GBM signs Share Acquisition Framework Agreement with Chinese conglomerate

THE BOURSE WHISPERER: GBM Resources (ASX: GBZ) announced the signing of a Share Acquisition Framework Agreement with Chinese state-owned enterprise Jiangxi Centre Mining Co Ltd (JCM).

JCM is a business unit of the Jiangxi Provincial Bureau of Coal Geology, a large Chinese industrial conglomerate actively engaged in mineral exploration, mineral development, engineering construction and property development in and around the Jiangxi Province and globally.

Its mineral exploration projects include the commodities of coal, coal bed methane, gas, vanadium, copper, gold, rare earths, salt and iron ore.

GBM said the deal formalises an investment by JCM in GBM for strategic investment and partnership.

Under the Framework Agreement JCM will subscribe for new shares, taking up to a 19.9 per cent shareholding.

GBM explained the Framework Agreement encompasses a funding strategy allowing the full exploration and development of the company’s projects while forming part of a broader strategic alliance to acquire additional near-term development resources projects in other key commodities.

“This proposed transaction will provide a funding boost for the Company in a very uncertain economic environment,” GBM chairman Peter Thompson said in the company’s announcement to the Australian Securities Exchange.

“A strong cash position will create the foundations to develop our portfolio of projects.

“Having a strong technical group like JCM with downstream expertise from discovery to production on board enables us to explore in other key commodities, and I am pleased to have the opportunity to partner with JCM in meeting its development objectives within the resource sector.”