Gascoyne escapes bankruptcy with $125m recapitalisation deal
Link copied to
Gold’s recent falter has not fazed the market, with Gascoyne Resources (ASX:GCY) having no trouble locking in a $125m funding package to revive its struggling Dalgaranga operations.
The company today revealed it would be undertaking a fully underwritten institutional placement and 2-for-1 accelerated pro rata non-renounceable entitlement offer to raise about $85m at 2.5c per share.
Gascoyne has also inked a debt facility agreement for $40m from Investec Bank.
But record gold prices have convinced investors it is still a good story to back.
And gold bulls are standing by their aspirations for the safe haven metal amid the stormy economic outlook.
Joe Foster, portfolio manager of the VanEck International Investors Gold Fund, is still confident gold will hit $3400, telling Kitco that yesterday’s gold price correction is just a case of price consolidation and “nothing goes straight up forever”.
Gascoyne says that with a deleveraged balance sheet and revised life of mine plan, it is well positioned to drive sustainable operational performance.
The company says it has achieved a significant operational turnaround at the flagship mine, reaching a seven consecutive month of producing more than 6,000 ounces of gold.
Yandal has hit grades of up to 22.29g/t from 40m at its Gordon Dam project in WA, while Ardea uncovered grades of up to 10g/t from 44m in first reverse circulation drilling at its Aphrodite North project, also in WA.
Yandal says mineralisation is open in all directions.
“Drilling continues to provide strong encouragement that there is a significant gold deposit to be discovered at the Gordons Dam prospect,” managing director Lorry Hughes said.
“High-grades from shallow depths and widespread anomalous gold in primary rocks over a 700m strike length is what we have so far.”
Los Cerros is hunting for gold at its Tesorito prospect, part of the Quinchia gold project in Colombia, while Nexus is drilling at its Wallbrook gold project in WA’s eastern goldfields.