KEY POINTS:
Gold explorer Glass Earth has begun its first test-drilling programme in Otago following completion of a $4 million aerial survey.
While Glass Earth, listed on the mining-friendly Toronto stock exchange and the New Zealand exchange's alternative board, has about $4 million cash, the high costs of drilling programmes
suggest it may need to go back to the market for capital some time soon.
"We can only capital raise on the back of good [drilling] results. Our total focus is the drilling programmes at present," Glass Earth chief executive Simon Henderson said.
Glass Earth raised $10 million when it floated in October 2006 and a further $6.3 million in Toronto last August.
Henderson confirmed yesterday that the company still had about $4 million in working capital in the bank.
Drilling has begun at the Sparrow Hawk prospect, about 20km south of Omakau in Central Otago, with up to three holes in three different zones totalling 1000m during the next eight weeks.
Since completion of the Otago aerial surveys covering 1.3 million ha in September last year, Glass Earth geological teams had taken a total 5500 soil samples, 600 rock chip samples and 700 stream sediment samples covering 24 potential gold prospects, Henderson said yesterday.
The Gold & Pine area near historical Gabriels Gully at Lawrence may be the next target by the end of July with up to four holes.
Drilling is then scheduled at the historical "priority target" Serpentine prospect, on Rough Ridge, 13km north of Lake Onslow, with a minimum three to four holes totalling 1500m during October and November. The Department of Conservation this week gave clearance for the drilling, Henderson said.
"A smaller, more specialised team is now engaged in the drilling programmes which will concentrate on the lower elevation prospects accessible in the winter months - June to September in this region."
He expected the present Sparrow Hawk drilling would take approximately two months to complete and to receive the laboratory assay results, but noted yesterday that progress of about 15m per day was slower than anticipated to complete one hole every fortnight.
The company's other two of the five priority Otago prospects are Sheepwash, south of Oceana Gold Corp's Macraes mine and Game & Hen site, near historic Hindon workings.
Henderson heads to North America this week for an annual two-week visit to update investors on progress. However, it was not a formal capital raising exercise, he said.
Glass Earth shares, which listed for 25c in October 2006, with a two-year option for a 2:1 share issue at 35c each, have traded at a high of 25c and low of 13c.
Since March trading of 24c its shares have drifted back to 18c. In the North Island, Glass Earth exploration is focused on the Hauraki/ Central Volcanic Region where Newmont Mining operates in Waihi and Favona mines.
- OTAGO DAILY TIMES
