A Hong Kong-based investment group will put $2.75 million into mining firm GBM Gold – a company which bought the Bendigo Goldfield in 2016, but has made slow progress since.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The funds will be used to resume open pit gold mining at Dunolly, advance the company’s plans to recover residual gold from the Kangaroo Flat Sand Dam, and pay off debts to previous Kangaroo Flat mine owner, Unity Mining.
The ASX-listed company made the announcement to the stock market on Thursday, with the investor buying 275,000,000 ordinary shares at $0.01.
The company detailed a loss of $1.02 million in the 2017-18 financial year in its annual report, which followed a deficit of $1.3 million the previous year.
Read more:
The annual report also revealed GBM Gold is yet to receive the full $6.2 million for the sale of its processing plant at the Kangaroo Flat mine.
The ASX queried the financial position of GBM Gold Ltd in May after the company’s quarterly report detailed deficits.
A letter addressed to the company by a ASX compliance officer asked GBM Gold to explain its plans to arrest “negative operating cash flows”.
The ASX requires companies that are subject to quarterly reporting to explain to the market how they expect to continue their operations and meet their business objectives if they appear to have ongoing negative cash flows.
A spokesperson for GBM Gold at the time said the ASX request was “nothing out of the ordinary”.
Environmental groups were concerned the company’s financial position could prove disastrous for rehabilitation of the toxic Woodvale Evaporation ponds.
The ponds have been used by successive mining companies to store pumped mine water for almost 30 years and contain low levels of arsenic and lead, among others.
The state’s mining regulator, Earth Resources Regulation, approved a rehabilitation plan for the Woodvale Evaporation ponds in August 2017.
An ERR spokesperson said a bond is in place to cover any liability for the ponds should the licence holder not be able to complete this work.
The state government has a bond in the form of an unconditional bank guarantee of $1.8 million for MIN5364 - Woodvale. This amount is based on the assessed rehabilitation liability.
In August, GBM signalled its intention to reopen the Swan Decline at the Kangaroo Flat mine to look for mineral deposits.
Have you signed up to the Bendigo Advertiser's daily newsletter and breaking news emails? You can register below and make sure you are up to date with everything that's happening in central Victoria.
