GBM Resources (ASX:GBZ) experienced a significant surge in its share price, climbing 130% to $0.014 in early trading. This followed the announcement of a comprehensive recapitalisation strategy, headlined by a $13 million placement. The placement will see shares issued at $0.006 each, representing an 11% discount to the 15-day volume weighted average price up to 19 June 2025. GBM Resources is a Queensland-based mineral explorer and developer, primarily focused on gold and copper deposits.
The funding secured will be strategically allocated to several key areas. A substantial portion, $6.17 million, will be used to fully repay convertible notes held by Collins St Asset Management (CSAM). Additionally, funds will facilitate the termination of a proposed farm-in agreement with Wise Walkers concerning the Twin Hills Gold Project. As part of the CSAM repayment, CSAM will also be entitled to an early redemption fee, comprising the issue of 179.9 million shares at $0.006 and 100 million options, exercisable at $0.009 and expiring on 30 June 2028.
Furthermore, GBM Resources has executed a participation and release deed with Wise Walkers, formally ending the farm-in deal for the Twin Hills Gold Project in Queensland. Wise Walkers, who previously contributed $2 million to the project, will convert this into equity, resulting in the issuance of 333.3 million shares and making them GBM’s largest shareholder with a 19.99% stake. Subject to shareholder approval, existing directors and incoming non-executive Chairman Ian Middlemas have subscribed for a total of $1.944 million under the placement.
Executive Director Andrew Krelle stated that with a now debt-free balance sheet, GBM is well-positioned to accelerate its exploration program. The company intends to focus on expanding the gold resource base at both the Twin Hills and Yandan projects by exploring for epithermal gold mineralisation across its Drummond Basin projects. The recapitalisation also includes a board restructure with Sunny Loh stepping down as Chairman and Peter Rohner stepping down as Managing Director but remaining as CEO until July 2025.
