Investors Are Bailing Out Of Gold Miner Gascoyne Resources

After the appointment of new chairman, there was an update that the managing director who served the organization for a very long period has departed suddenly the last week. Ian Murray, who joined the company this month as a non-executive chairman has resigned last Wednesday Mike Dunbar followed him the next day on Thursday. Mr. Dunbar was associated with the company since March 2011.He has worked tirelessly in the growing company in order to develop its team and asset. Also, he guided Gascoyne (ASX:GCY) Dalgaranga gold project in terms of discovery, feasibility and development. However, the company continues its production ramp up. However, as per the September quarter report there is a slower rate of production than expected. In this quarter the company had produced just 12,951 ounces.

Mr. Murray has joined this month with Mark Le Messurier who is the former Evolution Mining chief operating officer will continue as a non-executive director along with Mike Joyce and Ian Kerr who will be working as executive director of operations and development. As a result of this the share price of Gascoyne share fell down by 54.7% which is the 3 years low.Â

For the year ended 2018, the company made a net loss of A$558,853. The net consolidated loss of the Group for the FY18, after provision for income tax was $558,853. The total asset of the company is A$237,747,622 and the total liabilities of the company is A$121,225,020. This indicates that the company has potential to clear its long-term obligations. The total current asset of the company is A$29,978,053 and total current liabilities is A$44,956,909. This represents the poor health of the company. The company is not in a position to meet its working capital as well as short term obligations. There was a cash outflow of $3,608,609 from the operating activities where major cash outflow was from the payments made to the supplier and employees and finance charges. The net cash used in the investing activities was A$92,874,481 where major cash outflow was due to payments made in exploration and evaluation expenditure and payment made for mine properties under development. There was a net cash inflow of A$79,697,858 where major source of income was from the proceeds from the issue of shares, proceeds from borrowing. There is net decrease in the cash and cash equivalent at the end of the year by A$16,785,232. The cash and cash equivalent at the end of the year is A$25,144,709.

Technically the scrip is trading in negative zone from the month of September. In the month of September, the scrip touched the lows of $0.12 after making “doji” candle on the technical charts. The scrip is currently trading at the lower bands of the Bollinger with bearish candle formed on the lower end. The Bollinger band is getting diverged at the lower end indicating further fall can occur in near term. Looking at major indicators like RSI at the levels of 20, indicating oversold zone, MACD in negative zone indicates scrip might fall further till major support levels and then show recovery.

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