Eastern Goldfields’ woes continue as it’s forced to sell Intermin stake to pay the bills
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Eastern Goldfields has sold its stake in diversified gold, base and battery metals explorer Intermin Resources as it struggles to keep the lights on.
The sale of its 1 million shares netted the company $170,039.
The move follows a string of other cost cutting measures such as mothballing all its gold mining operations. Eastern Goldfields’ (ASX:EGS) main operation is Davyhurst, located 120km north-west of Kalgoorlie.
This saw 20 operational and 16 corporate and administrative employees lose their jobs and key contractors stood down.
Just prior to news of the halt of operations, Eastern Goldfields revealed executive chairman Michael Fotios and director Alan Still had resigned.
Eastern Goldfields said earlier in September that it has taken “reasonable steps” to mitigate spending, while it tries to secure funding.
The company is in advanced talks with potential investors and advisors regarding the completion of a capital raising.
Eastern Goldfields had just $10,000 cash in the bank and $35 million worth of loan facilities, of which around $18.1 million was still outstanding, at the end of June.
The gold miner has been in trouble for some time, last year facing difficulties in paying its contractors.
One contractor even tried to have to junior producer wound up and a liquidator appointed.
But Mr Fotios reassured investors at last year’s annual Diggers & Dealers bash in Kalgoorlie, WA that Eastern Goldfields had settled the issue of outstanding payments to its contractors and could afford to pay its bills going forward.
The recent falling gold price won’t have helped as investors sought to exit gold stocks.
Around 70 per cent of ASX-listed gold stocks lost ground recently.
Since Eastern Goldfields resumed trading in April this year, its share price has slumped 38 per cent to a new low of 11.5c.
Stockhead is seeking comment.