Glass Earth Gold Limited: Exploration Update and Financial Statements and Management's Discussion & Analysis for the 6 Months En
August 27 2009 - 10:13AM
Marketwired Canada
Glass Earth Gold Limited (TSX VENTURE:GEL) (NZAX:GEL) ("Glass Earth") announces
the release of its second quarter financial statements and Management's
Discussion and Analysis ("MD&A") report pertaining to that period.
EXPLORATION UPDATE
Glass Earth is one of the largest New Zealand-based gold exploration companies
exploring a land position of over 17,000 square kilometres in the North and
South Islands.
In the North Island, current exploration efforts are focused on the Hauraki and
Mamaku Regions.
- Hauraki Region - Glass Earth occupies a significant ground position in this
region around the Waihi/Martha Mine owned by Newmont Mining Corp. Newmont
continues to earn into the Glass Earth permits via two Joint Ventures, with
drilling continuing on the Goldwyn prospect.
- Mamaku Region - a new resistivity survey is about to commence at the Muirs
Reef prospect which has encouraging signs of a major epithermal gold deposit.
In the South Island, exploration efforts are focused on the Otago Region for
mesothermal "Macraes-style" gold targets and placer gold.
- Otago Region - As recently announced, Glass Earth is undertaking exploration
work to farm-in to the Bendigo/Rise & Shine gold prospect and is also evaluating
the potential for near term hard rock gold production at Ophir.
Placer Progress
Exploration expenditures for the quarter in the Otago Region of the South Island
of New Zealand were focused on test work to improve confidence in placer gold
mineralisation in the Ida Valley.
The purchase (in conjunction with a mining partner) of a 40 tonne floating Gold
Recovery Unit and associated refurbishment work has been undertaken in
anticipation of the granting of resource consents and other approvals to allow
bulk testing to take place. Decisions on mining would follow. The Company
considers that small scale mining could provide a sustainable cash flow to
provide additional working capital and exploration funds.
Glass Earth's exploration portfolio is being progressed as Glass Earth maintains
its objective to discover new large gold deposits in New Zealand.
Funds
Given the tighter operating conditions, the Company's working capital of $1.2
million as at 30 June 2009, together with cash from or work undertaken by
contributing joint venturers, is now budgeted to carry the Company through into
early 2010. Cash generated from placer mining (Ida Valley) or boutique hard rock
mining (Ophir) would be additional to this.
FINANCIAL RESULTS
Glass Earth is an exploration company and therefore classified as being at the
'development stage', as it has no mining or other significant income. With all
general and administration expenses being expensed, Glass Earth records losses
each year/period arising from the expensing of these cash operating costs as
well as other non-cash expense items.
The Company recorded a loss for the quarter of $1.79m of which $1.7m related to
exploration expenditure write downs (see further comment below). The Company
also recorded a smaller foreign exchange gain in the second quarter. Corporate
and administrative expenses continue to be significantly reduced compared to
previous quarters.
Six Six
months months
Three months Three months ended ended
ended 30 June ended 30 June 30 June 30 June
Amounts in C$000's 2009 2008 2009 2008
Revenue
Exchange translation gains 57 7 226 15
Other 35 - 35 -
--------------------------------------------------
92 7 261 15
Expenses (174) (367) (340) (627)
--------------------------------------------------
Loss for the period before
the undernoted (82) (360) (79) (612)
Write down of Mineral
Properties (1,717) - (1,717) -
Interest Income 4 30 17 55
--------------------------------------------------
Loss before Income Taxes (1,790) (330) (1,779) (557)
Exploration Expenditures
As signaled prior, the Company lodged applications to amend or defer certain
exploration work programmes and to also reduce areas covered by existing
permits. This deliberate policy of managing work programmes relative to
available funding and prioritization of targets was preceded by a rigorous
analysis of exploration efforts to date and re-ranking of remaining targets.
Lower ranked targets were compared relative to tenure costs (rentals and work
programs) and resulted in a decision to relinquish certain targets and ground.
A review of accumulated exploration expenditure associated with those targets
resulted in a write down totaling $1,717,000. The targets relinquished were
located in the North Island and are in the Regions as shown below:
Amounts in C$000's
----------------------------------------------------------------------------
December Expenditure to Write Down to June 30
Project 31, 2008 June 30, 2009 June 30, 2009 2009
----------------------------------------------------------------------------
Hauraki Region 1,695 - (716) 979
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Waihi West Joint Venture 103 - - 103
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Mamaku Region 1,579 155 (33) 1,701
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Central Volcanic Region 5,366 43 (968) 4,441
----------------------------------------------------------------------------
Otago Region 4,697 301 - 4,998
----------------------------------------------------------------------------
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13,440 499 (1,717) 12,222
---------------------------------------------------
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Qualified Persons
Glass Earth's exploration programmes are carried out under the supervision of
Glass Earth's President and CEO, Simon Henderson, M.Sc, M.AUSIMM, F.SEG. Mr.
Henderson meets the qualified person requirements (as defined by National
Instrument 43-101) with more than 30 years of experience in the gold mining and
exploration industry.
To receive Company news via email, contact lindsay@chfir.com and mention "Glass
Earth news" in the subject line.
To view the map accompanying this release please click the following link:
http://media3.marketwire.com/docs/gle_map1.pdf
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