Following a series of meetings with potential investors and partners, advised investor interest in a refinancing is expected to ensure it is capitalized appropriately for its continuing hard-rock activities at WKP and Neavesville.
The Company's corporate and exploration activities for the quarter are summarized in the attached Quarterly Overview. The Company's cash position as at June 30, 2013 was $205,000 with trade payables of $753,000.
The Company faced another highly challenging quarter with continuing losses from its placer mining operations, pressured from a drop in gold prices and lower than expected productivity and grade. The wettest June ever recorded in Otago did not help. As a result, the Company reports a net mining loss for the three months ending June 30, 2013 of $506,000 vs $508,000 for the similar period in 2012.
Three months Three months Notes ended ended June 30 2013 June 30 2012 --------------- ---------------Gold Mining Revenue 1,242,000 349,000 1Mining costs (1,494,000) (792,000) 2Depreciation and amortisation (254,000) (65,000) --------------- ---------------Gross (Loss) (506,000) (508,000) 2Administrative and Personnel expenses (195,000) (414,000) 3Finance (loss)/income 20,000 (8,000)Non-cash itemsWrite-down of mineral properties (9,873,000) (6,330,000) 4Impairment of placer mining assets (970,000) - 4 -------------------------------Loss before Income Taxes (11,524,000) (7,260,000)Income tax recovery 239,000 - --------------------------------Loss after Income Taxes (11,285,000) (7,260,000) --------------------------------Notes: 1 Sales revenues of $1.24m were slightly down on Q1 sales of $1.38m, but with lower operating costs than Q1, giving very much the same operating loss. 2 Included in this figure for Q2 was a cash operating loss of $262,000 for the 3 months. Depreciation of equipment and amortisation of exploration and acquisition costs for the quarter stood at $254,000. 3 G&A expenditures down as Investor Relations expenditures reduced. 4 Write down and impairment of exploration and mining expenditures of $9,873,000 and $970,000 are discussed extensively above and in the MD&A report.
Accumulated Exploration Expenditures - Write-downs/offs
The decision to withdraw from the South Island has resulted in write downs/offs of prospects and permits in that region. The main areas of write-offs were the Sparrowhawk (Garibaldi) target and the write down of placer mining assets to net realisable values.
In the North Island, the Muirs prospect has been written-off with the permit to be handed over to the land owner (as required by the land access conditions).
Write-downs/offs totalled $2,775,000 in respect of South Island hard-rock and $4,324,000 in respect of placer activities. A further write down of $2,774,000 in respect of the Muirs prospect brought the total impairment to $9,873,000. This amount has been recorded as a loss in the Statement of Comprehensive Income.
While management devoted considerable time to improving placer mining operations, its profitability continued to be disappointing. It reported a similar negative cash cost of $262,000 for the quarter. Despite a movement to 24/7 operations in early June, this coincided with the wettest June and July recorded in Otago, causing unexpected difficulties with the mining fleet and consequent equipment failures.
The Company's response was to scale back operations to a more manageable 12/5 shift operation and seek to sell the mining assets.
About Glass Earth Gold
Glass Earth Gold is one of New Zealand's most active gold exploration companies. In the North Island, exploration efforts are focused on large epithermal gold systems in the Hauraki Region, akin to the operating Martha Hill mine, (Newmont Mining).
In the Hauraki Region, Glass Earth Gold has identified and developed significant ground positions around the active Martha Hill gold mine operations at Waihi. The Newmont-Glass Earth Gold Waihi West JV (Newmont earning in) and Hauraki JV (65/35), including drilling at the WKP discovery, are being actively explored and managed by Newmont in collaboration with Glass Earth Gold.
The recent announcement that Glass Earth Gold has acquired option rights to the Neavesville gold/silver prospect (just north of WKP) will mean an increased exploration focus in the Hauraki region.
For more information on Glass Earth Gold, please visit www.glassearthgold.com.
To receive Company news via email, contact firstname.lastname@example.org and mention "Glass Earth news" in the subject line.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) nor New Zealand Exchange Limited has reviewed this release and neither accepts responsibility for the adequacy or accuracy of this release.
Glass Earth Gold Limited
President and Chief Executive Officer
+64 4 903 4980
Glass Earth Gold Limited
Manager, Investor Relations
+ 1 514 880 0184