Gascoyne Resources Enters Trading Halt to Consider its Options

THE BOURSE WHISPERER: Gascoyne Resources (ASX: GCY) responded to Westgold Resources’ (ASX: WGX) taunt’s by requesting the ASX place the company’s ordinary shares in a trading halt with immediate effect.

Gascoyne Resources requested the trading halt saying it requires time to complete, “the finalisation and Board approval of a material update to its business plan”.

The company indicated that once the trading halt is lifted it expects to be able to provide additional information in respect of the Westgold Resources’ announcements regarding its unsolicited intention to make a takeover bid for the company.

“The Company requests that trading of its ordinary shares be halted until after the expected announcement of the update to its business plan is made or until the market opens on Wednesday 13 October 2021, whichever is the earlier,” Gascoyne said in its request to the ASX.








Westgold Resources Goes Bareknuckle in Gascoyne Resources Takeover Stoush

THE BOURSE WHISPERER: Westgold Resources (ASX: WGX) called out the Board of takeover target Gascoyne Resources (ASX: GCY) in an announcement this morning comparing its offer against that of Firefly Resources (ASX: FFR).

Westgold declared it had received a good deal of incoming positive engagement from shareholders of Gascoyne Resources regarding its intention to make an off-market takeover offer for all the issued shares in Gascoyne.

Westgold’s offer is subject to the Firefly Scheme not proceeding and customary off-market takeover bid conditions including, inter alia, a minimum acceptance condition of 50.1 per cent.

Westgold intends to lodge its Bidders Statement with ASIC during the week commencing 10 October 2021.

“It has been more than a week since Westgold announced its intention to make a bid on terms that are far superior to Gascoyne’s proposed merger with Firefly,” Westgold Resources executive director Wayne Bramwell said in the company’s ASX announcement.

“Bemusingly, the Gascoyne Board has provided no guidance to Gascoyne’s shareholders nor to Westgold regarding the Board’s intentions on either the Firefly Scheme or the Westgold Offer.

“The silence from the Gascoyne Board in relation to our Offer is in stark contrast with the volume of calls and emails we are receiving from Gascoyne shareholders wanting our Offer to be considered by their Board.

“Westgold knows the Gascoyne Board is cognisant of its fiduciary duty to its shareholders and would expect the Board to dutifully and proactively act to ensure their loyal shareholders have the opportunity to evaluate and respond to our value accretive proposition.”

The company compared the details of each offer, saying that “Based on the Independent Expert’s Report contained in the Firefly Scheme booklet”, should the Firefly Scheme taken up the value would equate to 18.3 cents per Gascoyne share.

The Westgold Offer of one Westgold share for every four Gascoyne Shares implies a value of 44 cents per Gascoyne share.

The gloves were then removed:

“The Gascoyne Board must act in accordance with its fiduciary duties to its shareholders and take all steps necessary to terminate the inferior proposed Firefly Scheme,” the company stated rather firmly.

“At the very least, Westgold considers that the Gascoyne Board must postpone the proposed Firefly Scheme meeting to allow its shareholders the opportunity to consider the merits of the Westgold Offer, as compared to the dilutive Firefly Scheme.

“The Firefly Scheme structure denies Gascoyne shareholders any vote or choice on this value destructive transaction.

“Westgold considers that once given the choice, a Gascoyne shareholder’s acceptance of the Westgold Offer is in effect also a vote against the Firefly Scheme.

“Westgold encourages Gascoyne shareholders to demand that its Board act in its shareholder’s best interests and provide an opportunity for Gascoyne shareholders to consider and accept the Westgold Offer.

“Westgold is committed to ensuring that Gascoyne shareholders are provided an opportunity to consider and accept the compelling Westgold Offer and has appointed an advisory team of Argonaut PCF and HopgoodGanim Lawyers to assist with the preparation of our Offer.”


At the time of publication neither Gascoyne Resources or Firefly Resources had released responding statements.








Company Merger Results in Project Spinout

THE BOURSE WHISPERER: With the ink barely dry on their recent merger agreement, Gascoyne Resources (ASX: GCY) and Firefly Resources (ASX: FFR) are set to spin out project from their combined portfolio into a new entity.

The two companies announced a binding Demerger Implementation Deed (DID), under which they have agreed the terms of a demerger of various assets.

These include the Paterson copper-gold project, the Forrestania gold project, and lithium mineral rights over various tenements held by both Gascoyne and Firefly, all of which are to be acquired by a newly incorporated wholly owned subsidiary of Firefly, Firetail Resources Limited.

Firetail will initially be a publicly unlisted company with an intention to seek an ASX listing sometime following implementation of the merger.



Gascoyne Resources and Firefly Resources to Merge into New, Bigger and Better Murchison Gold Entity

COMMODITY CAPERS: At the 2020 Diggers & Dealers Forum there was much excitement centred around the big gold merger between Saracen Mineral Holdings and Northern Star Resources with the new entity to become the owner of Kalgoorlie’s Super Pit operations.

At the time, Northern Star boss Bill Beament suggested there could/should be more gold company mergers, a reasonable call considering the current climate for gold and the price being generated thereby.

In the lead up to annual Kalgoorlie gabfest, Gascoyne Resources (ASX: GCY) and Firefly Resources (ASX: FFR) appear to have taken Beament’s advice on board by announcing this week the two companies would be merging.

In the announcement informing the ASX of their intentions, the two companies declared the merger will, “combine two gold companies with complementary assets in the Murchison region of Western Australia, unlocking a number of synergies by leveraging Gascoyne’s gold mining expertise and available processing infrastructure at Dalgaranga, for the benefit of Firefly’s highly prospective suite of assets including its flagship Yalgoo gold project, which is located only 110km by road from Dalgaranga.”

In an associated conference call, Gascoyne Resources managing director and CEO Richard Hay explained that regional consolidation of tenure around Dalgaranga had been a clear part of the company’s strategy since it gained re-instatement to the ASX back in October last year.

“This transaction – or this merger – is a major step forward for Gascoyne in accelerating our strategy to increase mine life, increase production profile, and build and grow our Resource inventory, and very, very importantly, is the exploration upside of the combined companies between Gascoyne and Firefly,” Hay said.

“Firefly’s Yalgoo gold project is highly complementary with Dalgaranga.”

In the During the same call, Firefly Resources managing director and CEO Simon Lawson – who will ultimately join the Gascoyne Board as a non-executive director, declared his Board had recommended unanimously in favour of the merger proposition.

“The Board believes there is many reasons to support this merger,” Lawson continued.

“Obviously, there is significant exposure at Yalgoo, and we are leveraging investment of over $100 million in infrastructure at Dalgaranga.

“Gascoyne is the logical owner of the Yalgoo gold project, and we will be working very strongly with the team at Gascoyne to complete the merger over the coming months.”

Reasons given for the merger by the two entities includes:

• Strategic consolidation of the higher-grade Yalgoo (Melville) Mineral Resource is within haulage distance of Dalgaranga;

• Firefly’s Melville gold deposit at Yalgoo contains a shallow, from surface, Mineral Resource of 196,388 ounces at 1.45 grams per tonne gold (0.7g/t Au cut-off) and located 110km by road from the Dalgaranga production hub;

• Approximately 80 per cent of the Melville Mineral Resource estimate currently sits in the Indicated category (156,753 ounces at 1.47g/t gold with a 0.7g/t Au cut-off);

• Opportunities to optimise the Dalgaranga mine schedule given the presence of higher-grade ore at Yalgoo which will serve as valuable blending material at Dalgaranga in the future; and

• Potential for mine life extensions at Dalgaranga through the integration of Yalgoo ore, with enhanced potential to unlock the full value of the existing Mineral Resources at Dalgaranga and Yalgoo of 845,000 ounces.

“The integration of high-grade Yalgoo ore in our production plan moving forward has excellent potential to extend mine life, reinforcing Gascoyne’s position as a key gold producer in the Murchison region,” Hay said in the combined ASX announcement.

“Furthermore, the merger with Firefly will consolidate approx. 1,200 square kilometres of the Yalgoo and Dalgaranga greenstone belts under single ownership, significantly enhancing the exploration upside potential with over 100 high quality targets.

“Any discoveries can quickly be brought into production at Gascoyne’s high quality, low cost Dalgaranga processing plant.”

In a steak knife, but wait there’s more moment, it was announced that, in conjunction with the Merger, Gascoyne and Firefly have agreed the terms of a demerger of the lithium rights over the Yalgoo project area as well as the Paterson copper-gold project and Forrestania gold-lithium project which is intended to be acquired by a newly incorporated wholly owned subsidiary of Firefly to be named Firetail Resources Limited, along with the lithium rights over certain tenements at the Dalgaranga project.

“Firefly shareholders will hold approximately 32 per cent of the merged entity, with the transaction providing an opportunity for immediate value realisation at an attractive premium,” Lawson said in the combined ASX announcement.

“Through their holdings in the enlarged Gascoyne, Firefly shareholders will stand to benefit from the re-rating that we would expect to flow from the creation of a larger gold company with an increased mine life and enhanced production profile.

“In addition, they are intended to benefit from the proposed demerger of our copper-gold and lithium exploration assets through Firetail Resources and receive an in-specie distribution in this exciting new energy metals focused company.”





Gascoyne Resources Bounces Back for Admirable Quarter

THE DRILL SERGEANT: Gascoyne Resources made a triumphant return to the boards of the ASX after coming out of administration exile in October 2020.

During the initial post-administration period, the focus of the company was on solidifying its business plan and reinvigorating the organic growth pipeline for the company’s 100 per cent-owned Dalgaranga gold project through exploration activities.

Gascoyne Resources has commenced a program to install more mature environmental, social and governance (ESG) policies, processes and reporting.

The company’s March Quarterly Report highlighted how well it has bounced back, including highlights of:

Free cash flow generation of $9.4 million for the quarter;
19,203 ounces produced for the quarter; 59,899 ounces FY2021 year to date;
19,073 ounces sold at an average realised price of $2,495 per ounce;
AISC $1,114 per ounce for the quarter; $1,224 per ounce financial year to date; and
On track for upper end of FY2021 production guidance of 70,000 to 80,000 ounces at an AISC of $1,200 to $1,300 per ounce.

“We…remain on track to meet the upper end of production guidance for FY2021 of 70-80koz at an AISC of $1,200 – $1,300/oz,” Gascoyne Resources managing director and CEO Richard Hay said.

“Paying down $19 million of debt further strengthened the balance sheet with net cash of $9.5 million and a cash balance of $27 million.

“Our FY2021 exploration budget was doubled during the quarter and early drilling success at Tanqueray was a highlight, with an intersection of 9m at 7 grams per tonne in one RC hole.

“Assay results have been slow to come in due to the industry wide very high laboratory demand, and we look forward to reporting more results in the June quarter.”







Gascoyne Resources Scores Further Hits Close to Dalgaranga Plant

THE DRILL SERGEANT: Gascoyne Resources (ASX: GCY) produced further high-grade drill results from the company’s Dalgaranga gold project in Western Australia.

The latest results show drilling encountered mineralisation located outside of Dalgaranga’s current Mineral Resources, Ore Reserves and Life of Mine plan.

Intersections immediately below the current mine plan returned from the southern end of the Gilbey’s Main Zone included:

13 metres at 2.1 grams per tonne gold from 228m; and
44m at 1g/t gold from 221m, including 10m at 1.9g/t gold.

High-grade intersections were encountered from the priority satellite mining targets of Sly Fox and Plymouth, including:

Sly Fox

26m at 2.3g/t gold from 277m, including 16m at 3g/t gold.


3m at 6.2g/t gold from 31m, including 1m at 16.2g/t gold.

Gascoyne has follow-up RC drilling planned to commence in January, with the very southern end of the Gilbey’s Main Zone to be drilled first.

Aircore drilling has recommenced at Dalgaranga after the Christmas break testing regional targets at Tanqueray, Lindville and Gilbey’s corridor area (within 10km of processing plant).

“Continued success from resource definition drilling within 1.5 kilometres of the Dalgaranga processing plant is increasing our confidence that we can organically extend the current seven year mine life of the operation,” Gascoyne Resources managing director and CEO Richard Hay said in the company’s ASX announcement.

“Updated Mineral Resource Estimates for Gilbey’s, Sly Fox and Plymouth will be completed in the coming months which will underpin an updated Dalgaranga Life of Mine Plan to be released in the June quarter 2021.

“The possibility of adding a satellite feed component to the current open pit mining at Gilbey’s has potential to deliver both mine life extensions and incremental production growth.

“We will continue to allocate additional funds to drilling across these targets based on ongoing success.”









Gascoyne Resources Close to First Gold at Dalgaranga

THE DRILL SERGEANT: Gascoyne Resources (ASX: GCY) advised that ore commissioning of the 2.5 million tonnes per annum processing plant at the company’s Dalgaranga gold project in Western Australia, is underway.

Gascoyne Resources indicated that GR Engineering has commenced the ore commissioning of the Dalgaranga processing plant, declaring it to be effectively complete with components being commissioned with ore and progressively tested up to their design capacities.

“First gold production expected in around 10 days,” Gascoyne Resources said in its ASX announcement.

“Construction of the project has progressed ahead of the original schedule, and remains under budget.”





Gascoyne Resources on Schedule for May Gold at Dalgaranga

THE BOURSE WHISPERER: Gascoyne Resources (ASX: GCY) informed the market of progress on construction activities at the company’s Dalgaranga gold project in Western Australia.

Gascoyne Resources said that GR Engineering (GRES) has progressed design, engineering and construction of the 2.5 million tonnes per annum Dalgaranga processing plant.

“Design and engineering is complete and construction is well advanced with completion expected in around three months – approximately one month ahead of schedule,” Gascoyne Resources said in its ASX announcement.

“Construction of the project has progressed ahead of the original schedule, and will now see commissioning and first gold production in May 2018.”

Activities to have been undertaken within the process plant so far, include:

Concrete and civil works have been completed;

SAG mill installation is well advanced;

The Crusher and ROM bin have been delivered to site and installation is underway;

CIL tank erection is complete;

Steel erection on Site is nearing completion;

The Elution and gold recovery circuit installation has progressed on schedule with electrical cabling and terminations underway;

Reagent storage area has been completed with the final electrical and piping connections underway; and

Water services area is nearing completion, including reverse osmosis treatment plant, fire system, raw and process water pumps.

Gascoyne advised that electrical and instrument installation is almost complete with commissioning of this portion of the plant scheduled for late February.

“The Mining Contractor (NRW) has commenced site establishment and mobilisation of the mining equipment,” the company said.

“To date one of the excavators, a number of trucks and ancillary mobile equipment has been mobilised.

“NRW are on schedule to commence mining in early March.

“As part of the mining contract, NRW have purchased a number of new truck trays that will increase the payloads of the trucks and improve efficiency.

“A number of these new trays have been fabricated and are scheduled to arrive on site in the next few weeks.”

The Dalgarange gold project contains a Measured, Indicated and Inferred Resource of 31.1 million tonnes at 1.3 grams per tonne for 1.32 million ounces of contained gold, which is inclusive of Proved and Probable Ore Reserves of 15.3 million tonnes at 1.3g/t for 612,000 ounces of gold.





Gascoyne Resources Commences Aggressive Exploration Drilling Program

THE DRILL SERGEANT: Gascoyne Resources (ASX: GCY) has kicked off a big exploration campaign across the company’s 2.3 million ounce gold projects in Western Australia.

Gascoyne Resources will carry out some 40,000 metres of aircore drilling at the Dalgaranga gold project to test extensions to the Sly Fox deposit.

Drilling will also be undertaken at the Seagrams prospect, and to test the Greencock prospect and extensions.

Other new targets will also be subjected to testing.

Around 10,000m of RC drilling will follow up and extend exploration results at Greencock, and other anomalous Aircore results.

At the Glenburgh gold project, approximately 10,000m of Aircore drilling will test regional targets alongside 20,000m of RC drilling to improve and extend the existing resource and test new mineralisation.

Auger and Soil Geochemistry will also test extensions of known mineralisation trends.

The Mt Egerton gold project will undergo 5,000m of aircore drilling to provide preliminary testing of a southwest extension to the Hibernian and Gaffney’s shear zones greenfields exploration targets.

“The multi rig exploration drill program has been designed to test a number of the highest priority targets at the 1.3 million ounce Dalgaranga gold project, confirmation drilling at a number of the inferred resources at the 100 per cent-owned 1 million ounce Glenburgh gold project, along with initial drill tests of a number of regional exploration targets and to follow up previous shallow and high grade gold intersections at the Egerton gold project,” Gascoyne Resources said in its ASX announcement.

“The program, funded from the recently completed capital raising, will take approximately six months to complete.”