Award-Winning Turnaround: Gascoyne Resources Limited

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Situation

Experts at FTI Consulting were appointed to run Gascoyne Resources Limited and its subsidiaries (“GCY Group”) after it failed to deliver planned production. The FTI Consulting team stabilised operations and oversaw the capital investment required to underpin a turnaround strategy resulting in a major recapitalisation and reinstatement on the ASX.

Our Role

Upon appointing FTI Consulting Senior Managing Directors Michael Ryan, Ian Francis and Kate Warwick as Voluntary Administrators, we:

implemented a significant operational turnaround strategy, including; stabilizing and managing operations, adopting a new geological Resource Model, and updating and optimizing the Life-of-Mine Plan (“LOMP”), whilst also investing in an accelerated waste cutback of GCY Group’s main ore-body, Gilbey’s Main Zone (“GMZ”), to expose more continuous and predictable tonnages of higher-grade ore;
worked closely with all key stakeholders (employees, suppliers, secured lenders) to ensure continued trading and safety of existing operations, and prepared the business to undertake a dual-track sale and/or recapitalisation process;
overcame reconciliation issues and early grade underperformance in shallower mining areas during administration; and
With increased ore feed sourced from the GMZ, the mine achieved average monthly tonnes milled of 239,000t, at average grade of 0.81g/t, delivering consistent monthly production of +6,000oz post-appointment.
undertook a dual-track process resulted in a successful $125m recapitalisation, reducing debt to $40m, increasing working capital, and a strong balance sheet to support growth.

Our Impact

The business was saved and resumed trading on ASX following 16 months operating in administration. Mining and processing continued uninterrupted, preserving underlying asset value for the benefit of all stakeholders. Gascoyne Resources Limited transitioned to a profitable WA gold miner with consistent operational performance, cash flow positive, with 40% of future production hedged at attractive prices. Funds re-invested during the administration, and a robust updated seven-year LOMP added significant value and positioned the business for its successful refinance and recapitalisation.