Subiaco-based GBM Resources has entered into a joint venture arrangement with a Singapore company over large-scale phosphate projects in north Queensland.
Subiaco-based GBM Resources has entered into a joint venture arrangement with a Singapore company over large-scale phosphate projects in north Queensland.
The announcement is below:
Singapore based Resource Kings Pte Ltd has entered into a Binding Term Sheet to acquire a joint venture interest in potentially large-scale phosphate projects held by GBM Resources Limited (ASX code: "GBZ") in the Mount Isa region of north Queensland.
Resource Kings Pte Ltd is a commodities based trading company that includes a focus on steel and fertiliser products.
Under the proposed agreement GBM Resources will issue 8.5 million new ordinary shares in the company to Resource Kings Pte Ltd at an issue price of A$0.31 per ordinary share being a
premium to current market price to raise $2,635,000 and GBM will agree to commit $635,000 of the funds invested toward a phosphate exploration program to be managed by GBM.
Upon completion of the initial exploration program, the joint venture agreement will enable Resource Kings Pte Ltd to have earned a 90% interest in the phosphate projects and to have full responsibility for all future development and mine related costs and GBM to retain a free carried interest of 10% of any income generated from the successful production and sale of phosphate. GBM's interest is subject to a 2% royalty.
The remaining $2.0 million will be used by GBM to further enhance its exploration efforts at the Brightlands Cu Au project and the Malmsbury Au project.
This transaction will;
- increase GBM's cash resources to approximately $6 million,
- accelerate the progress of these projects, and
- provide additional funds for our copper and gold projects.
The term sheet proposes that the placement will be in two tranches covering an initial payment of
A$1.335m to be paid on 16 December 2009 and the balance of A$1.300m on the 27 January 2010.
The phosphate projects are located at Bungalien (EPM14355), Horse Creek (EPM 15150), Malbon 2 (EPM14120) and EPM applications 17849 , 18207 and18208.
We have stated previously that we were looking for a partner to develop our Phosphate assets and are delighted to have entered into this transaction with Resource Kings Pte Ltd which opens up an opportunity to value-add to these assets without diluting our core focus and assignment of cash reserves for our flagship copper and gold pursuits in Queensland and Victoria.
