LONDON (Alliance News) - Golden Saint Resources Ltd shares fell on Wednesday after Chief Executive Cyril D'Silva resigned for personal reasons, leaving the diamond and gold exploration company at a time when its financial position remains precarious but taking up a consultancy role for Golden Saint focused on fund raising.
Golden Saint shares were down 20% to 0.0240 pence per share on Wednesday morning, setting a new 52-week low.
D'Silva has left his role with immediate effect, with Executive Chairman David McDonald taking over his corporate responsibilities.
Golden Saint also promoted Alimamy Wurie to become a new executive director of the company on Wednesday from his role of mining and business development consultant, and will immediately assume D'Silva's operational responsibilities at the company's assets in Sierra Leone.
Wurie holds around 1.0 million shares in the company, representing a 0.05% stake.
Importantly, D'Silva leaves at a time when the company is scrambling to secure additional funding in order to survive, and although he has formally left his role as CEO, he will take up a paid consultancy role.
D'Silva has entered into a consultancy agreement with the company, whereby he will commit "at least" 15 hours a week to assist the company with retaining shareholder interest, communicating with investors, providing feedback to the board on investor sentiment and assisting the company with raising funds.
D'Silva will not be paid a retainer but will be paid commission on funds raised by him on a case by case basis, with either party able to terminate the agreement with four weeks notice.
D'Silva, alongside McDonald, have both previously agreed to defer their salaries to try to lessen the financial burden of the company, and Golden Saint plans to settle those outstanding salaries by issuing shares to the two individuals to save cash, but said it may need to seek shareholder approval if it needs to issue more shares than it is authorised to issue.
Assisting the company to raise funds is likely to be D'Silva's initial priority in his consultancy role as the company warned its financial position remains dire.
Golden Saint said the majority of the sales of diamonds and gold that were expected to be completed in the first part of 2016 are now anticipated to be made in the second half of 2016, putting its cash position under further strain.
"The delay is due primarily to constraints on the company's cash resources. The company will provide the market with updates regarding anticipated sales in due course and as required under the AIM rules for companies," said the company.
"The company continues to need to arrange additional funding for its immediate working capital requirements over and above any potential licence commitments and renewal fees. If no such funding can be raised in a timely manner or on acceptable terms, the company may be unable to continue trading by virtue of its then financial position," said Golden Saint.
"However, the board currently remains confident that it will be able to secure additional working capital in the short term, as required, and a further announcement will be made in due course as appropriate," it added.
Despite the short-term uncertainty, Golden Saint continues to implement its strategy which is currently focused on renewing three exploration licenses in Sierra Leone - Baja, Tongo and Moa - but said it cannot do this until funding is secured.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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