ABM shrinks board, raises cash

Gold hopeful ABM Resources has restructured its board and initiated a capital raising and debt facility agreement as it progresses its Tanami tenements in the Northern Territory.

ABM hopes to raise about $8.2 million from a three-for-five rights issue, priced at 4 cents per share, which has been fully underwritten by Key Pacific Advisory Partners, and fully sub-underwritten by Pacific Road Capital Management as trustee for Pacific Road Fund II Managed Investment Trust.

Along with the raising, ABM has also entered into a $3.8 million debt facility agreement with Pacific Road, to cash back performance bonds, which are currently being provided by ANZ Banking Group.

The raising was priced at a 31 per cent discount to ABM’s 20-day volume weighted average price.

Proceeds of the raising will be used to fund a two-year exploration program at ABM’s Tanami gold tenements in the Northern Territory.

Meanwhile, ABM also announced a board restructuring that will reduce its size down to three, in order to save costs.

Non-executive chairman Mike Etheridge, who has served in the role for six years, has retired while former interim chief executive Brett Lambert has been appointed to the board as managing director.

While the search for a new chairman continues, non-executive director Richard Procter will act as chairman, however once a replacement is found both Mr Procter and non-executive director Helen Garnett will resign.

A nominee of Pacific Road, Susie Corlett, has meanwhile joined the board as a non-executive director.

Commenting on the funding arrangements, Mr Lambert said it was a key step in positioning ABM as an active and successful exploration company.

“The chosen funding structure will provide the capital required by the company in a manner that enables existing shareholders to participate on a pro rata basis, while providing funding certainty to the company to pursue its restructuring and step up its exploration activities,” he said.

“The company has already begun an exhaustive drive to reduce overhead and administrative costs so that the clear majority of funds raised can be directed to exploration and evaluation opportunities.”

ABM shares were 22.2 per cent lower to 4.2 cents each ahead of the close of trade.