Investors have wiped nearly half the value off of Navigator Resources stocks after it announced a discounted rights issue to raise up to $31.7 million.
Investors have wiped nearly half the value off of Navigator Resources stocks after it announced a discounted rights issue to raise up to $31.7 million.
Navigator announced today a change tack on its strategy for its underperforming Bronzewing gold project near Leinster, after production continued to fall short of internal forecasts.
Its new plan focuses on achieving a sustainable long term ore supply by accelerating a waste pre-strip operation at the Cockburn pit at Bronzewing, and defers mining for a series of small, remote satellite pits.
The first ore was mined from the Cockburn pit in June, and the waste pre-strip will gain access to an estimated 300,000 ounces of gold.
To fund the cutback of the Cockburn pit, Navigator announced today an underwritten renounceable rights issue at 6.8 cents per share to raise a minimum of $20 million and up to $31.7 million.
Subscribers will also receive one option for every two shares.
At close of trade today, Navigator shares had lost nearly half their value, or 6.3 cents, to trade at 6.2 cents.
Navigator managing director David Hatch said he and the board had made decisive changes to remedy the underperformance of Bronzewing.
"I acknowledge that performance of (Bronzewing) has to date disappointed shareholders (including myself and other members of the board), but assure you that the Chairman, other non-executive directors and the management group have and continue to make extraordinary commitments to ensure Navigator and its stakeholders derive the promised production and profitability outcomes," Mr Hatch said in a statement.
"Accessing sustainable ore supply from the Cockburn Pit represents a turning point for the company."
Navigator also announced today it had bolstered its management team in reaction to the consistent underperformance of mining operations compared to internal forecasts.
Timothy Blyth was named Navigator's general manager at Bronzewing, and former Troy Resources Sandstone project resident manager Greg Brennan was appointed mining manager at Bronzewing.
The company said it was also pursuing short-term initiatives to utilise surplus milling capacity, and said it was in negotiations with a third party seeking to treat up to 250,000 tonnes of ore over the coming months.
Mr Hatch said Navigator knew the first two years of the Bronzewing operation would be challenging.
"Our experience during the first year has included some adverse production influences beyond our control as well as examples of where we could have done things better.
"I am very confident that the changes we've made will see the company on a very sound footing following the equity raising and that we have a lot to look forward to.
"I sincerely thank shareholders for their ongoing support and invite you to join me in participating in the pending attractively priced rights issue."
