GBM’s exploration of its highly prospective Drummond Basin assets will shift into overdrive after the company raised $10m at a substantial premium.

The funds will be raised through the issue of two $5m convertible notes to Collins Street Convertible Note Fund, which is managed by Melbourne-based Collins Street Asset Management.

Each note has an interest rate of 10.5% payable monthly in advance and can be converted into shares at a price of 8.75c per share – well above the current price of 5.3c.

Adding to this, GBM Resources (ASX:GBZ) has also received firm commitments for a share placement of about 6.1 million shares priced at 5c per share to raise a further $305,000.

Proceeds will be used to accelerate exploration of the assets, whose prospectivity can be seen in the latest assays from drilling at the 309 Deposit within its Twin Hills project that returned intercepts of 81m grading 2.5 grams per tonne (g/t) gold from a down-hole depth of 119m and 84.7m at 1.79g/t gold from 214m.

“This funding package, along with receivables and liquid securities provides GBM sufficient funds to continue to advance its flagship Drummond Basin gold project,” managing director Peter Rohner said.

“Key deliverables over the next 12 months include, continued value realisation of non-core assets and accelerated exploration in the Drummond Basin by GBM to continue to substantial grow our JORC resource position.”

Top gear, Drummond Basin edition

Funds from the funding package will be used to accelerate exploration drilling and resource expansion at Twin Hills following a review of the recent drilling results and upgrade of geological models.

The company will also advance resource estimates for its Yandan, Illamahta and Twin Hills projects as well as carry out initial feasibility work to assess resource extraction options – open pit or underground – to focus future drilling programs at Twin Hills.

Other work to be carried out includes advancing regional exploration target prioritisation and assessing potential joint venture options across various parts of the Drummond Basin tenement package to maximise value creation.

GBM’s Drummond Basin assets currently host a combined resource of about 1.6Moz of gold while its short-term goal is to ramp up resources at Twin Hills to more than 1Moz, taking it closer to its target of 3Moz in total contained gold.

This article was developed in collaboration with GBM Resources, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.