The Dalgaranda process plant.
Only weeks after Gascoyne Resources turned to shareholders to raise A$20.6-million in an entitlement offer, it was announced on Monday that FTI Consulting had been appointed as voluntary administrators of the ASX-listed gold mining company.
The administrators – Michael Ryan, Kathryn Warwick and Ian Francis – said that Gascoyne had been producing below expectations at the Dalgaranda gold project, in Western Australia, despite efforts to optimise operations by targeting improved mine grade, resource reconciliation and increased material movements.
FTI explained that a new resource model defined a higher tonnage, lower grade deposit than previous resource models and, on the basis of the new model, cash flow analysis indicated that the lower predicted grades, particularly in the next six months, would result in a “material” cash flow shortage.
The administrators noted that they would continue to operate Gascoyne on a “business as usual” basis, while recapitalisation options were explored.
On Friday, nonexecutive chairperson Sally-Anne Layman and nonexecutive director Mark Le Messurier resigned as directors. CFO Mike Ball and CEO Richard Hay also resigned as statutory officers of the company.
Gascoyne previously lowered its 2019 production expectations at Dalgaranga from between 105 000 oz and 115 000 oz, to between 92 000 oz and 102 000 oz, after a review of the Gilbey resource model reduced the mineral inventory by some 22 000 oz.
Gascoyne’s trading has been suspended on the ASX. It closed at A$0.039 a share on Wednesday – a far fetch from the A$0.56 a share it traded at on June 1 last year.