Gascoyne secures funding for recapitalisation
Subscribe to Business News.
Gascoyne Resources has secured a $125 million funding package to facilitate the recapitalisation plan put forward by its administrators, which will see the company relist on the ASX.
Administrators FTI Consulting said the package, which comprised an equity raising and debt facility, would ensure a robust life of mine plan for Gascoyne’s Dalgaranga goldmine in Western Australia’s Murchison region.
The funding will also enable Gascoyne to reduce its debt – including $32.7 million owed to contractor NRW Holdings – and effectuate the deed of company arrangement (DOCA) recommended by FTI and approved by creditors in June.
West Perth-based Gascoyne had entered voluntary administration mid-last year, appointing FTI senior directors Michael Ryan, Kathryn Warwick and Ian Francis to manage the company.
The DOCA includes a fully underwritten share placement and 2-for-1 rights issues to raise around $85 million – with shares priced at 2.5 cents each – and a $40 million, three-year debt facility signed with global bank Investec.
Gascoyne chief executive Richard Hay said the bank was renowned for its debt facilities in the global mining industry.
“Investec Bank put forward the most competitive debt solution and we are pleased to have a facility that is aligned to our recently announced updated life of mine plan,” he said.
Gascoyne late last month said Dalgaranga had a seven-year mine life including annual production of between 70,000 ounces and 80,000oz of gold within the first four years.
The project averages an all in sustaining cost (AISC) range of $1,400-1,500/oz.
“We look forward to building a solid future as a profitable Western Australian gold producing business,” Mr Hay said.
He said the funding would facilitate the proposed recapitalisation and enable the company to pursue further growth opportunities.
Gascoyne will issue 1.4 billion shares under the placement to raise $35 million, and around 2 billion shares under the rights issue to raise $50 million.