Fotios resigns from Eastern Goldfields

Eastern Goldfields' executive chairman and largest shareholder Michael Fotios has resigned from the embattled gold miner, while US investor Hawke’s Point Holdings looks set to increase its stake in the company after agreeing to buy some of its debt and support a planned recapitalisation.

Hawke's Point will buy a $9.6 million debt owed by the gold producer to Investec.

Eastern Goldfields said today Mr Fotios had resigned as executive chairman and director, effective immediately.

Director Alan Still has also resigned.

“The board would like to thank Mr Fotios and Mr Still for their service to the company since their respective appointments,” Eastern said in a statement to the ASX.

“We wish both Mr Fotios and Mr Still every success in their future endeavours.

“The company considers that the board changes set out above are in the best interests of the company and are an important milestone in the evolution of the company, with the board now to be comprised of a majority of independent non-executive directors.

“Further board changes are expected as the proposed recapitalisation fundraising progresses towards completion.”

According to Eastern’s 2017 annual report, Mr Fotios owns 39.77 per cent of the company.

The gold miner also said international asset manager Hawke’s Point, which invested $17.5 million in Eastern last year, had agreed to purchase a $5 million debt owed to finance company Investec.

Eastern said Hawke’s Point had bought the debt with a view to converting it into the proposed recapitalisation.

Under the agreement, the asset manager has agreed to extend the standstill period until September 5, allowing for additional time to complete the planned capital raising.

The company has been in a trading halt since July 23 as it searches for a funding deal.

Eastern said today it was in advanced discussions with potential investors regarding a capital raising.

Last week, the company suspended gold processing operations at Davyhurst.