Gascoyne Resources shares hold steady after early slide
The West Australian
Tuesday, 30 October 2018 9:28AMStuart McKinnon
Long-serving managing director Mike Dunbar quit the company just days after newly appointed chairman Ian Murray announced his exit.Picture: Simon Santi
Shares in Gascoyne Resources have regained lost ground after shedding as much as 8 per cent this morning.
The fall came after the company lost more than half its value in yesterday’s sharemarket wipe-out following the news that newly appointed chairman and long-serving managing director had departed suddenly.
The company emerged from a trading halt yesterday morning to announce former Gold Road Resources boss Ian Murray, who joined the board only this month as non-executive chairman, had resigned last Wednesday while Mike Dunbar had followed him out the door the next day.
Gascoyne said chief financial officer Mike Ball had accepted the role of interim chief executive and non-executive director Sally Anne-Layman would take on the role of chair.
The company’s shares closed today flat at 12¢.
The board and management reshuffle represents the culmination of a troubled ramp-up of the company’s flagship Dalgaranga project near Mt Magnet since it poured first gold in May.
The development and optimisation of the project has been slower than expected, with the company revealing yesterday that it had produced just 12,951 ounces in the September quarter, nearly half of the 25,000oz average run rate expected for a 100,000ozpa project.
In August, the newly minted gold miner announced a surprise $24 million capital raising to bolster its balance sheet as the extended ramp-up continued.
Gascoyne said yesterday it was targeting commercial production late in the December quarter at the project, which hosts a resource of 1.3Moz.
Mr Dunbar had been with Gascoyne since February 2010 and was its managing director since March 2011, leading it from explorer to producer.
Mr Murray joined Gascoyne’s board this month with former Evolution Mining chief operating officer Mark Le Messurier, who will continue as a non-executive director along with Mike Joyce and Ian Kerr as executive director of operations and development.
Perth broker Argonaut yesterday placed its buy recommendation and 59¢ price target for Gascoyne “under review” pending a discussion with the company’s new management and a project update.
“Confidence in the operations has been marred by inconsistencies, and whilst new management suggest that the worst is over, we need to take a closer look at the operations and geological model going forward before we can take a firm view,” Argonaut said in a client note.
Argonaut noted the initial ramp-up of Dalgaranga had suffered delays which necessitated raising funds for working capital and contingency purposes.
“Whilst this was a miss from the company, it does not justify the reason for two executives to depart so suddenly and in the chairman’s case, with such a short tenure,” it said.
GCY Price at posting:
13.5¢ Sentiment: None Disclosure: Held
