Another fledgling gold producer bites the dust...Gleneagle Gold...

Another fledgling gold producer bites the dust...

Gleneagle Gold calls in administrators
3-May-07 by Mark Beyer


West Perth-based gold miner Gleneagle Gold Ltd has been placed in administration after the company failed to deal with commissioning problems at its Fortnum gold project, which commenced production in July last year.

Its slide into administration followed nearly $15 million in capital raisings in the past year, most recently a $6.56 million placment to local investors and clients of Sydney broking firm Ark Equities Pty Ltd.

Gleneagle's shares have been suspended since 27 April, when the company said it was negotiatng a corporate transaction, which included a capital raising.

The company said in March that its gold production had been adversely affected by a range of factors, including lower than forecast head grades and operational issues at its treatment plant.

It said it had addressed the issues at the treatment plant but was forced to modify its mining schedule because the Tom's ore body had under performed.

Gleneagle's March quarter cash flow report said it had negative operating cash flow for the quarter of $1.56 million and a cash balance at the end of the quarter of $538,000.

The Board has appointed Andrew Birch, Simon Read and Simon Theobald of PPB as joint and several voluntary administrators.

The administrators said the company has been working towards a resolution of key resource, grade control processes and mining methods at Fortnum.

An independent review has been commissioned.