PERTH (miningweekly.com) – The share price of ASX-listed Reed Resources tumbled by more than 60% on Monday on news of a A$70-million impairment and the resignation of CEO Luke Tonkin after the company’s subsidiary GMK Exploration was handed over to administrators earlier this month.

GMK was the operator of the Meekatharra gold project in Western Australia.

At the time of the administrator’s appointment, Reed said GMK was unable to continue to operate the gold project without further funding, which Reed had been unable to secure.

With Reed no longer involved in full-scale production, Tonkin has resigned from the company, effective end-September. Chris Reed would resume control of the company as CEO and MD on a scaled-back remuneration basis.

In addition, the Reed board would be reduced by one executive and three nonexecutive directors, including the chairperson’s position, which is currently filled by David Reed.

This would be coupled with a significant voluntary reduction in directors’ fees.

Operationally, Reed would now focus on the evaluation and development of its two remaining core assets and would seek to divest its noncore assets to strengthen the balance sheet.

The company would also scale down its organisational and cost profile, starting with a material restructure and the reduction of the board and management teams.

Reed also announced that an asset impairment of some A$70-million would be reported in the 2013 financial year, with the Meekatharra operation accounting for A$62.3-million of the write-down and the Comet Vale project for another A$3.3-million.

The Mount Finnerty iron and nickel project would account for A$3.3-million and the Barrambie project for A$400 000 in write-downs.

Reed noted that the asset impairment was attributable to several factors, including the declining gold price and exchange rate assumptions.

Reed’s shares fell to a low of A$0.018 on Monday, down from a close of A$0.049 a share on August 15. Trading in the company’s shares had been subject to a voluntary suspension between August 16 and August 26.