JOHANNESBURG (miningweekly.com) – Aim-listed GoldStone, which is focused on developing its Homase-Akrokerri gold project, in Ghana, on Tuesday said its going concern status was dependent on securing working capital in the short and longer term to exploit the project.
The company entered into a £400 000 loan agreement with strategic partner, Paracale Gold, in April, which is conditional upon shareholder approval at GoldStone’s annual general meeting on June 2.
Should the loan be drawn in full and converted, it, together with the company's existing cash, is expected to be sufficient to fund GoldStone’s working capital requirements through to early 2018.
However, to advance its projects, GoldStone will still need to raise additional funds and together with an outstanding claim by a former director, the company will incur a contingent liability. In the event the claim results in a court hearing and the ruling goes against GoldStone, it could potentially result in the company becoming insolvent.
Further, the miner noted that if shareholders do not approve the conversion of the Paracale loan, the company will be unable to draw the £200 000 second tranche of the loan.
Further, the initial tranche, plus accrued interest and a default fee of 50% of the initial tranche will be repayable in full within six weeks.
If this was to occur and the company is subsequently unable to secure the necessary funding in the short term to repay the loan and to provide general working capital, it is highly likely that the company will not be able to meet its liabilities as they fall due and may be forced into further insolvency proceedings.
“The focus going forward is to unlock value through the potential development of Homase-Akrokerri, with the ultimate aim being to bring the project back into production and to place the company on a sound financial footing,” said chairperson Neil Gardyne.