Key decision makers called it quits just days before a precious metal producer suffered financial ruin on June 2.
Chief executive Richard Hay and chief financial officer Mike Ball are among the high-profile departures after Gascoyne Resources entered voluntary administration on June 2.
The pair joined fellow non executive chair Sally-Anne Layman and non-executive director Mark Le Messurier in resigning from the company on May 31.
“The company will provide further advice on Board composition in due course,” Gascoyne’s board said in a statement to the Australian stock market.
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Lower than expected production blamed
FTI Consulting senior managing directors Michael Ryan, Kathryn Warwick and Ian Francis have been appointed as voluntary administrators of Gascoyne.
The management consulting company blamed lower than expected reconciliation to ore reserves and mineral resource models at Gascoyne’s $324 million Dalgaranga Gold Project, 418km east of Geraldton in Western Australia.
“Gascoyne’s focus has been on ramping up mining operations at its 100 per cent owned Dalgaranga Gold Project to increase ore releases and lift grades available for processing,” FTI said in a statement to the stock market. “Despite extensive efforts by Gascoyne to optimise operations by targeting improved mined grade, resource reconciliation, and increased material movements, Gascoyne has continued to experience issues … impacting the level of ounces Gascoyne has been able to produce.”
New model offers hope
The Gascoyne board is considering a new Localised Uniform Conditioning (LUC) resource model for the Gilbeys deposit, which defines a higher tonnage lower grade deposit than previous resource models.
FTI claims the model could help turn around the mining company.
“On the basis of the new LUC model, and urgently prepared pit mining schedules based on the new model, high level cash flow analysis indicates that due to lower predicted grades, particularly in the next six months, Gascoyne will incur a material cash flow shortfall in the short term,” FTI said.
At this stage Gascoyne will continue to operate “business as usual” and FTI will work with more than 200 mine staff, contractor NRW Civil and Mining, suppliers, lenders and customers to bring stability.
A meeting will be held with creditors on 13 June 2019.
Any enquiries should be directed to FTI senior director Shane Murphy by emailing firstname.lastname@example.org