Gold recovery covering costs

Glass Earth Gold chief executive officer Simon Henderson holds  3.4 ounces of gold recovered from...
Glass Earth Gold chief executive officer Simon Henderson holds 3.4 ounces of gold recovered from the company's first Omakau operation in June this year. Photo by Sarah Marquet.

Glass Earth Gold is breaking even at its mining operations in Central Otago's Manuherikia Valley as the boutique producer moves into better gold-producing ground.

From modest recoveries beginning in March of 10 ounces of alluvial (loose, water-deposited) gold per week, Glass Earth has taken more than 70 oz per week for nine of the past 13 weeks to the end of October.

While having spent close to $40 million during about six years in widespread exploration, mainly in the South Island but now with a more central-North Island focus, Glass Earth's lack of cashflow has left it on a tightrope at times.

Before the boost in Central Otago gold recovery, Glass Earth had $1.25 million cash in hand, having raised a total $3.4 million in two separate private placements.

Glass Earth chief executive Simon Henderson said cash flow from the Central Otago operations were covering general and administrative expenses and "modestly" contributing to its exploration budget at the WKP prospect, north of the Martha mine at Waihi, in the North Island.

He said production from the Central Otago operations at the Drybread tenement, known as Hecklers and Morans, is now reclaiming about 70 to 80 ounces of gold per week, doubling its output since an update in late August.

According to weekly gold production data, Glass Earth has recovered at least 1375oz to the end of October.

"This higher gold production has been achieved in some lower-grade areas and now, both gold recovery units are working their way to higher-grade ground where further production increases and efficiencies are anticipated," Mr Henderson said in a market statement this week.

Mr Henderson said in June that if production targets could be hit next year, gold revenue in 2013 could be up to $6 million.

Earlier this week Glass Earth announced it was in a 50:50 venture with mining identity Geoff Loudon in taking an option to buy a gold and silver prospect north of the central North Island Martha mine.

Depending on access arrangements, Glass Earth hopes to drill a minimum 5000m within the 30sq km block, later this summer, before making a decision on purchasing the tenement from Eurasian Minerals Ltd.



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