Listed explorer Glass Earth Gold has for the first time booked gold production in a financial report, up to a point cushioning a $NZ866,000 loss, for its half-year to June.
Glass Earth, having spent more than $25 million in exploration mainly around around Otago during the past three years, has turned to boutique gold mining to boost cash-flows, booking $119,000 income from alluvial (loose) gold mining in Central Otago, which included leasing-out of production equipment.
While dipping below $1 million in cash reserves late last year, duel-listed Glass Earth, which is principally listed on the mining-friendly Toronto stock exchange and NZX, went on to raise a total $3.9 million in private placements in June this year.
Glass Earth's chief executive, Simon Henderson, said yesterday the cash contribution from the company's first mining operation, its McAdies prospect in the Ida Valley in Otago, including the lease of a gold recovery unit for five days per week, totalled $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," Mr Henderson said.
He said an additional mine was expected to go into production in September, in the Manuherikia Valley.
In mid-March, Glass Earth partnered with Placer Gold International Corp, the pair holding permits for adjacent prospects in the Manuherikia Valley, near Alexandra. Placer Gold is expected to fund initial development costs up to $250,000, for a 30% stake in the targets, and has an option to put $500,000 in for plant and equipment to gain a total 50% stake.
Glass Earth's $866,000 loss for the six months included accumulated exploration expenditure totalling $574,000, compared to the same period in 2009 of a six-month loss of $1.7 million, the majority of which was from exploration costs.
Mr Henderson said as exploration costs formed the bulk of expenses, they were kept at a "low level" during the first quarter to conserve cash as the mining development efforts progressed.
Following the success of the private placement in June, Mr Henderson said exploration activities were "increased slightly" during the second quarter.
