A mining company's $100 million plans for a solar plant at the Woodvale ponds could go ahead regardless of whether its current bid to stay solvent is successful, its CEO says.
GBM Gold needs to raise $6.67 million to fund any future Bendigo ventures, and pay back bond money they still owe previous owners Unity Mining.
GBM is yet to pay back $3.5 million Unity loaned them for a bond covering environmental rehabilitation at sites including Woodvale, where potentially arsenic-laden water was once stored.
GBM now aims to float new shares on June 12, to generate funds towards the $6.67 million.
Documents given to the ASX by GBM Gold earlier this month state that "without raising funds to pay Unity Mining's debt the company will be insolvent".
The offer will be underwritten by Hong Kong based Nex Kiwi Holdings Limited.
GBM Gold's CEO says there could still be hurdles if the float goes ahead.
"There's various regulations, and all sorts of things, that have to be met. Until the money's in the bank you are never game to absolutely tick it off," John Harrison said.
"No matter what happens, this (solar) project will proceed. If we didn't raise the money an administrator would come in.
"We have a major creditor in Unity Mining and they would make sure they got their money back. The project would be developed by someone else, not GBM."
GBM still owes Unity Mining about $4 million for a bond to cover environmental rehabilitation costs, should the company go under.
The state government requires mining companies to set money aside as insurance for sites.
The Environmental Protection Agency report last year found the company's Woodvale land could be reused for agriculture over time, despite the presence of toxic materials like arsenic.
GBM still needs to get its solar plan through the City of Greater Bendigo's planning process and find a partner to help fund it.
GBM Gold plans to turn its evaporation ponds in Woodvale into a solar farm that would provide renewable energy to Bendigo homes.
The ponds, which had not been used as evaporation ponds since April 2016, would be repurposed as a 60-megawatt solar project.
GBM Gold believes the project would produce enough emissions-free, renewable energy to meet the electricity needs of thousands of Bendigo homes.
It could also create an estimated 100 jobs during construction.
The Woodvale Evaporation Pond Complex is located about 10 kilometres north of Bendigo and covers about 174 hectares of freehold land owned by GBM Gold.
The ponds were constructed to evaporate water from underground mining operations in Bendigo.
It was planned to return the site to agriculture.
GBM Gold plans to work with the community to develop the solar project proposal, as the project progresses through an approval process with the City of Greater Bendigo and into a construction phase.
The company believes a solar plant suits the ponds because they have excellent sun exposure, are not readily visible to nearby residences and are close to where the power is needed.
The solar project would use ponds 1A, 1B, 2, 3, 6 and 7 and existing infrastructure at Woodvale.
Pond 1A will be retained as a pond and operate as floating solar enabling containment of all rainfall on the site.
Ponds 1B, 2, 3 and 7 will have their spillways removed so that they do not retain water. A standard solar system would be installed on these ponds.
GBM Gold subsidiary, Kralcopic, has prepared a rehabilitation plan in accordance with the Mineral Resource Development Act (Victoria).
The approved rehabilitation work plan envisages a deep fill zone in Pond 6. The plan encompasses the elements required to re-instigate the ponds for a solar complex:
A level area similar to Ponds 1-3 would be created in Pond 6 to make it more suitable for the installation of solar panels.
It would require less work to prepare the site for the solar project than it would to return it to agriculture.
The solar plant would connect to a 66 kV sub-transmission network in Bendigo via a 66kV power line and would tie into a new sub-station situated on rehabilitated Ponds 4 and 5.
Grid connection would be to the 66 kV sub-transmission loop in Bendigo at the Eaglehawk Zone Substation. The sub-station at Woodvale will be located on the rehabilitated Ponds 4 and 5 area.
More to come
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