Gascoyne relists on ASX

Gascoyne Resources has relisted on the ASX, following a $125 million recapitalisation that helped the embattled goldminer repay its creditors and continue mining operations.

The recapitalisation plan was part of a deed of company arrangement (DOCA) put forward by Gascoyne’s administrators, FTI Consulting.

Gascoyne had entered administration with about $100 million in debt in mid-2019, after failing to meet production targets at its flagship Dalgaranga goldmine, near Mt Magnet.

In June this year, FTI recommended Gascoyne creditors support the DOCA, which was formed with the intention Gascoyne continued to operate under its current group structure and unsecured creditors would receive a full return.

The DOCA also included an $85 million placement, completed earlier this month.

Gascoyne has now emerged from administration, with a cash balance of more than $30 million and a reduced bank debt of $40 million.

Managing director Richard Hay said the company had sufficient working capital to continue its Dalgaranga operations.

“The fact that we are a Western Australia-based business has also meant very minimal impact from COVID-19 with no operational setbacks,” he said.

“Furthermore, the results from our recent drilling program highlight the potential to enhance the mine life at our Dalgaranga operation.”

Gascoyne revised its mine plan for Dalgaranga in July to include a seven-year mine life, and annual production of between 70,000 ounces and 80,000oz within the first four years.

The company expects to produce about 400,000oz over the remaining mine life at an average all-in sustaining cost to be $1,400-1,500/oz.

Gascoyne plans to extend the mine life via further resource definition drilling at the project’s Gilbey’s and Sly Fox deposits.

The company relisted at 52 cents per share, with a market capitalisation of $138 million.