NRW bails out Gascoyne Resources’ troubled Dalgaranga project...

NRW bails out Gascoyne Resources’ troubled Dalgaranga project with $12m loan

Stuart McKinnonThe West Australian
Wednesday, 26 December 2018 10:45AM

Stuart McKinnon



The miner will use the cash to keep its head above water while it persists with an extended ramp-up of Dalgaranga.



Embattled fledgling gold producer Gascoyne Resources has hit up its mining contractor NRW Holdings for a $12 million loan as it continues to battle production problems at its flagship Dalgaranga project near Mt Magnet.

The miner will use the cash to keep its head above water while it persists with an extended ramp-up of Dalgaranga, which has struggled to meet production forecasts since first gold was poured in May. The cash will also help the company meet a $1.6 million repayment on its $72 million project loan due on December 31.

Gascoyne said it was working closely with its financiers to review the repayment schedule ahead of the next reimbursement due on March 31.



The miner’s September quarter report showed it had cash and bullion worth $22.6 million as well as $5 million from a share purchase plan received in October. But it expected to spend $42 million this quarter, excluding forecast gold revenues for the period.

The NRW loan and mining contract is secured against Gascoyne’s assets with the miner scheduled to repay the facility in the second half of calendar 2019.

Gascoyne said on Monday it was on track to meet guidance of 17,000-18,000oz in the December quarter, an improvement on the 12,951oz it produced in the September quarter.

The company issued full-year calendar 2019 guidance of 92,000-102,000oz at all-in sustaining costs of $1220-$1320/oz, down from previous estimates of 105,000-115,000oz at $1200-$1300/oz.

The figure excludes an estimated $250-$300/oz cost on a high, 14:1 strip ratio for the year.

Gascoyne said it planned to focus on near-mine, low-stripping, oxide ore sources at Dalgaranga once it had stabilised production, which it said could improve production and extend mine life.

Dalgaranga has been plagued by lower than expected mining rates, grade control issues, bad weather and forced shutdowns.

In October, Gascoyne’s new chairman, former Gold Road Resources boss Ian Murray, walked out on the company within days of his appointment, and then long-serving managing director Mike Dunbar departed.

The moves spooked investors and the company’s shares lost half their value.

Gascoyne shares closed down 0.5¢ at 13.5¢ on Monday.

https://thewest.com.au/business/min...lgaranga-project-with-12m-loan-ng-b881058928z