Gascoyne faces liquidation as court proceedings begin

The Dalgaranga process plant. Source: Gascoyne Resources

The Federal Court of Australia has launched proceedings on Gascoyne Resources’ plan to be relisted on the Australian Securities Exchange.

This follows Habrok Mining,  a Western Australia-based investment company, putting forward an unsuccessful deed of company arrangement (DOCA) proposal for Gascoyne,  before purchasing unsecured debt of an existing creditor, owing approximately $616,000.

A DOCA is a when a company and its creditors reach a binding arrangement that determines how the company’s affairs will be handled.

The Federal court proceedings seek an order to end the DOCA Gascoyne entered in June and orders the company to be put into liquidation.

The proceedings may also lead to Gascoyne being restrained from taking further steps to implement or complete its proposed capital raising under the DOCA.

Gascoyne is considering the Habrok claims and its requests for information, which relate to alleged deficiencies in Gascoyne’s administrative report which resulted in the proposed DOCA.

Habrok has stated that the DOCA is “oppressive” and “unfairly prejudicial to creditors” and shields Gascoyne from scrutiny and investigations.

Gascoyne however does not consider these allegations to be sustainable and believes that the proposal remains in the best interest of both the creditors and shareholders.

NRW Holdings, which is a shareholder of Gascoyne said while its participation in the recapitalisation proposal has been referenced, it is not a party in the proceedings.

Gascoyne has managed to achieve seven consecutive months of producing more than 6000 ounces of gold at the Dalgaranga gold project in Western Australia.

During July, Gascoyne produced 6893 ounces of gold and processed 233,854 dry tonnes with a 92.9 per cent recovery rate.

“After a seventh consecutive month producing in excess of 6000 ounces of gold, we are off to a solid start to the 2021 financial year guidance of 70,000 to 80,000 ounces,” Gascoyne chief executive officer Richard Hay said.

“We are looking forward to completing the upcoming capital raise to reduce net debt and provide sufficient working capital to commence drilling and exploration activities with the aim of growing the company.”

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