FTI Consulting announced that the directors of Gascoyne Resources and its subsidiaries resolved on 2 June 2019 to appoint Michael Ryan, Kathryn Warwick and Ian Francis as Voluntary Administrators.
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As previously stated in GCY ASX announcements, GCY’s focus has been on ramping up mining operations at its 100% owned Dalgaranga Gold Project to increase ore releases and lift grades available for processing.
Despite extensive efforts by GCY to optimise operations by targeting improved mined grade, resource reconciliation, and increased material movements, GCY has continued to experience issues with reconciliation to Ore Reserves and Mineral Resource models materially below expectations impacting the level of ounces GCY has been able to produce.
On 28 May 2019, a new preliminary unclassified Localised Uniform Conditioning (LUC) resource model for the Gilbeys deposit produced by GCY’s resource consultants was recommended to the Board as the preferred model from several that had been developed.
The new model, although supporting the global gold inventory, defines a higher tonnage lower grade deposit than previous resource models.
On the basis of the new LUC model, and urgently prepared pit mining schedules based on the new model, high level cash flow analysis indicates that due to lower predicted grades, particularly in the next 6 months, GCY will incur a material cash flow shortfall in the short term.
Although GCY has investigated options to address that cash flow shortfall, through obtaining financial accommodation from creditors and shareholders, it has become apparent that those options will not successfully address the cash flow shortfall in the time available.
As a consequence, the Directors have determined to appoint voluntary administrators to GCY Group.
While in Administration the Company’s shares will be suspended from trading.
Updates on the process will be uploaded on the ASX platform.
Gascoyne announced the resignations of the following Directors and Officers from Gascoyne and its subsidiary companies on Friday 31st May 2019:
- Non Executive Chair Sally-Anne Layman and Non-Executive Director Mark Le Messurier have resigned as Directors of the Company.
- Additionally Mike Ball (Chief Financial Officer) and Richard Hay (Chief Executive Officer) have resigned as statutory Officers of the Company.
The Company will provide further advice on Board composition in due course. ■