Gold explorer GBM Resources has raised A$39.85-million through an institutional placement to accelerate exploration and development across its Drummond Basin gold portfolio in Queensland.

The company secured strong backing from both new and existing institutional and sophisticated investors, including its largest shareholder Wise Walkers Limited (WWL), which subscribed for A$8.05-million of the placement, subject to shareholder approval.

The placement will see the issue of about 752-million new shares at A$0.053 a share, representing a 3.6% discount to GBM’s last closing price and a 4.7% discount to its 10-day volume-weighted average price.

Canaccord Genuity (Australia) acted as lead manager and bookrunner to the placement, with Argonaut Securities as co-lead manager.

Proceeds, combined with existing cash reserves, will be used to advance exploration and development activities at GBM’s 100%-owned Drummond Basin assets, which host mineral resources of around 1.84-million ounces, as well as to support business development initiatives and general working capital.

The capital raising will be completed in two tranches – the first comprising 600-million shares to be issued under existing placement capacity, and a second tranche of 151.9-million shares to WWL, which will require shareholder approval.

GBM CEO Daniel Hastings said the strong investor interest underlined growing confidence in the company’s Queensland gold portfolio.

“We are delighted with the extremely positive and overwhelming response received by the company for the placement and wish to thank all shareholders, including Wise Walkers, for their continued show of support in the company,” he said.

“The strengthening of the balance sheet provides a robust platform to not only grow the existing resource base at the key Twin Hills and Yandan deposits (combined mineral resources of about 1.5-million ounces) but importantly to undertake systematic exploration and test new regional targets, allowing the company to fully unlock and maximise the potential across the company’s entire Drummond Basin portfolio.”