass Earth ownership.
GEL is due to pay another $1.5mill to Bob Kilgour's company on 11th June, and I can see the importance of the 35c options timing, being 7th June. Still, that is not a lot of cash, when secured against all the hardware and the permits that came with the purchase. The rest of the payments are timed to be met with part of the placer returns, much easier if all goes well at Drybread, and it should.
The next two-and-a-bit weeks might be the last time GEL needs to quickly come up with some capital, and in any case I think they will have a number of funding sources only too happy to help out. Now they are on a true business footing, even a bank or equipment financing loan wouldn't be much of an issue.
I forgot this link too: Stuart Rabone was the second author in a more recent paper on WKP, dated around 2005 or later, that I've posted on before. It's on the GEL website - have a read - because with the more recent drilling, those Newmont geologists must be sniffing the gold out by now..
CONCLUSIONS WKP has had much effort expended in exploration and research,
particularly in the application of XRD and fluid inclusion
analyses from exploration and research viewpoints. The prospect exhibits a variety of favourable features to encourage exploration: it is a large mineralised system, which hosts a
significant quartz vein stockwork zone within quartz-adularia
altered host rhyolite; locally the veins carry high-grade
mineralisation albeit over narrow intervals. The system is open in
two directions and not well tested where it occurs in basal
andesite host rocks, which are typically better host rocks for
epithermal vein style mineralisation in the Hauraki Goldfield. The fluid inclusion and wall rock alteration data suggest that
polyphasal boiling has occurred within the system; however, major upflow conduits are yet to be discovered. Although there is
isotopic evidence of fluid mixing, specific mixing zones, also
prime targets for gold mineralisation, have not been identified. The strongest mineralisation and vein development intersected to
date is in the south of the gorge section (in DDHs 20 and 23).
Low amplitude-long wavelength magnetic anomalies are extensive
in this area, despite the presence of outcropping unaltered
Whakamoehau Andesites. This suggests that Whakamoehau
Andesite post-mineralisation cover here is thin and that alteration
extends a considerable distance south of the gorge section.
Significant exploration potential consequently exists in this direction beneath cover rocks (cf Golden Cross; Mauk and
Purvis, this volume). ACKNOWLEDGEMENTS Rabone, Barker and Merchant were at various times part of the
teams of exploration geologists that worked on WKP. Research
by Christie was funded by the Foundation of Research, Science
and Technology under contracts to the GNS Mineral Resources
Programme managed by Ian Graham. Julia Vodanovich and
Carolyn Hume drafted the diagrams and Pat Browne reviewed
the manuscript.
Putting some of these WKP maps and charts alongside each other gives us a few more clues. The original work done over a century ago provided a tramway line all the way to the coast, not sure of its condition now. But the sample they sent from a small shaft or adit at WKP for processing at Thames was well over 1oz of gold per ton. Back then, perhaps this was getting marginal for inaccessible hard rock mining that needed processing. Several greenfields explorers have checked out WKP since, using some quite new techniques, the same ones GEL has used in Otago and CVR. When GEL bought the prospect from HPD, all this info came with it.
Newmont are still concentrating their drilling in the same area around the WKP river gorge that has exposed the quartz veins, but has been successful in finding much bigger gold-bearing veins further underground, as Rabone and Christie predicted. Note that further south, large tracts of unexplored drilling space are waiting, with gold in the soils on the surface. Newmont's drilling in the next phase, of 5,500 mtrs, is the same amount that was drilled by three other companies in the period 1978-1993, that's 15 years, 23 drills.
So Newmont has only spent a few million on WKP so far, have earned in 65%, but are spending a lot more on their areas around Waihi to get to the mining stage. With a bit of luck and hard work, some continuing finds at WKP should encourage even more capital outlay. Newmont ramped up their exploration spend around 2008 to over $10mill p.a., and a change in policy over their intentions for Waihi was linked to the gold price.
Low volume on the NZX as always, but B:S spread opened to 30% during today, from 36 bid to 48 Sell.
Seller came down to 42 by days end, merely a 16% spread.
Interesting times if you are bull on gold.
V.
Low volume on the NZX as always, but B:S spread opened to 30% during today, from 36 bid to 48 Sell.
Seller came down to 42 by days end, merely a 16% spread.
Interesting times if you are bull on gold.
V.
Vtrader, like you I wonder where the gold price will go next. In the meantime I had a bit of a look over Newmont's articles for some figures on their expenditures. For example, they spend $10m on exploration each year around Waihi, and will spend about $700m on Correnso over 7 years or so, if it is approved. The return should be about $1500mill from 650,000 oz.
Then I created this bar chart (OK, I had some help from a yr13 IT professional) to show what WKP would look like if it had 5Moz of gold taken out at current prices.
Two things I noticed:
-It's a lot of money
-Would Newmont really allow Glass Earth Gold to have 35% of it, or would they make a move at some stage?
Vtrader, like you I wonder where the gold price will go next. In the meantime I had a bit of a look over Newmont's articles for some figures on their expenditures. For example, they spend $10m on exploration each year around Waihi, and will spend about $700m on Correnso over 7 years or so, if it is approved. The return should be about $1500mill from 650,000 oz.
Then I created this bar chart (OK, I had some help from a yr13 IT professional) to show what WKP would look like if it had 5Moz of gold taken out at current prices.
Two things I noticed:
-It's a lot of money
-Would Newmont really allow Glass Earth Gold to have 35% of it, or would they make a move at some stage?
Z,
A chart!
After all your FA and you play TA also.
Black white or grey, opposites attract.
TA suggests that GEL.v could have just started up from an EWT minor 2.
A low volume chart, prone to error.
Something to lighten my day.
V.
Cheers Vtrader. Only 5 trading days left in NZ before the options are due. Will GEL roll out some news before then? I wonder. It's a busy time of year for me, so I won't be posting too much detail for 2-3 weeks.
First quarter results are out, had a quick look and nothing too surprising, although the latest drill at Muirs will be interesting when the assay is reported.
By midday 31/5/2012 NZ time the MD&A full version is not available on the web, at the GEL website or on SEDAR. The map (pdf) of the permit areas that links to the news release is old, it shows a permit around the Talisman Mine, for example, and that area is now dropped, Renison Mining are looking to take it on. So a 50% mark for accuracy and speed of this update, to GEL. ("Achieved" is the current mantra I believe).
The full MD&A should give a lot more detail, might even talk a bit about what has happened since 31 March.
This third quarter coming up could be the most important GEL has seen, regarding cashflow from operations. It could be very good. Pity we seem to be three months behind on information.
The SEDAR site has been updated to show 30th March data within the last 2-3 hours. So here is a cut-down version of the MD&A for Q1, and again it makes interesting reading.
Q1 2012 EXPLORATIONACTIVITY (Otago)
A network of gold bearing quartz veins has been discovered at new prospect Garibaldi. 2011 mapping and sampling at SparrowHawk South revealed anomalous gold and lead to the identification of a quartz vein system at Garibaldi. A trenching program commenced to follow up on positive rock chip geochemistry associated with quartz vein T4 (up to 8.73 gms/t gold). Eight trenches have been completed exposing a stock work of quartz veins, up to 1.5min width. 172 rock chip samples have been collected from the trenches; initial assay results indicate grades up to 16.1 gms/t gold.
A first pass program of stream sediment sampling was started in the Kakanui Range (north-east Otago). 84 samples have been collected to date with 250 remaining.
A full technical review of Hindon and Game Hen 2011 drill results(and all other exploration data) was conducted. This prospectivity review concluded that the late-stage fault hosted gold mineralization at these sites occurs in narrow zones, of low grade and with poor continuity. It was deemed that further exploration work on these prospects is not warranted and the permits have been relinquished and the associated accumulated exploration costs written off.
Q1 2012 EXPLORATIONACTIVITY (Placer)
In late March 2012, GlassEarth took full ownership of its placer gold production joint venture. Settlement of the transactions took place onMarch 19, 2012. Taking full control of placer mining activities should enable the Company to significantly accelerate and increase gold production capacity.
Glass Earth is continuing with gold production at the "Gunclub" mining operation while preparing for two additional operations to commence nearby in New Zealand's Otago region. Site preparation has been completed at the "Drybread" mine site, with the second placer Gold Recovery Unit (“GRU”) mining operation being commissioned in late May 2012.
The Company is also refurbishing and upgrading its GRU #1, which is expected to be installed and running as another operationat Drybread by June 2012.
A drill program was completed at Waikaia from the 6th to the 23rd March. A total of 34 holes were drilled. Three samples returned between 500 – 650 mg/m3 and one sample of 15,300 mg/m3 gold.
A second phase drill program was completed at Shepherds Flat with the completion of 45 drill holes and a total of 558m drilled. The average wash grade was 452 mg/m3 at a depth of 14m with an average thickness of 4.5m.
Q1 2012 EXPLORATIONACTIVITY (WKP) No drilling occurred at WKP in Q1 2012. A 5,500m drill program commenced in April 2012.
Q1 2012 EXPLORATIONACTIVITY (Muirs)
The seventeen hole Muirs Reef drill programme continued at the Massey Reed in Q1 2012.
MSDDH10 reached end of hole at 127.9m PQ core on the 5th March. The hole intersected a wide zone of weathered and altered coarse grained andesite with zones of quartz veining from 55m to 120m. This includes individual quartz veins up to 1.5mwide and areas of stockwork veining. Results from MSDDH10 include 2m at 2.6 g/t Au.
MSDDH11 reached 189.5m PQ core by the 17th March. The hole was terminated because of decreasing intensity of alteration. Results awaited. MSDDH12 reached 49m by the end of the quarter with several metre scale quartz veins between 0 -49m within a zone of intensely altered andesite with stockwork quartz veining. Results awaited.
A review group has been selected to analyze and re-rank the Hauraki and CVR targets in Q3 2012.
Exploration Expenditures
Mineral exploration costs form the bulk of the Company’s expenditures together with placer mining development costs. Exploration activities in Q4 included drilling at Muirs and various placer targets – some exploration, some infill drilling to improve confidence. Glass Earth contributes its 35% share to exploration costs in the Hauraki JV with Newmont. Narrative descriptions of exploration activities for the year(and prior years) are set out in the previous sections.
Exploration permits at Hindon and Game Hen (Otago) were relinquished during the period and expenditures associated with them have been written off during the period.
Mining operations suffered somewhat due to attention being diverted to the rearrangement ofownership of the placer JV, with Glass Earth acquiring full control in late March 2012.
Mining at Gunclub (Gold Recovery Unit #2) continued but mining at Drybread was suspended by mutual agreement in January. A reconfigured leased GRU suitable for fine gold recovery is being commissioned at Drybread in late May. Gold Recovery Unit #1 is nearing completion of its major refurbishment and is planned to also commence mining at Drybread in June2012.
Note (to costs)
1. General and Administration costs include accounting services ($34,000), insurance ($22,000) and New Zealand office costs ($25,000).
2. Professional fees are audit fees and legal fees incurred during the period.
3. Net salaries after exploration recharges are principally composed of the costs of the full time Chief Financial Officer, most of the costs of the Data/IT manager, and 25% of the Chief Executive Officer’s salary (to reflect the split between exploration activities and the other corporate based work that he undertakes).
4. The Company is developing an improved Investor Relations program, which covers the Canadian and European investor base (including London). The objective is to ensure that the market is fully informed of Glass Earth’s progress as it enters an exciting time in itsd evelopment path. Increased expenditure on personal presentations by the CEO and internet based dissemination of information, as assisted by IR professionals in Canada and London are budgeted to continue but at a lower level.
5. An earlier AGM has pulled share registry costs associated with that forward and the number of press releases has increased relatively.
6. The external legal fees and taxation advice costs related to the acquisition of placer activities.
So don't expect too much placer cash from the second quarter either, as a leased GRU is only just now running at Drybread (is this GRU#3, the brown primer unit pictured on the GEL pages?) and GRU#1 is getting cranked up in June. But from then on more money should be flowing in.
Some good prospects on the exploration side too. The Shepherds Flat placer gold is 14mtrs down, sounds expensive to recover. But that's for later, under a JV.
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Originally Posted by Vtrader
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