Glass Earth, one of New Zealand's largest gold explorers, commissioned three gold recovery units in the Maniototo area in Central Otago during the past two months to unearth alluvial (loose) gold in a bid to boost cash-flows, but was hampered by snow at its sites.
Glass Earth holds $1.57 million cash in hand, compared with $2.48 million at June last year.
Chief executive Simon Henderson said there had been a "strategic review of cash allocation" done during the second quarter, to focus cash on "best potential" gold targets.
Subsequently, exploration work carried out between 2005 and 2008 at older prospects, and a "pruning" of the prospect portfolio and its overall permit holding costs, prompted $6.3 million in writedowns, Mr Henderson noted.
There had been several other "one-off costs", including a surge in administrative and readying for gold production costs, and asset writedown, he said.
"While these one-off charges have resulted in a loss for the quarter, they will support the company's ongoing production programme which should generate a steady flow of cash to support its administrative and exploration costs." In June Mr Henderson had forecast gold revenue for the remainder of the year of up to $2 million, and if production targets were met, estimated gold revenue in 2013 at up to $6 million.
Also in June, Glass Earth clinched $C2.35 million ($NZ2.95 million) in private equity placements from Canada, to refinance a $4 million buy-out of its former joint venture partner.
The partner buy-out was $2 million in shares and $2 million cash, the latter to comprise 25 monthly payments of $80,000 from proceeds of the alluvial gold diggings around the Maniototo.
