Glass Earth Gold Limited
TSX VENTURE : GEL

Glass Earth Gold Limited

August 18, 2010 08:30 ET

Glass Earth Gold Announces Financial Results and MD&A for 6 Months to 30 June 2010; Incentive Stock Options Granted

WELLINGTON, NEW ZEALAND--(Marketwire - Aug. 18, 2010) - Glass Earth Gold Limited (TSX VENTURE:GEL)(NZAX:GEL) ("Glass Earth") announced today that it has filed its June 30 2010, second quarter Financial Statements and associated Management's Discussion and Analysis ("MD&A") report pertaining to that period with appropriate regulatory authorities. 

FINANCIAL STATEMENTS and MANAGEMENT'S DISCUSSION & ANALYSIS for the six months ended 30 June 2010

In April 2010, the Company embarked on a fundraising exercise and on June 10, 2010 the Company announced the completion of the fundraising exercise which raised a gross $2.7million. 

The Company is an exploration company and therefore classified as being at a 'development stage', as it has limited mining or other significant income. With all general and administration expenses being expensed, the Company records losses each year arising from the expensing of these cash operating costs as well as other non-cash expense items. Periodical reviews of capitalised exploration expenditures is undertaken and write offs and provisions are expensed to the Consolidated Statements of Operations, Comprehensive Loss and Deficit.

Mineral exploration costs, which form the bulk of the Company's expenditures, were maintained at a low level during the first quarter as cash was conserved and placer mining development efforts progressed. Exploration activities increased slightly in the second quarter and, subsequent to refinancing in June 2010, increased exploration activity is planned.

Revenue from Mining Operations

The cash contribution from the Company's initial placer mining operation (including the lease of a Gold Recovery Unit on a 5 day week basis) totaled $119,000 for the quarter. 

The Gold Recovery Unit has been leased out on a 24/7 basis since mid July and an approximate doubling of revenue from that source is anticipated in the third quarter. An additional placer mine is expected to be put into production in September.

Significant Expenses of a Corporate Nature

The net loss for the six months ended June 30, 2010 was $866,000, including a write off of accumulated exploration expenditures totaling $574,000 (2009: $1,779,000 – exploration write-offs being $1,717,000). 

Significant expense categories are discussed as per below:

Expenditure 2010   2009 Note
General and administration 133   111 1
Professional fees 31   13 2
Net salaries (after exploration charges) 120   93 3
Consulting fees 50   52  
Travel and accommodation 10   17  
Amortization 26   34  
All others 47   20  
Total 417   340  

Note

  1. General and Administration costs include accounting services ($46,000), insurances ($30,000) and New Zealand office costs ($25,000).
  1. Professional fees are audit fees and legal fees.
  1. 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).

INCENTIVE STOCK OPTIONS GRANTED

Glass Earth, pursuant to its rolling stock option plan approved by shareholders at the annual general meeting held on 29 June 2010, granted incentive stock options to directors, executives, employees and consultants entitling them to purchase up to an aggregate of 1,755,000 common shares, exercisable at a price of C$0.21 per common share and expiring 17 August 2015.

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.

About Glass Earth Gold Limited

Glass Earth is one of the largest New Zealand-based gold exploration companies exploring a land position of over 12,000 km2 in the North and South Islands. The Company maintains its objective to discover new large gold deposits in New Zealand, and it is currently mining placer gold under its Otago permits to provide funding for its hard rock gold exploration. With its main office in Wellington, New Zealand, Glass Earth Gold Limited is listed on the TSX Venture Exchange (TSX VENTURE:GEL) and the New Zealand Alternative Stock Exchange (NZAX:GEL).

To receive Company news via email, contact jennie@chfir.com 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.

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