Gascoyne posts production record despite administration

Ore being fed into the primary crusher at Dalgaranga. Image: Gascoyne

Gascoyne Resources has delivered a record month of production at the Dalgaranga gold operation in Western Australia.

The company recovered 6561 ounces of gold from 275,000 tonnes of ore (an average of 0.84 grams of gold per tonne) from the site in June. It marked the first time since operations began in May 2018 that the company achieved more than 6000 ounces in gold production in a single month. 

Gascoyne’s daily average tonnes for June were also impressive at 9169 tonnes, a significant improvement on April’s 7632 tonnes and May’s 7057 tonnes.

It is a sliver of good news during a challenging time for Gascoyne, which entered into administration in early June due to an expected material cash shortfall. 

Gascoyne is continuing operations at Dalgaranga on a “break even or better basis” through voluntary administrator FTI Consulting, which decided to keep Dalgaranga open because of a belief it provided a better outcome for creditors than immediately liquidating the miner.

“To ensure short term viability of the Dalgaranga operations under voluntary administration and to allow the business to continue trading, a short-term interim mine plan (IMP) was developed in June,” Gascoyne stated.

“The IMP focusses on minimising costs from June 2019 to September 2019 by reducing (total material movement) — predominantly waste — whilst maintaining access to sufficient ore in the near term.”

Contractor NRW Holdings, which has been engaged at the site since December 2017, has also indicated its continued support for Gascoyne.

The mining services company will provide drill and blast services while Gascoyne continues to explore its options.

Gascoyne’s share price has dropped from 46.8 cents to just 3.9 cents in the past year. The company posted a $47.2 million loss in its half-year report for the six months ended December 31, 2018, with liabilities around $30 million in excess of its assets.

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