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Placer Gold International to join Glass Earth in Otago mining
17 May 2010 - Glass Earth Gold Ltd has signed a letter of intent with Placer Gold International Corp. to develop two placer targets in two adjacent prospects in central Otago.
Sources: Glass Earth Gold and Lindsay Clark
Glass Earth, along with its 50% partner, Dunstan Mining Ltd which manages Glass Earth’s placer mining, has signed a Letter of Intent to explore and develop two new placer operations.
These operations could significantly increase placer gold output in an area that historically produced in excess of one million ounces.
Under the venture terms, Placer Gold International will fund development work within a range of NZ$150,000 to NZ$250,000 for each of the two targets. Placer Gold would thereby earn up to 30% equity in a target.
Placer Gold may also elect to fund NZ$500,000 of the plant and equipment required for mining activities on a target, in order to earn another 20% equity in that target.
Simon Henderson, CEO of Glass Earth said: “This transaction will accelerate our ability to assess more placer potential on our permits while maintaining funding for the core activity of hard rock gold exploration.
“Cash generated from placer mining operations means more funding will go directly into the ground – what every exploration manager and investor wants”, he said.
Glass Earth earlier said that it commenced gold production at McAdie’s, Ida Valley, at the end of 2009 following the grant of Mining Permit 52018. Weekly production was in line with expectations.
Consents for the Gun Club placer gold project, Ida Valley were granted as well as Mining Permit 52021 in January 2010.
Together with the 40 tonne placer gold plant, currently leased out to L&M Mining’s Earnscleugh gold project near Alexandra, Glass Earth would have three placer projects contributing to gold production or cash flow.
Glass Earth’s technical management will focus on its hard rock exploration in Central Otago, and Hauraki-Mamaku area in the North Island.
Glass Earth also said it is undertaking a private placement financing for gross proceeds of up to Can$3,000,000 (equal to about NZ$4,100,000 at current exchange rates). The proceeds will be used for drilling four drill-ready targets in New Zealand, as well as for general purposes.
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