Ann: Trading Suspension, page-15

The fact of the matter is that GCY has a large debt exposure which was put in place to finance the development. Both the company and the banks appear to have gotten the ore grades wrong which has directly affected the opex and cash flow to service the debt. I suspect that the bankers (rather than just the auditors) have now enforced their secured rights as presumably the financing covenants have been breached.

In these situations you need patient and experienced bankers who are prepared to work through the issues if there is a way to resolve it. Gascoyne are meant to have an experienced management team with financial backgrounds and one can only hope that they are now doing their job. Ms Layman in particular was hired to oversee the process and put in place this debt and she needs to deliver now in this critical phase in dealing with the financiers.

The lack of communication by Gascoyne to its shareholders has been extremely poor since their Board changes last year, it feels like people inside are pointing fingers rather than taking responsibilities which is what is needed when the chips are down. I don't believe (read hope) that GCY are a basket case but if they do go under, then it is due to some very poor management and Board due diligence going back to the project's feasibility stage.