ASX gold stock goes bust despite soaring precious metal price
A man sitting at a computer is blown away by what he's seeing on the screen, hair and tie whooshing back as he screams argh in panic.
It has been a shocking start to the new financial year for shareholders of one ASX gold stock.
This morning, the gold miner dropped a bombshell announcement that revealed that receivers have been called in despite the sky-high gold price.
Which ASX gold stock is going bust?
This morning, it was revealed that Calidus Resources Ltd (ASX: CAI) is on the brink and has called in administrators.
In a very brief statement from the administrators, it says:
Notice is hereby given that Hayden White and Daniel Woodhouse of FTI Consulting (Administrators) were appointed as joint and several voluntary administrators. [â¦] It should be further noted that Richard Tucker and John Bumbak of KordaMentha were appointed as Receivers and Managers by the senior secured creditor Macquarie Bank to Calidus Resources, Keras (Pilbara) and Calidus Blue on 28 June 2024.
This will no doubt come as a big surprise to shareholders. Particularly given how the ASX gold stock only recently raised $22.5 million from investors and restructured its operations.
Commenting at the time, Calidus' managing director, Dave Reeves said:
This financial restructure will deliver a host of substantial benefits to Calidus, headlined by increased production and cashflow this year. This will in turn help us achieve our target of producing 120,000oz per annum within three years.
What's going on?
It remains unclear what has triggered the voluntary administration. However, it is worth noting that the company owes Macmahon Holdings Ltd (ASX: MAH) a sizeable amount.
In fact, Macmahon shares are sinking on the news. It responded to the receivership bombshell, commenting:
Macmahon understands that the appointment of the Receivers and Managers had been made in response to the decision by Calidus' Board of Directors to appoint Voluntary Administrators on 28 June 2024 as outlined in the ASX announcement by KordaMentha dated 1 July 2024.
Macmahon provides mining and drill and blast services to Calidus at their Warrawoona mine. Macmahon's preliminary assessment of net current exposure under the contract is circa $33.9 million. Macmahon also holds an equity interest in Calidus listed shares with a value of $5.7 million at the close of trading on 28 June 2024.
One positive for the ASX gold stock is that receivers want to keep its mine operating during the process. It said:
Macmahon has received confirmation from the Receivers and Managers that Macmahon's ongoing services are required. These ongoing services during the receivership will be governed by purchase orders and payment from the Receivers and Managers, thereby minimising any increase in net current exposure. Macmahon will continue to monitor developments and update the market as necessary.
Here's hoping the gold stock finds a way out of this mess.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.