Gascoyne Resources rescue in NRW’s hands

Australia’s tougher foreign investment rules could be a central issue in the rescue of failed gold miner Gascoyne Resources.

Hanking would need to win enough support to adjourn a meeting of creditors on Thursday

Australia’s tougher foreign investment rules could become a central issue in the rescue of failed gold miner Gascoyne Resources on Thursday, as creditors meet to decide the fate of a Hong Kong-listed company’s offer to rescue the firm.

Gascoyne’s future ultimately will rest in the hands of its biggest creditor after its administrators recommended against a last-minute bid from a Hong Kong suitor offering to help refloat the company.

ASX-listed NRW Holdings, owed almost $33m for its work at Gascoyne’s Dalgaranga mine in Western Australia, is likely to be the kingmaker at a meeting of the company’s creditors on Thursday, after Hanking this week waged a vigorous campaign to win creditor backing for its proposal to take a share of up to 30 per cent in the company.

Administrators FTI Consulting last week backed a refloat and recapitalisation of the company, pitching a $70m-$80m capital raising to return Gascoyne to the bourse. Hanking ­offered to chip in an additional $20m and bring forward cash payments to smaller creditors owed $6m, and a larger upfront payment to NRW.

Hanking would need to win enough support to adjourn a meeting of creditors on Thursday that is set to vote on the FTI recapitalisation proposal, to make time to flesh out its alternative offer.

But FTI on Wednesday recommended creditors vote in favour of its original plan, warning delays associated with the Hanking offer, which relies on winning Foreign Investment Review Board approval, could delay the capital raising needed to return the high-cost miner back to the market.

“Our recommendation remains given the uncertainty and probable delays associated with the Hanking proposal,” FTI’s Michael Ryan said in a circular to creditors on Wednesday.

Hanking is believed to have the support of many of the company’s smaller creditors for its alternative proposal but, with the company needing to win the support of both a majority of creditors voting and of moneys owed, its fate will rest on the vote of NRW, Gascoyne’s biggest trade creditor by a large margin.

NRW is yet to indicate if it will support the proposal.