GBM Issues 244.8 Million Shares at $0.006, Eyes 1.9 Billion More Pending Approval

Capital Raising Milestone

GBM Resources Limited (ASX – GBZ) has successfully completed the first tranche of its recent capital raising, issuing 244,791,132 fully paid ordinary shares at a price of $0.006 each. This tranche was executed under the company’s existing placement capacities, with approximately 129 million shares issued under Listing Rule 7.1 and 116 million under Listing Rule 7.1A. The move injects fresh capital into the mining explorer, underpinning its ongoing operational and strategic initiatives.

Pending Shareholder Approval for Tranche 2

The company’s second tranche, significantly larger in scale, proposes the issuance of up to 1.87 billion shares to unrelated parties and an additional 49 million shares to directors or their related parties, all at the same $0.006 price point. This tranche is contingent on shareholder approval, which will be sought at an upcoming general meeting. The scale of this tranche highlights GBM’s ambition to substantially bolster its capital base, though it also raises questions about potential dilution for existing shareholders.

Additional Securities on the Table

Alongside the share placements, GBM is seeking shareholder consent for several other securities issuances. These include 333 million shares to Wise Walkers Limited as part of a farm-in agreement, and a package involving nearly 180 million shares plus 100 million options to Collins St Asset Management Pty Ltd related to an early convertible note redemption. Furthermore, the company plans to issue 275 million unlisted incentive options to directors, employees, and key consultants as part of remuneration arrangements, aligning staff interests with shareholder value creation.

Regulatory Compliance and Market Implications

GBM has also issued a cleansing notice for the tranche 1 shares under the Corporations Act, ensuring compliance with disclosure obligations and facilitating secondary trading. The company’s transparent approach to regulatory requirements provides reassurance to investors amid this significant capital restructuring. However, the market will be closely watching the shareholder meeting outcomes and the impact of the substantial share issuances on GBM’s share price and capital structure.

Looking Ahead

With the first tranche complete and the second tranche pending approval, GBM Resources is positioning itself for a transformative phase. The capital raised will likely support exploration and development activities, but the dilution effect and shareholder response remain key factors to monitor as the company advances its growth strategy.