Commissioning of the existing processing plant at the Lubuk Mandi Gold Mine in Peninsular Malaysia and production of gold concentrate could occur as early as March 2014.
The company has acquired a 40% stake in Angka Alamjaya Sdn Bhd (AASB), which holds the project, for 15% of its ordinary shares.
GBM and AASB have agreed on a total budget of up to S$8 million (A$6.8 million) to be used for completion of resource estimation programs, metallurgical testing, plant design, capital equipment purchase and plant construction to commence retreatment of tailings.
This includes provisional costs for an initial public offering listing on the Singapore Stock Exchange with the first Tranche of S$3million secured.
GBM has commenced exploration drilling on the Lubuk Mandi Tailings Dam. The Parties intend to complete an Initial Public offer of AASB shares on the Singapore Stock Exchange by mid next year.
"This acquisition is significant as it provides both funding and growth outcomes for GBM," managing director Peter Thompson said.
"The project has a total JORC exploration target estimated to contain between 174,000 and 443,000 ounces of gold with multiple gold discoveries that offer exceptional exploration potential in an established gold mining region."
Lubuk Mandi Gold Mine
The Lubuk Mandi Gold Mine was previously owned and operated by government body Terengganu State Economic Development in the 1990's and produced 108,000 ounces of gold from two shallow pits.
Its associated CIP processing plant is rated at 300,000 tonnes per annum and involves single stage crushing to a stockpile and mill.
Both were placed on care and maintenance in 2000 with the plant requiring minimal refurbishment.
Lubuk Mandi is located along one of four recognised gold belts in Peninsula Malaysia that together have at least 28 significant gold deposits.
The project covers 221 hectares and is close to existing infrastructure and the regional centre of Terennganu State.
It includes a tailings dam with an exploration target of between 1 million tonnes at 0.7g/t containing 23,000 ounces of gold and 1.4Mt at 0.9g/t for 38,000 ounces of gold.
This offers GBM potential for early gold production at lower risk and could also allow further development to be self funded.
Two other sources of mineralisation have also been identified that may provide ore for future mining and treatment.
- Main Zone - exploration target between 370,000 tonnes averaging 2.9 g/t containing 35,000 ounces of gold and 1.1Mt averaging 3.6g/t containing 127,000 ounces of gold; and
- East Zone - exploration target between 1.44Mt averaging 2.5g/t containing 116,000 ounces of gold and 2.4Mt averaging 3.6g/t containing 278,000 ounces of gold.
GBM's development plan is focused on recommencing mining operations and recognising additional resources to support development funding options.
The development budget is estimated at S$6 million with tailings evaluation to cost S$0.5 million, hard rock evaluation another S$2.2 million and S$3.3 million set aside for construction and commissioning.
With the acquisition of the Lubuk Mandi Gold Mine now completed, GBM can now focus on progressing the project towards early production by treating tailings.
This will in turn pave the way for hard rock mining once exploration confirms the remaining development options.
Plans to list on the Singapore Stock Exchange will allow GBM and AASB to tap Asian markets.
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