Gascoyne posts $47.2m loss, 'significant doubt' over future

Gascoyne Resources has written down the value of its flagship Dalgaranga gold project by $33.5 million, as the company's half-year results revealed its liabilities are greater than its assets.

Gascoyne posted a $47.2 million loss for the six months to the end of last year, and the company said the poor performance stemmed from several production issues at Dalgaranga.

These issues included poor blasting outcomes at the mine, and multiple equipment replacements and repairs at its mill.

The company posted liabilities of around $208.3 million, which exceeded its assets by approximately $30 million.

In a statement today, independent auditor Grant Thornton said this indicated that a “material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern”.

Gascoyne said it pushed back repayments to its mining contractor, NRW Holdings, on a $12 million loan, by six months to mid-2020.

First gold was poured at Dalgaranga, which is located near Mt Magnet, in late May, and during that period Gascoyne forecast that the mine would produce around 100,000 ounces per year for six years.

Today, Gascoyne reduced the production guidance at the mine for the first half of this calendar year from between 40,000 and 45,000oz, to between 29,000 and 34,000oz.

Gascoyne completed a $24 million equity raising in September to fund operations at Dalgaranaga.

In late October, Gascoyne’s share price plunged 55 per cent in one day, after the company disclosed managing director Michael Dunbar and chair Ian Murray both resigned within a week.

The company has not yet recruited a new permanent managing director, with Michael Ball currently serving as the interim head.

Trading in Gascoyne has been suspended since March 18, after it failed to lodge its half yearly results to the ASX on time.