GBM Gold has taken out a $3 million loan from its largest shareholder to kick start its Bendigo Goldfield mining operations at Kangaroo Flat, after a $2.75 million investment was cancelled last week for failing to settle on time.
The company entered a trading halt earlier this month and will remain in suspension until the complete funds are received before November 15.
The $3 million unsecured loan from Hong Kong investment firm Silver Bright International Development included $1 million upfront, with six per cent interest.
It will be used to pay a third deferred bond payment to Unity Mining for mining assets in Kangaroo Flat, as well as working capital purposes.
More on GBM Gold’s plans to explore Bendigo Goldfield:
In a statement to the ASX, GBM Gold stated it was considering options to pay the loan.
“GBM Gold is exploring a range of capital raising activities for the repayment of the loan,” the statement reads.
Unity Mining agreed to sell its Kangaroo Flat gold plant, equipment and mining and exploration tenements to GBM Gold in September, 2015.
The arrangement included a $5.9 million deferred bond payment over three years to meet rehabilitation obligations in Bendigo.
On October 4, GBM Gold announced a Hong Kong-based investment group would put $2.75 million towards the operation but that deal was cancelled last week, prompting the $3 million loan.
GBM Gold is investigating the 16x4 kilometre Bendigo Goldfield, which contains 17 major anticlines, 12 of which account “for the bulk of the 16 million ounces of hard rock gold production”.
Works approved, equipment approaching commissioning
Regulators have approved the Kangaroo Flat coarse sand dam work plan and the Harvest Home open pit mine expansion, while the Swan Decline has been reopened.
All of the projects are now preparing to begin, with equipment being commissioned.
In its quarterly report to shareholders, released on Friday, GBM Gold stated it planned to begin oeprating gravity processing equipment at the coarse sand dam in Kangaroo Flat before the end of the year.
GBM Gold would also plan for exploration of the Nell Gwynne exploration target in the Bendigo Goldfield and implement recommendations of an audit into the Woodvale evaporation ponds.
GBM Gold’s acquisition of Unity Mining’s operations in Bendigo in 2015 prompted concerns about rehabilitating the Woodvale ponds, which contain toxic chemicals including arsenic. A condition of the sale was that GBM Gold rehabilitate two evaporation ponds within two years.