Administrators appointed for Reeds’ Meekatharra
PERTH (miningweekly.com) – Trading in the shares of ASX-listed Reed Resources was suspended on Monday as the company appointed administrators to its Meekatharra gold project, in Western Australia.
Last month, Reed announced that it would defer Stage 2 and 3 development of the Meekatharra operation, citing the current price environment and the challenging equity markets as its reasons.
Lower head-grade and mine-to-mill ounce reconciliation also adversely affected production at Meekatharra.
Despite the company’s best efforts to mitigate the short-term cash-flow impact of these issues, and to improve mine-to-mill ounces, the project has continued to underperform, placing strain on Reed subsidiary GMK Exploration.
Reed noted that GMK Exploration was unable to continue to operate the Meekatharra gold project on a sustainable basis without further significant funding, which the group has been unable to secure. As a result, administrators have now been appointed to GMK Exploration.
Reed also announced a full review of its operational strategy in respect of its other projects.
Earlier this month, Reed said it would continue with the divestment of its noncore assets, after unsuccessfully trying to sell its Comet Vale project to fellow-listed Crest Minerals.
The company’s shares would likely remain suspended until August 23.
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