GBM buys Drummond’s Mt Coolan unit for cash and shares
PERTH (miningweekly.com) – ASX-listed junior explorer GBM Resources has signed a share sale agreement with fellow-listed Drummond Gold to acquire that company’s wholly-owned subsidiary, Mt Coolan Gold Mines.
The subsidiary holds assets in Queensland with an estimated resource of 283 000 oz of gold over three deposits.
GBM said on Tuesday that the acquisition provided the company with an opportunity to rapidly upgrade the confidence levels of the three deposits, most notably the Eugenia resource which contained some 65% of the estimated resource, and to add further resource from known project areas.
The upgraded resource base would provide the foundation to investigate near-term production options, including from heap leaching oxidised ores at Eugenia.
The company added that it would evaluate a range of funding options to progress the assets.
Under the terms of the transaction with Drummond Gold, GBM would make a cash payment of A$850 000 and issue 50-million fully paid shares.
The shares would remain in voluntary escrow for a period of 12 months from settlement.
Following the transaction, Drummond would hold a 9.3% shareholding in GBM, with the company telling its shareholders that it would continue with its strategy to identify new opportunities to explore copper and zinc in Australia. Following the transaction, Drummond would also be in a better position to enter into joint venture agreements or to acquire prospective assets.
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