Glass Earth Gold Limited

Glass Earth Gold Limited

August 27, 2009 10:13 ET

Glass Earth Gold Limited: Exploration Update and Financial Statements and Management's Discussion & Analysis for the 6 Months Ended 30 June 2009

WELLINGTON, NEW ZEALAND--(Marketwire - Aug. 27, 2009) - 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.


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.


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.


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

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
Waihi West Joint Venture 103 - - 103
Mamaku Region 1,579 155 (33) 1,701
Central Volcanic Region 5,366 43 (968) 4,441
Otago Region 4,697 301 - 4,998
13,440 499 (1,717) 12,222

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 and mention "Glass Earth news" in the subject line.

To view the map accompanying this release please click the following link:

Neither 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.

Contact Information