Glass Earth advances in New Zealand

Work on the ground has not been quite as smooth as its name implies, but Glass Earth Gold (GEL-V) looks to have several New Zealand gold projects under control and moving forward.

Some time ago the company had expected to start the next phase of drilling at WKP, its high-profile project 65%-owned by Newmont Mining (NEM-T, NEM-N), but a variety of issues including local permitting delays, heavy rains and even a helicopter pilot’s broken arm prevented the work from being done.

But as of mid-April the companies have started a 5,500-metre drill program on the target to help determine its scale. 

Results from previous drilling have indicated narrow-vein potential, with hits such as 3 metres grading 37 grams gold per tonne in hole 29, 15 metres of 9.4 grams gold in hole 25 and 10 metres of 17.2 grams gold in hole 31, and more of a bulk-tonnage potential, with hits such as hole 24 that returned 156 metres of 1.6 grams gold, and hole 27 that returned 152 metres of 1.2 grams gold.

The company reports that the WKP epithermal system has magnetic and alteration characteristics similar to Newmont’s nearby Martha epithermal mine, and there is potential to extend the system along strike by at least 1–2 km. The WKP Central zone is currently  800 metres long and 180 metres wide.

The junior explorer long tried to ramp up production at its placer operations in order to generate an alternative funding source, but a local 50% owner had apparently thwarted progress and expansion. Glass Earth has now secured full control of the placer operation — including $2-million worth of equipment — in a $4-million cash and share deal, and is now free to improve production.

The placer operation could bring $2 million in net profits this year and upwards of $6 million next year as it adds two gravity plants and increases production from 2,000 oz. gold per year to 7,500 oz. per year. The company expects it could sustain that level of production for at least four years with known resources, and expects costs of US$800 per oz. gold.

The company is also working towards having a resource estimate at its Muirs Reef project by the end of this year, with a 2,500-metre drill program underway. The project has a non-compliant historical resource of 390,000 oz. gold grading 1.5 grams gold, while the system ranges from 20 to 30 metres in width and extends north to south for 500 metres.

The Muirs reef project sits 65 km southeast of the Martha mine, which has produced over 3 million oz. gold since 1990 and still hosts several million oz. gold.

Glass Earth also announced it had made a gold discovery at its Garibaldi project, south of Muirs. The discovery is characterized by a network of quartz veins that have returned grades of up to 16.1 grams gold in trench sampling. 

The Garibaldi project remains an early stage prospect but is one of several greenfield targets the company is exploring.

The company has been strengthening its board of directors of late, with two recent appointments. Justin Cochrane, currently executive vice-president of corporate development at Sandstorm Metals and Energy (SND-V), and Adrian Fleming, president and director of Prosperity Goldfields (PPG-V) and former CEO of Underworld Resources, have both come on as directors.

Glass Earth’s shares closed at 33¢ with 68.4 million shares outstanding. The company has 26 million warrants outstanding with exercise prices ranging from 35¢ to 80¢, and recently extended the expiry date of the 8.5-million 35¢ warrants from early May to early June of this year. 

The company had $3.6 million at the end of 2011.