WELLINGTON, NEW ZEALAND--(Marketwired - May 24, 2013) - Glass Earth Gold Limited (News - Market indicators)(NZAX:GEL) ("Glass Earth" or the "Company") announced today that it has filed its March 31, 2013 first quarter Financial Statements and associated Management's Discussion and Analysis ("MD&A") report pertaining to that period with regulatory authorities. 

Operational Activities

The Company's corporate and exploration activities for the quarter are summarized in the attached Quarterly Overview. The Company's cash position as at March 31, 2013 was $1,192,000 with trade payables of $497,000. 

The Company faced a highly challenging quarter with the profitability of its placer mining operations pressured from a drop in gold prices and lower than expected productivity and grade. As a result, the Company reports a net loss for the three months ending March 31, 2013 of $820,000 vs $1,236,000 for the similar period in 2012. 

Notes:

1. Sales revenues of $1.38m for Q1, from mining operations, matched the previous Q4 sales of $1.4m and were a significant advance on the prior year period. 
2. The mining operations reported a cash operating loss of $246,000 for the 3 months. Depreciation of equipment and amortisation of exploration and acquisition costs for the quarter stood at $270,000. 

Placer Mining

While management devoted a considerable time to setting up placer mining operations, its profitability has been disappointing. It reported a negative cash cost of $246,000 for the quarter, with lower cash losses expected for Q2. This is due to continuing productivity and cost inefficiencies in operating two sites, during the day only, coupled with a dramatic drop in the price of gold.

During Q1 2013, 78,000m³ of gold bearing wash was processed at a recovered grade of 330mg/m³ for 830oz gold. That was 20% under budget and the major reason for cash generation underperformance. 

Therefore, the Company's response to the losses incurred is to maximise efficiencies and reduce leased equipment costs by changing to a mining regime on a 24/7 basis on one site only. Grade control is also being reassessed in the light of the reduced gold price. The changeover is scheduled for late May. 

"In spite of the severity of the adverse market conditions, management believes in the benefits of a consistent and focused strategy, supported by the full support and dedication of our team", said Simon Henderson, CEO of Glass Earth Gold.

In Q2, Glass Earth is expecting to report a cash loss from placer mining but that trend is expected to reverse with the above noted changes and placer mining is expected to generate positive cash flow in Q3 and Q4 while producing approximately 2,600 oz of gold. 

Simon Henderson added: "The uncertainties around the price of gold remain a major concern. Our forecasts for the next quarter points towards modest profitability and positive cash generation, based on price of US$1,400/oz, which we believe is sustainable. Moreover, the Glass Earth gold team remains committed to delivering enhanced results on operational metrics, therefore supporting the validity of our business model at this stage. We believe that consistency and determination in the execution of our business model remains the Company's best asset and will enable us to ride through this challenging period."

About Glass Earth Gold

Glass Earth Gold is one of New Zealand's most active gold exploration companies with landholdings proximal to producing deposits and cash flow from its wholly owned placer projects. With an experienced geological team the Company is exploring promising gold prospects across both the North and South Islands.

In the North Island, exploration efforts are focused on large epithermal gold systems in the Hauraki Region, akin to the operating Martha Hill mine, (Newmont Mining).

In the Hauraki Region, Glass Earth Gold has identified and developed significant ground positions around the active Martha Hill gold mine operations at Waihi. The Newmont-Glass Earth Gold Waihi West JV (Newmont earning in) and Hauraki JV (65/35), including drilling at the WKP discovery, are being actively explored and managed by Newmont in collaboration with Glass Earth Gold. 

The recent announcement that Glass Earth Gold has acquired option rights to the Neavesville gold/silver prospect (just north of WKP) will mean an increased exploration focus in the Hauraki region. 

In the South Island, exploration efforts are focused on the Otago Region, home to OceanaGold's Macraes Goldfield, for identification of mesothermal "Macraes-style" gold targets and revenue generation through placer (alluvial) gold production.

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, and has reviewed and approved the technical information given above.

For more information on Glass Earth Gold, please visit www.glassearthgold.com.

GLASS EARTH GOLD LIMITED ("GEGL")

For the three months ended March 31, 2013

QUARTERLY OVERVIEW

EXPLORATION

The three key aspects of the Company's strategy are:

1. Transition advanced projects from exploration to delineation
   
   
2. Demonstrate not just geological potential; but also the skills, resources and determination to deliver on the promised value.
   
   
3. A third key ingredient here is the focus on just two projects, Wharekirauponga (WKP) and Neavesville, sustained by the placer mining being run autonomously by its own Operations Manager. The aim is to deliver within a 2-3 year timeframe, on both projects.
   
   

Progress on these aspects is as follows:

Wharekirauponga (WKP) Gold Project in Hauraki, New Zealand

Newmont Waihi Gold (65%); Glass Earth Gold Limited (35%)

The HJV has commenced a significant exploration programme for 2013, focussing initially on the evaluation of the Eastern Graben Structure and to include a project first resource estimate, metallurgical test work, rock engineering study, geophysics and a 2,500m Diamond drill programme. The estimated cost for this programme is NZ$2.7 million (C$2.2m).

In April 2013, the Company announced the results of drill holes 36 and 37 at the WKP gold-silver prospect, Hauraki, New Zealand and, after a period of three months, when drilling was interrupted due to the drought conditions prevailing in New Zealand, the commencement of its 2013 Diamond drill program.

Holes WKP 36 and 37 carried modest grade intersections, and bring useful information on the structure of the mineralised system that occurs at WKP and contribute to narrowing down targets for the current drilling campaign.

This marks a further step forward in the development of this project, where several broad zones of 100m of 1 g/t gold and silver, and significant high grade intersections 3-9m of 15-60 g/t gold and silver have encouraged the exploration team. Results to date have demonstrated that the WKP project as a whole represents a very large gold mineralised system.

Neavesville Gold Project in Hauraki, New Zealand (Glass Earth 50%)

Located immediately north of the WKP project and Martha Mine, Hauraki, New Zealand).

Prior to work commencing access arrangements with local Iwi landowners is required, these negotiations are progressing.

Following successful access negotiations, field work is planned to:

• re-interpret geological model & recalculate resource potential;
• Commence resource drill programme to update and improve confidence of resources 
• follow-up on additional multiple gold/silver targets identified.

The Neavesville project offers the opportunity to have management and control over the development of a significantly advanced gold /silver project. The project also offers tantalising new targets to increase the size and potential of the prospect. In the vicinity of GEG's other Hauraki projects (WKP, Glamorgan, and Waihi West), Neavesville will focus GEG's exploration/development efforts in the region of Newmont Waihi Gold's, Martha Hill mining operations.

PLACER MINING - Central Otago, New Zealand

The technical work in the NI 43 101 Technical Report on Glass Earth's Placer Projects, lodged in February 2013, consolidated GEGL's existing knowledge of its placer gold resources offering potential to extend the placer mining operations for a significant period.

• Sales revenues of $1.38m for Q1, from mining operations, matched the previous fourth quarter sales of $1.4m and were a significant advance on the prior year period (3 months to 31 March 2012, $0.167m). 
  
  
• The mining operations reported a cash operating loss of $246,000 for the 3 months. Depreciation of equipment and amortisation of exploration and acquisition costs for the quarter stood at $270,000. 
  
  
• The Company's response is to mine on a 24/7 basis on one site only, in order to maximise efficiencies and reduce leased equipment costs. Grade control is also being reassessed in the light of the reduced gold price. The changeover is scheduled for late May. 
  
  
• In Q2, Glass Earth is expecting to report a lower cash loss from placer mining but that trend is expected to reverse with the above noted changes and placer mining is expected to generate positive cash flow in Q3 and Q4 while producing approximately 2,600 oz of gold. 
  
  

FINANCIAL

The Company's cash position as at March 31, 2013 was $1,192,000;

• Trade payables totalled $497,000;
• Current and term liabilities in relation to the placer acquisition comprise sixteen monthly payments of NZ$80,000 (C$65,936);