Queensland-based mineral exploration and development company GBM Resources (ASX:GBZ) has signed a sale and purchase agreement (SPA) with TSX-listed company Novo Resources (TSX:NVO) for the Malmsbury Gold Project in Victoria.
As part of the agreement, GBM received $1 million in cash and over 4.037 million common Novo shares representing $1.45 million at a 30-day volume weighted average price of CAD$0.3257 from Novo. The company also received over 2.018 million share purchase options, with each option entitling the holder to acquire 1 share at an exercise price of CAD$0.60 upon exercise until 24 April 2025.
Additionally, GBM reports it will retain the initial royalty arrangement, receiving a 2.5% net smelter royalty (NSR) after a decision to mine.
Commenting on the sale, GBM Resources Chief Executive Officer (CEO) and Managing Director Peter Rohner says: “GBM’s focus is on the prospective Drummond Basin where large high-grade epithermal gold deposits exist and where it expanded JORC resources to about 1.84 million ounces of gold.
“The completion of the sale of GBM’s remaining interest in the Malmsbury Project to Novo realises value for GBM’s shareholders…”
The completion of the sale of GBM’s remaining interest in the Malmsbury Project to Novo realises value for GBM’s shareholders and continues the strategy of using sale proceeds from non-core assets to repay the convertible note facility, if not converted. Taking part consideration in Novo securities provides GBM with continued exposure to the project and to gold equities.”
GBM also reports Malmsbury is encumbered by certain pre-existing royalties, and notes Novo will be required to pay a 2.5% NSR in aggregate, with only any residual amount between pre-existing royalty rights and the 2.5% threshold being retained by GBM where such encumbrance is present.
GBM Resources is a Queensland-based mineral exploration and development company focused on its portfolio of gold and copper deposits in Eastern Australia.
Its flagship project in the Drummond Basin of Queensland hosts about 1.84 million ounces of gold across the Mt Coolon, Yandan and Twin Hills projects. Some tenements in this region are the subject of a $25 million farm-in agreement with Newcrest Mining (ASX:NCM).
Separately, the company also holds a 55% interest in tenements in the Mt Morgan district and the Mt Isa Inlier in Queensland in a joint venture (JV) with JX Nippon Mining and Metals subsidiary Nippon Mining Australia. GBM also holds the White Dam Gold-Copper Project in South Australia.
Images: GBM Resources Limited
