GBM Resources’ (ASX:GBZ) share price surged 130% to $0.014 as of 11:30am AEST today, following the release of its broader recapitalisation strategy that included a $13 million placement.
Under the two-tranche placement, shares will be issued at $0.006 per share, representing an 11% discount to the 15-day volume weighted average price up to 19 June 2025.
The funds will be used to fully repay the Collins St Asset Management (CSAM) convertible notes, terminate a proposed farm-in agreement over the Twin Hills Gold Project with Wise Walkers, as well as a board restructure.
GBM — which has a market capitalisation of $7 million — will repay $6.17 million in cash to CSAM. CSAM is also entitled to an early redemption fee, which comprises the issue of 179.9 million shares at $0.006 and 100 million options, exercisable at $0.009 and expires on 30 June 2028.
Once the placement is completed, GBM will be well capitalised with zero debt to conduct an accelerated exploration program at the Yandan and Twin Hills projects.
Meanwhile, the company has also executed a participation and release deed with Wise Walkers to formally terminate the farm-in deal over the Twin Hills Gold Project in Queensland.
In October 2024, GBM entered into the deal to earn a 70% joint venture interest. As this news service previously reported, Wise Walkers intended to help the company advance Twin Hills to a decision to mine through sole funding $6 million of exploration expenditure over an 18-month period.
Wise Walkers has made a $2 million contribution to date, and has agreed to convert this into equity at an issue price of $0.006 per share, resulting in the issue of 333.3 million shares.
As a result, Wise Walkers will become GBM’s largest shareholder with a 19.99% stake in the company.
Subject to shareholder approval, existing directors of GBM will subscribe for a combined $294,000 under the placement.
Incoming non-executive Chairman Ian Middlemas has subscribed for $1.2 million, while non-executive Directors Peter Fox and Robert Behets have subscribed for a combined $450,000.
As part of the recapitalisation, Sunny Loh will step down from his role as Chairman into a non-executive role, while Peter Rohner will step down as Managing Director, but remains as CEO until his contract expires on 31 July 2025. Rohner will then transition as a consultant to the company for support.
Executive Director Andrew Krelle says with a debt-free balance sheet, GBM has an opportunity to deliver value through an expedited exploration program.
“GBM’s exploration plan for the next 12 months is designed to expand the significant gold resource base at Twin Hills and Yandan by systematically exploring for epithermal gold mineralisation across GBM’s Drummond Basin projects,” Krelle says.
GBM Resources is a Queensland-based mineral explorer and developer primarily focused on gold and copper deposits.
Write to Aaliyah Rogan at Mining.com.au
Images: GBM Resources
