Glass Earth takes stake in Ophir

Glass Earth is moving from being a gold explorer to producer and may undertake open-pit mining at Ophir, in central Otago. Photo / Supplied

Toronto-listed Glass Earth Gold has taken a 50 per cent stake in private gold explorer Ophir Gold and will spend at least $250,000 evaluating the prospect near Omakau in Central Otago.

If a decision to mine is made, the 50:50 joint venture's objective is to undertake open-pit mining at Ophir and process the ore, with Glass Earth's share providing some cash flow for the exploration company.

The joint venture is another step by Glass Earth to move from being a gold explorer to producer and underpin its future with some cash flow.

Glass Earth raised $25 million in several placements since 2005 and by May this year had about $2.2 million cash-in-hand, enough to finance it through to July next year, Glass Earth chief executive Simon Henderson has said.

Ophir had numerous highly prospective mineralised reefs, as well as near-surface gold bearing gravels, Henderson said.

The Ophir tenement covers about 640ha near Omakau, northeast of Alexandra, and historically had delivered 1200oz of gold by 1939, while test drilling by Ophir Gold in 2006 had estimated up to 109,000oz averaging 3.99 grammes of gold per tonne.

Henderson said should a decision be made to go ahead, Glass Earth would be responsible for funding the design, permitting and installation of a processing plant, but Ophir would reimburse Glass Earth for its share of the plant acquisition from its after-tax profits.

Glass Earth has also undertaken to contribute "additional ground" around Ophir Gold's existing permit.

Henderson said the predominance of coarse gold raised difficulties in adequately testing such mineralisation by drilling and he preferred to tackle the appraisal for mining by bulk testing of ore around several of the vein systems.

"Irrespective of the smallish scale of the initial mining approach, it may provide positive cash flow for Glass Earth, especially as gold prices remain high," Henderson said.

Privately-owned Ophir Gold raised $700,000 in a private placement in mid-2006 and undertook a 17-hole drilling programme, increasing its estimated gold resource more than eight-fold. Ophir Gold had earlier in the same year completed a similar programme costing $400,000.

Ophir Gold's more than 7 million shares are now held by nine separate companies and 32 individual shareholders.

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