The West Perth-based Gascoyne Resources Limited (ASX: GCY) is a metals and mining sector company engaged in the exploration and development of gold and base metal projects in Australia. On April 1st, 2019, the company announced to have received strong interest from the eligible institutional and sophisticated investors for the placement of ~ 77.3 million fully paid ordinary shares to raise up to $ 3.8 million at $ 0.05 of issue price, which reflects a discount rate of 50% on the last closing price and five-day VWAP of $ 0.10.
In addition, it has also announced an opportunity for the eligible shareholders to acquire new shares under a fully underwritten non-renounceable entitlement offer of 4-for-5 shares at the record date of April 8th, 2019, to raise up to ~ $ 20.6 million at an issue price of $ 0.05.
Meanwhile, NRW Holdings Limited (ASX: NWH) informed the market that it would be sub-writing up to $ 5.3 million of the latest entitlements issue announced by Gascoyne Resources. NRW has shown sustained support towards Gascoyne Resources. Back in December 2018, the company extended a $ 12-million loan facility to Gascoyne, to be repaid through instalments within the H2 of calendar year 2019.
The Directors with a stake in Gascoyne have declared to take up around $ 250k of their entitlements for the entitlement offer. Besides, another investor, with existing shares of the company, has also agreed to $ 2 million of the placement and to sub-underwrite up to $ 8 million of the entitlement.
The offer will close on May 1st, 2019, the new shares will be settled by May 8th, 2019 and the proceeds will be utilised to support the operational priorities and progress the wholly-owned Dalgaranga Gold Project, spanning over 1,000 km² of tenements in the Murchison region, towards commercial production. Currently, Gascoyne also holds 1005 interest in the Glenburgh gold project spanning over 2,000 km² of tenements in the Southern Gascoyne region, and the Egerton gold project spanning 450 km² in the Southern Gascoyne region of Western Australia.
Following the above announcements, the suspension of trading on Gascoyne’s securities was lifted with the commencement of market session on Monday, April 1st, 2019 when the GCY stock price closed the trading at AUD 0.052, diving by 45%.
Currently, Gascoyne has a market valuation of around AUD 27.32 million with ~ 515.39 million outstanding shares. On April 5th, 2019, the GCY stock ended the trading at the last selling price of AUD 0.050, down 5.66% with ~ 1,075,830 shares changing hands.
As per the operational and corporate update released at the end of March 2019, the drill program is ongoing at Gilbeys in advance of annual Resource and Reserve update and the gold production of approximately 43,000 ounces has been achieved since the commissioning of the Dalgaranga Gold Project in mid-2018. The production and cost guidance for the first half of CY2019 has been revised to 29,000 – 34,000 ounces while for the second half it remains unchanged.
For the six months to December 31st, 2018, the net consolidated loss of the Group for the period after provision of income tax amounted to $ 47.22 million, up on $ 1.98 million in the prior corresponding period (PCP) ended December 31st, 2017. The net cash and cash equivalents were at $ 15.73 million as of the end of the period.
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