Gascoyne Resources Shuts Down Dalgaranga Gold Mine Operations
THE BOURSE WHISPERER: Gascoyne Resources (ASX: GCY) has taken the decision to close operations at the company’s 100 per cent-owned Dalgaranga gold project in Western Australia for the time being.
Gascoyne Resources said the project had been hit hard in recent times by a culmination of abnormally high rainfall, labour shortages and COVID-19 impacts.
Things haven’t improved through October and into November, leading to reduced production levels, higher production costs and negative cash-flow from operations, which the Gascoyne Board has determined is not sustainable.
And even though it considers its portfolio of gold assets in Yalgoo, Gilbey’s North and Never Never to hold lots of blue sky potential, the transition to mining this higher-grade ore is not affordable and cannot be optimised at the current time given Gascoyne’s liquidity position.
Gascoyne indicated the following steps would be implemented immediately:
• Open pit mining and ore processing operations at Dalgaranga will be suspended;
• The 2.5 million tonnes per annum Dalgaranga mill will be transitioned to operating on a care and maintenance basis over the next 2-3 weeks and maintained in a state ready for a rapid resumption of production; and
• Most of the workforce currently at Dalgaranga will be demobilised.
“It is very disappointing to have to make this decision, particularly in light of all the hard work the exceptional team at Dalgaranga has put in over the past couple of years,” Gascoyne Resources managing director and CEO Simon Lawson said in the company’s ASX announcement.
“The continued pressure of industry-wide cost inflation, approval delays and sub-par operational performance have contributed to the Board and I uniting in the view that continuing to operate in these challenging times is extremely high risk.
“We are committed to developing a sustainable +5-year solid mine plan targeting higher margin production and we strongly believe that this focus is in the best interests of the Company and our shareholders.”
TO READ THE FULL ANNOUNCEMENT: CLICK HERE
Web: www.gascoyneresources.com.au