Ann: Update Gascoyne Resources Limited, page-24

https://thewest.com.au/business/mining/hanking-in-play-for-gascoyne-refloat-ng-b881585813z


Hanking in play for Gascoyne refloat

Stuart McKinnon EXCLUSIVEThe West Australian
Tuesday, 23 June 2020 8:05AM



NRW Holdings - operational pics. Dalgaranga Credit: NRW Holdings 21/11/2018


Hanking Australia has put an alternative recapitalisation plan to the administrators of Gascoyne Resources in an arrangement which could see the Chinese-backed goldminer take a 30 per cent stake in the company.

FTI Consulting last week flagged a plan to refloat Gascoyne, which involve an $80 million equity raising, secured creditors being repaid in full, partly from the raising and partly through refinancing, and unsecured creditors also receiving up to 100¢ in the dollar.

Under Hanking’s revised proposal, it is understood the raising would be lifted to $100m and the pool of funds for unsecured creditors would be lifted from $1m to $6m, meaning all could be paid within two months, rather than those owed more than $10,000 having to wait up to five years.

The proposal would also lift the upfront debt repayment to secured creditor and mining contractor NRW Holdings from $4m to $10m.
Gascoyne’s secured banking creditors would also be paid in full.
WestBusiness understands Perth broker Argonaut would underwrite the raising, possibly in a partnership with Canaccord Genuity.


It is believed the deal would give Hanking, which was already a small shareholder in Gascoyne before its collapse, a stake of between 20-30 per cent.

Hanking is said to be keen for its proposal to be put to creditors at a meeting on Thursday, which had been set to vote on the FTI proposal.

The Chinese company is understood to be marketing its plan as “an accelerated and enhanced deed of company arrangement and recap proposal”. It is claiming the offer as a positive example of Chinese investment helping the Australian resources sector and Australian creditors.

The plan would require the backing of the Foreign Investment Review Board, which could prove difficult given recent strained diplomatic relations between the two countries and unfavourable judgments on other proposed Chinese investments in Australian miners.

However the company already owns a gold project in Coolgardie, 80 per cent of the Tom’s Gully goldmine in the Northern Territory and held the Southern Cross goldmine between 2013 and 2018.

Last year Hanking tried to play itself into a deal to take control of Focus Minerals’ Coolgardie project to consolidate it with its own so-named project but the parties could not reach agreement.

Hanking Australia’s parent is Hong Kong-listed China Hanking Holdings which has a market capitalisation of $580m.

Gascoyne collapsed in June last year, citing a material cashflow shortage because of production difficulties at its flagship Dalgaranga mine.

However, FTI last week trumpeted an operational turnaround at the mine which it said would allow the company to be refloated on the ASX.

The appointment of FTI came shortly after the company raised $24.5m from shareholders.

Dalgaranga entered production just 13 months earlier but consistently missed production targets because of what it referred to as “poor reconciliation of geological models”.