WELLINGTON, NEW ZEALAND--(Marketwire - May 29, 2012) - Glass Earth Gold Limited (TSX VENTURE:GEL)(NZAX:GEL) ("Glass Earth" or the "Company") announced today that it has filed its March 31, 2012 first quarter Financial Statements and associated Management's Discussion and Analysis ("MD&A") report pertaining to that period with regulatory authorities.
Glass Earth is a gold exploration company and therefore classified as being at the 'development stage', as it currently has modest mining income. With all general and administration expenses being expensed, Glass Earth records losses each quarter/year arising from the expensing of these cash operating costs as well as other non-cash expense items.
The Company had a net loss for the three months ending March 31, 2012 of $1,236,000 vs $61,000 for the similar period in 2011.
months months Notes
Mar 31 2012 Mar 31 2011
Revenue 167,000 251,000 1
Cost of revenue (191,000) (122,000)
Gross (Loss)/Profit (24,000) 129,000
Administrative and Personnel expenses (346,000) (145,000) 2
Salaries (net of exploration costs) (64,000) (58,000)
Finance income 14,000 13,000
Stock based compensation (556,000) - 3
Write down of mineral properties (260,000) -
Loss before & after Income Taxes (1,236,000) (61,000)
1 Placer mining continued essentially as a single operation for most of
the quarter as negotiations for the acquisition of the other 50% of the
placer JV were completed. Preparatory work for additional operations
impacted operating costs.
2 Legal and tax advice of $98,000 in respect of the placer acquisition
together with an increase in investor relations costs to $99,000
account for most of the increase here.
3 Options granted under the Company's Stock option Plan are allocated a
deemed value based on the Black Scholes mathematical model for pricing
options. Given the high volatility of the Company's share price, the
resultant calculation is also high.
The Company's cash position as at March 31, 2012 was $2,369,000 compared to $3,801,000 for the same date in 2011. Current liabilities in respect of the placer acquisition will require funding (see further comment in the Quarterly Overview at the end of this press release).
The Company's corporate and exploration activities for the quarter are summarized in the attached Quarterly Overview.
To view Glass Earth Exploration Regions, please go to: http://www.glassearthgold.com/i/pdf/2012-05-29_NRM.pdf.
Mr Simon Henderson, MSc Geology (CODES), an AusIMM Chartered Professional under the Discipline of Geology; is a Qualified Person as defined by National Instrument 43-101 and an employee of the Company, has reviewed and approved the technical information given in this press release.
About Glass Earth Gold Limited
Glass Earth is one of the largest New Zealand-based gold exploration companies exploring a land position of approximately 10,000 square kilometres in the North and South Islands.
In the North Island, exploration efforts are focused on large epithermal gold systems in the Hauraki/Central Volcanic Region. This Region is host to the 10 million ounce Martha Gold Mine, (Newmont Mining).
Hauraki Region - Glass Earth occupies a significant ground position around Newmont's currently active Waihi gold operations; The Newmont-Glass Earth Waihi West JV (Newmont earning 60%) and Hauraki JV (North and Central Areas - 65/35) are currently being explored and managed by Newmont.
Central Volcanic Region - Glass Earth has defined several significant epithermal gold targets in this region including the Muirs Reef project (Mamaku district).
In the South Island, exploration efforts are focused on the Otago Region for mesothermal "Macraes-style" gold targets and alluvial gold.
Visit the Company's website at www.glassearthgold.com.
GLASS EARTH GOLD LIMITED
for the three months ended March 31 2012
PLACER MINING - Acquisition and Growth in Otago, New Zealand
-- Placer mining continued for most of the quarter with only one Gold
Recovery Unit effectively operating at a time. Cash contribution from
the Company's then 50% owned placer mining operation(s) totaled a
disappointing $12,000 for the quarter ended March 31, 2012;
-- The placer joint venture owned 3 Gold Recovery Units ("GRU") and had
mining permits and resource consents to allow all three to be operating;
-- On March 15, 2012, the Company moved to acquire the other 50% of the
placer JV, to allow improved planning and coordination so all three
sites could be mining;
-- The Company has commissioned the second GRU at Drybread and the third
GRU is planned for commissioning in June (also at Drybread).
-- The full benefits of the increased throughput and 100% ownership should
become apparent in Q3 with a significant improvement in gold production
and cash generated.
-- The Company's cash position as at March 31, 2012 was $2,369,000;
-- Trade payables totaled $679,000;
-- Liabilities in relation to the placer acquisition comprise a lump
sum payment of NZ$1,500,000 ($1,233,000) payable June 11th 2012 and
twenty five monthly payments of NZ$80,000 (C$65,768) commencing July
-- Management and Directors are pursuing several alternatives to ensure
funding is available to meet the lump sum payment;
-- Financial results - The net loss for the three months ended March 31,
2012 was $1,236,000 comprised primarily of non-cash items including a
write-off of accumulated exploration expenditures of $260,000 and a
deemed value of $556,000 in respect of the granting of stock options to
directors, management and staff.
-- WKP gold project in Hauraki, New Zealand (Glass Earth 35%)
5,500m diamond drill program announced at the WKP gold-silver prospect
(April 2012 start)
-- MUIRS gold project in Mamaku, New Zealand (Glass Earth 100%)
Seventeen hole diamond drill program underway
A 17 hole drill program of approximately 2,345m at the Massey Reef
commenced in late November 2011 with the intention that it enable a
resource calculation to be undertaken for the Massey Reef;
-- MSDDH08 - variable quartz veining throughout. Results include 17m @
1.71 gm/t Au; MSDDH09 intersected quartz veining from 64.6m to 67m
Results included 2m of 38.4 gm/t Au; MSDDH10 intersected zones of
quartz veining from 55m to 120m. Results from MSDDH10 include 2m at
2.6 g/t Au.;
-- MSDDH11 reached 189.5m and was terminated because of decreasing
intensity of alteration. Results awaited.
-- MSDDH12 reached 49m by the end of the quarter with several meter
scale quartz veins within a zone of intensely altered andesite with
stockwork quartz veining. Results awaited.
-- GARIBALDI gold project in Otago, New Zealand (Glass Earth 100%)
Gold Discovery at Garibaldi
-- Glass Earth has made a new gold discovery at its Garibaldi project
in Central Otago.
-- Regional geochemical surveys and detailed soil sampling recorded
individual results up to 9,750 ppb Au.
-- Narrow outcropping quartz veins gave anomalous rock chip values (up
to 8.73 g/t gold)
-- Eight trenches completed in Q1 2012 exposed a stock work of quartz
veins, up to 1.5m in width with assay results up to 16.1 gms/t gold.
/T/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.