gbm resources limited
DESCRIPTION
World Class IOCG Discovery PotentialTRANSCRIPT
Page 1 – Copyright © 2011 RM Research – www.rmresearch.com.au - Please read the disclaimer for terms.
A recent site visit to GBM Resources Limited’s (“GBM” or “the Company”) 100% owned
Milo Prospect near Cloncurry in far north Queensland has provided some insight into their
potential to discover a world class IOCG (iron-oxide/copper/gold) resource.
The Mount Isa/Cloncurry district is undergoing a renaissance with feverish exploration
and mining activity by junior exploration companies such as Cudeco Limited (ASX: CDU)
to the large foreign global miners such as Xstrata. All prospective ground has been taken
up with the goal to discover another Mt Isa, Ernest Henry, Eloise, or Cannington mine.
The world class Mount Isa Mine has been extracting silver, lead, zinc and copper ore for
nearly 90 years and has been the training ground or source of expertise for many mining
professionals and executives including GBM’s Mr Peter Thompson. Given the Mt. Isa
district‟s mineral endowment, it is no coincidence that global miners like Xstrata and
Ivanhoe Mines continue to expand their interests in the region.
As all GBM’s projects were not visited, the main purpose of this report is to outline the
potential of their Milo prospect. A brief update on the current status of their other projects
will be included for completeness.
INVESTMENT CASE
IOCG Discovery at Milo: At the Milo prospect, a scoping study and maiden JORC
complaint resource statement is imminent. The initial exploration target of between 30-
80 million tonnes of poly-metallic mineralization grading 0.8%-1.2% Cu-equivalent is
under review given the recent discovery of value adding rare earth elements (REE) and
yttrium mineralisation in recent drilling. This conceptual target is still undergoing further
drill exploration in order to better define the extent of mineralization but it is the #1
potential company making project.
IOCG Discovery at Bungalien: IOCG style copper in magnetite mineralization was
discovered at the Pan Pacific & Mitsui JV Bungalien project‟s Bronzewing Bore prospect
in the first hole drilled. A further two drillholes have just been completed and assays are
pending.
Rare Earth Element (REE) Resource Discovered: The discovery in July 2011 of REE in
drill core at the Milo prospect adds significant value to the overall economics of any
potential mining operation. Some 3,696 drill samples have been analysed for a suite of
REE with the assay results just released in November confirming that REE mineralization is extensive, open-ended, and comprising around 86% light REE and 14% heavy REE.
Phosphate discovery: Recent drilling confirms the widespread distribution of potentially
economic phosphate mineralisation on the Bungalien Project. This project can
conceivably become a stand-alone project given the joint venture partner‟s commitment to
ongoing funding of the project.
Capital Structure
Sector Materials
Share Price (A$) 0.08
Fully Paid Ordinary Shares (m) 219
Opt (ex 20c, exp 30/06/13) (m) GBZOA 124
Market Cap (undil) (A$m) 17.5
Share Price Year H-L (A$) 0.165-0.051
Approx Cash (A$m) 3.5
Directors & Management
Peter Thompson Chairman & MD
Cameron Switzer Non-Exec Director
Neil Norris Exploration Director
Kevin Hart Company Secretary
Major Shareholders
UOB Kay Hian
UOB Kay Hian
UOB Kay Hian
5.8%
Swift Venture Holdings 3.8%
Bell Potter Nominees Ltd 3.3%
Superfine Nominees Pty Ltd 2.6%
Carpentaria Corporation P/L 2.1%
Analyst
Andy Comas
+61 8 9488 0800
12 Month Share Price Performance
GBM Resources Limited
World Class IOCG Discovery Potential
19 December 2011
ASX Code: GBZ
Speculative Buy
Page 2 – Copyright © 2011 RM Research - www.rmresearch.com.au
19 December 2011
Mt. Isa/Cloncurry Mining District: The presence of world class, long life mine projects in the
district acknowledges the potential for similar discoveries yet to be made. The long history of
mining provides a ready workforce, infrastructure, and all support services.
Large mining companies such as Xstrata and Ivanhoe Mines continue to expand their
interests in the region. Xstrata made a move into the area by taking over Mt Isa Mines in
2003 and in 2011 acquiring the Cloncurry Copper Project from Exco Resources Ltd (ASX:
EXS) for $175 million. Ivanhoe Mines through its Australian entity Ivanhoe Australia Ltd
(ASX: IVA) already has a large footprint and recently announced a new JV with EXS to
explore for copper in the Cloncurry region. CDU’s new high grade copper/cobalt discovery at
its Rocklands project is now moving towards the final approval stages prior to the start of
mining.
COMPANY OVERVIEW
GBM Resources Limited (“GBM Resources”, “GBM” or “the Company”) is a Perth based
exploration company with IOCG type copper and gold resources with REE, phosphate, and
gold projects in Queensland and copper and gold projects in Victoria. The Company listed on
the ASX on 24 October 2007 raising A$3.4 million.
Since listing, GBM has entered into two joint ventures. The largest is with Japanese firms Pan
Pacific Copper (“PPC”) and Mitsui Corporation (Pan Pacific/Mitsui JV discussed below) via
the company Cloncurry Exploration and Development Pty Ltd (“CED”) with a A$55 million
farm-in agreement on the Bungalien, Talawanta-Grassy Bore, Chumvale Breccia and Mount
Margaret Projects. The other JV is with Singapore based Swift Ventures Pty Ltd for the
phosphate rights on the Bungalien tenements (Bungalien Phosphate JV discussed below).
The Milo prospect is just one prospect that makes up the Brightlands Cu/Au Project. GBM’s
projects cover IOCG (copper/gold, Cloncurry, Queensland) via the PPC/ Mitsui JV, the
Bungalien Phosphate Project (Cloncurry, Queensland), Mt Morgan (gold/copper,
Queensland), Diamond Creek (gold, Queensland), Malmsbury (gold, Victoria), Willaura
(copper/gold, Victoria), and Yea (gold, Victoria). See Figure 1.
FIGURE 1: Project
Location Map (source:
GBM Resources ASX
Announcement 31st
October 2011).
Large mining companies
continue to expand their
footprint in the region.
The Milo project is
GBM’s lead project.
Page 3 – Copyright © 2011 RM Research – www.rmresearch.com.au
19 December 2011
EXPLORATION OVERVIEW
Brightlands Cu/Au Project
Location and Access
The Brightlands Project is located due east of major regional town Mount Isa in far northwest
Queensland. The tenements that make up the project cover some 300 km2 and are situated
just 20 kilometres west of Cloncurry and straddle the Mt.Isa/Cloncurry Barkly Highway. By
comparison, CDU‟s Rocklands Project covers just 20 km2. The prospects that make up the
Brightlands project are all prospective for IOCG type Cu/Au mineralization. The main
prospects are Milo, Tiger, Tambourine, Chumvale, and Butcher‟s Creek (Figure 2). As the Milo
prospect is the main focus of exploration at the Brightlands Project and limited exploration has
been conducted on the other prospects, commentary is restricted to just the Milo prospect.
Milo Prospect
The Milo prospect is the priority exploration target and is located in the northwest of the
Brightlands Project. To date, only around 700 meters of a possible two kilometre strike length
(as defined by soil sampling) has been drilled and of that, only around 700 meters strike has
been drilled on sections spaced approximately 100 meters apart. The mineralized zone is
thought to be around 200 meters wide. A total of just 20 holes have been drilled by GBM for a
total 7,500 meters (Figure 3). Further drilling will be required to determine the extent of
mineralisation.
Figure 2: Brightlands
Project Location Map
(source: GBM
Resources ASX
Announcement 31st
October 2011).
.
Page 4 – Copyright © 2011 RM Research – www.rmresearch.com.au
19 December 2011
Geology and Mineralisation
The Brightlands tenements lie within the Eastern Succession of the Isa Block where known mines or resources are all associated with major structural features and lithological boundaries that have been the source of mineralizing fluids. Geological studies suggest that the alteration, breccia, and coincident structural features at the Milo prospect indicate the likelihood of a significant deposit in the area. A north-south magnetic low anomaly has been interpreted as a possible buried granite that gave rise to the uranium and REE mineralization. A visual inspection of the Milo diamond drill core revealed highly brecciated rock, however it was difficult to visually distinguish the higher grade mineralized zones other than an association with disseminated pyrite. The breccia is generally striking north-south and dipping to the east and is thought to be fault related. The target mineralized breccia was observed in outcrop with greenish colored secondary copper mineralization clearly visible. An old mine shaft (depth unknown) west of drillhole BTD024 had a sulphidic scree slope suggesting sulphide mineralization was extracted in the past. Drilling has suggested that higher grade copper mineralization plunges to the north and as such the current drilling campaign is targeting the northern extension. The distribution of mineralization recorded from drilling shows a depletion of copper to the south of the prospect but an increase in the distribution of REE. There was no discernable geological feature in the field or in drill core that defined the REE enriched mineralization to the south of the prospect. The presence of lanthanum is thought to occur as a halo overprinting the poly-metallic mineralization however the relationship still warrants further investigation.
FIGURE 3: Milo Project
drill location map
overlying the magnetic
image (source: GBM
Resources ASX
Announcement 31st
October 2011).
The mineralisation
exhibited an increase in
REE towards the south
of the prospect
Page 5 – Copyright © 2011 RM Research – www.rmresearch.com.au
19 December 2011
The western extent of the mineralized envelope has yet to be determined as all drilling to date has been collared to the east of the outcrop and drilled to the west. GBM will consider
collaring a drillhole to the west of the outcrop and drill to the east in order to determine the western extent of the brecciated mineralization. Copper grades of 0.1% or greater are considered significant and the contained metal content of 0.4% copper equivalent is considered the base grade in determining the project‟s economics. The current concept and exploration focus is to work towards rapidly defining an open-pit mining operation on the Milo prospect.
Metallurgical Test Work
Initial metallurgical test work between April & September 2011 demonstrated that the multi-
metal mineralisation at the Milo prospect can be economically extracted to produce a copper/
gold/molybdenite concentrate, a low grade gold concentrate for cyanidation, and tailings for
uranium leaching. The poly-metallic recovery flow chart is outlined in Figure 4.
The copper component of the polymetallic mineralisation occurs as coarse grained
chalcopyrite that is 75-80% recoverable through a standard flotation process to provide a
concentrate of 24-27% copper content. Other metal recoveries returned are gold & silver 75-
80%, molybdenum up to 80%, and uranium over 90%. Cobalt, magnetite, and REE recoveries
will be determined in the next round of met test work which is expected to be completed as
early as February 2012.
Future Work Program
Given the metallurgical testing has proved the various contained metals can be
successfully extracted, a Scoping Study is now underway with a completion date in
mid-2012.
Further drilling to define the north, south, western and depth extremities of the
mineralization.
Closer spaced infill drilling to increase the level of confidence and geological data.
Further metallurgical test work on the cobalt, magnetite, and REE components.
A Preliminary Feasibility Study (PFS) is envisaged by mid-2012.
The initial exploration
target is between 30-80
million tonnes of poly-
metallic mineralization
grading 0.8%-1.2% Cu-
equivalent.
Initial met testing
shows that the multi-
metal mineralisation
can be economically
extracted.
FIGURE 4: Poly-metallic
Process Flow Chart
(source: GBM
Resources ASX
Announcement 31st
October 2011).
Page 6 – Copyright © 2011 RM Research – www.rmresearch.com.au
19 December 2011
PPC/Mitsui JV Project, QLD
Location and Access
In April 2011, GBM entered into a farm-in agreement with Pan Pacific Copper (“PPC”) and
Mitsui Corporation via their co‐established Australian company Cloncurry Exploration and
Development Pty Ltd (“CED”) to conduct exploration on five project areas in the Mt Isa
region of North Queensland. The projects cover a combined expanse of around 1,767km2 of
highly prospective poly-metallic ground in the Eastern Succession of the Mount Isa Inlier. The
farm-in agreement is on the Bungalien, Talawanta-Grassy Bore, Chumvale Breccia and Mount
Margaret Projects (Figure 5).
Farm-in Agreement CED executed the binding agreement to earn up to a 90% interest by spending A$55million
on the exploration and development of IOCG style projects in northwest Queensland. The first
tranche of funding for A$3.5 million has already been approved for exploration up to March
30th
2012. The Farm‐in Agreement details include:
the right to earn a 51% interest in the projects by spending a total of A$15 million
within a six year period.
CED is required to spend a minimum of A$2 million on exploration during the first
two years of the agreement.
During the initial farm‐in period, GBM will manage all exploration activities on the
projects.
CED may subsequently increase its interest up to 90% in the projects (other than the
Chumvale Breccia Prospect) by spending A$1.026 million for each 1% increment for
total additional expenditure of $A40 million.
Upon CED acquiring a 90% interest in the projects, GBM will retain a free carried
interest of 10% through to the completion of a Bankable Feasibility Study on the
projects.
FIGURE 5: PPC/Mitsui
JV Project Location Map
(source: GBM
Resources ASX
Announcement 31st
October 2011).
A$55 million spend on
exploration for IOCG
style mineralization.
Page 7 – Copyright © 2011 RM Research – www.rmresearch.com.au
19 December 2011
Geology and Mineralisation
Bungalien IOCG Project
The PPC/M JV covers exploration of basement lithologies for IOCG style mineralization only
as the near surface phosphate mineralization is covered by a separate JV agreement by GBM
with Swift Ventures Pty Ltd. The tenements include four granted exploration permits,
Bungalien EPM14355, Horse Creek EPM15150, Malbon2 EPM 14120 and Limestone Creek
EPM 17849 and together with applications (EPMA18207 &18208) cover a total of 722 km2.
Exploration is targeting strong magnetic anomalies at the Bungalien, Malbon2, and Horse
Creek prospects that are thought to be IOCG style targets. The targets are covered by 100-
500 meters of sediments. After detailed gravity surveys over potential targets, three diamond
drill holes have been completed at the Bronzewing Bore Prospect and one diamond hole
MLB001 was completed at the Malbon2 Prospect.
Drillhole BNG001 confirmed IOCG style mineralization exists at Bungalien with a wide zone of
anomalous copper averaging 0.1% Cu over 200 meters with the best width grading 0.3% over
24 meters. Inspection of the drill core revealed some chalcopyrite associated with pyrite and
magnetite in weathered, brecciated granite.
Drillhole BNG002 was drilled one kilometer to the south into an interpreted gravity high, and
BNG003 was drilled a further one kilometer southwest of BNG002 into an interpreted
magnetic high. Assay results for these two holes are still pending.
At the Horse Creek Prospect detailed gravity surveys have been completed but no drilling as
yet.
Talawanta-Grassy Bore
Detailed gravity surveys have been completed over the Talawanta and Grassy Bore
tenements with results showing gravity highs that are coincident with magnetic highs. The
prospects have between 300 metres to over 600 metres of cover. The results are interpreted
as typical for IOCG type targets. The two holes drilled to date at the Grassy Bore Project‟s Ibis
Prospect intersected no significant sulphides however the magnetite skarn type mineral
alteration assemblage suggests that the drilling was on the periphery of an IOCG system
similar to the district‟s Ernest Henry Mine.
One diamond drill hole has been completed recently at each project with assay results
pending. A further three diamond holes are scheduled to be drilled at Talawanta in the current
drilling campaign with results due thereafter.
Chumvale Breccia
The Chumvale Breccia is a five kilometer by one kilometer target. A geophysical IP survey has
been completed and three diamond drill holes have been planned. Assay results for the first
drill hole are pending.
Mount Margaret Projects
These tenements are also prospective for IOCG type mineralization similar to the nearby
Ernest Henry Mine. To date, very little work has been carried out on the tenements by GBM
and geophysical surveys are to be conducted initially in order to identify suitable deep drill
targets into the basement.
Future Exploration
Interpretation of all drilling, geophysics and geological data is on-going in order to generate
further drill targets and to fully understand the distribution of mineralisation. At Bungalien, joint
venture partner PPC is looking to conduct a SQUITEM geophysical survey in order to better
define drill targets in the basement lithologies. Further drilling is expected at the Bronzewing
Bore Prospect, at Mt. Margaret, and three more drill holes are planned at Talawanta on the
completion of an MT geophysical survey which should better define the drill targets through
the overlying cover.
Assay results are
pending
Drilling results from
Talawanta-Grassy
Bore and Chumvale are
also pending
Page 8 – Copyright © 2011 RM Research – www.rmresearch.com.au
19 December 2011
BUNGALIEN PHOSPHATE PROJECT
Location and Access
The Bungalien Phosphate Project is
located 80 kilometres southeast of Mt
Isa in the Georgina Basin, far
northwest Queensland. The project
currently has three granted tenement
areas named Bungalien (EPM14355),
Horse Creek (EPM14120 &
EPM15150) and Limestone Creek
(EPM17849) which cover around 722
square kilometres (Figure 6).
The tenements between Bungalien
and Horse Creek (EPM18207/208)
and extending south to Limestone
Creek are currently under application
and if granted, will give GBM one of
the largest tenement holdings
prospective for phosphate in the
Georgina Basin. This basin hosts the
largest phosphorite deposits in
Australia with the largest discovered
to date being the Incitec Pivot (ASX:
IPL) owned Phosphate Hill Mine
which is located about 50 kilometres
south of the Bungalien tenement.
Incitec’s reserve is thought to be around 85 million tonnes at 24% P2O5. The project area is
fortunate to have sealed road access and proximity to the Mt Isa – Townsville railway line.
Joint Venture
As announced (ASX Announcement, 21/9/2010), GBM entered into a binding agreement with
Singapore based Swift Venture Holdings Corporation (SVH) over the company‟s Bungalien
Phosphate Project to retain a 30% free carried interest until the completion of a bankable
feasibility study. SVH acquired a 70% interest via a placement of 17.8 million shares at an
issue price of A$0.10 each and 17.8 million options (exercisable at A$0.20 on or before
30/6/2013) for A$1.78 million.
Of the funds received, GBM allocated A$280,000 to further exploration of the tenements with
all future exploration being met by SVH.
Geology and Mineralisation
The Beetle Creek Formation, which hosts the phosphate deposits, is a Cambrian sedimentary
unit deposited in very shallow near-shore marine environments of the Georgina Basin
whereby the element phosphorous has precipitated out naturally as interbedded phosphatic
siltstones and cherts.
FIGURE 6: Bungalien
Project Location Map.
(source: GBM
Resources ASX
Announcement 31st
October 2011).
GBM Resources has
one of the largest
tenement holdings
prospective for
phosphate in the
Georgina Basin
Page 9 – Copyright © 2011 RM Research – www.rmresearch.com.au
19 December 2011
Recent Exploration
The maiden drilling program in 2008 of around 1,000 metres of reverse circulation drilling
confirmed that the Bungalien project is prospective for phosphates with assays up to 26%
P2O5 reported. Grades of around 25% are considered suitable as direct shipping ore and
similar to iron ore and manganese, lower grades of 10%+ can be upgraded through
beneficiation of the ore.
Wide-spaced drilling to date at Bungalien confirms that the Beetle Creek Formation is where
phosphate mineralisation is most concentrated however, the average of assays returned were
of relatively lower grade that would therefore require beneficiation in order for the resource to
be economic. The Horse Creek and Limestone Creek prospects have yet to be adequately
drill explored and further drill programs will be required in order to complete the minimum
requirements for a JORC compliant inferred resource statement.
Phosphate Sector
There are a number of phosphate projects in Australia that peer comparisons could be made
with, however, as there are no listed pure play phosphate companies direct comparisons are
virtually meaningless. Table 1 shows some of the more advanced projects.
Future Exploration
Metallurgical testing of the phosphorite is planned in order to determine the level of impurities
and whether the grade can be beneficiated to higher grade direct shipping ore. Additional
drilling is still required to define the extent of mineralisation across the tenement package in
order to eventually determine a JORC compliant resource.
Project Location Company Tonnage P2O5 Status
Bungalien Mt Isa QLD GBM Resources ASX: GBZ Not known yet Up to 26% Exploration
Wonerah NT Minemakers ASX: MAK 1.5 Bt 12% Feasibility
Paradise Mt Isa QLD Legend International Holdings Inc
OTCBB: LGDI
516 Mt 15% Feasibility
Phosphate
Hill
Mt Isa QLD Incitec Pivot ASX: IPL 1.2 Bt 17% In production
Highland
Plains
NT Phosphate Australia ASX: POZ 56 Mt 16% Exploration
Korella Mt Isa QLD Krucible Metals ASX: KRB 19.3 Mt 19% Exploration
GeolSec NT Korab Resources Ltd ASX: KOR 1.3 Mt 12% Feasibility
The Bungalien project
is prospective for
phosphates with assays
up to 26% P2O5
reported.
TABLE 1: Australian
phosphate companies
(source, RM Research
November 2011).
FIGURE 7: Rock
Phosphate Price Chart
(source: InfoMine.com)
Phosphate currently sells
for around US$200/tonne
(Figure 7) and is a non-
renewable resource that is
in demand as an
agricultural fertilizer to
increase crop yields and
animal feed supplement
among other uses.
Page 10 – Copyright © 2011 RM Research – www.rmresearch.com.au
19 December 2011
OTHER PROJECTS
Mount Morgan Project: (GBM 100%, Rockhampton, Queensland; gold): The Mount
Morgan tenements cover around 1083 square kilometers adjacent to the world class
Mount Morgan Au-Cu mine and also cover the Limonite Hill Cu-Mo-Au prospect. The
project is currently at an early exploratory stage aimed at generating drill targets with
soil and rock chip sampling results due early 2012.
Willaura Project: (GBM 100%, Western Victoria: copper & gold): The Willaura
project is located near Ballarat and is prospective for intrusive related porphyry
copper/gold style mineralisation. The tenements cover around 132 km2
and are
relatively under-explored to date (Figure 8).
Malmsbury Project: (GBM 100%, Central Victoria; gold) The Malmsbury tenements
cover 106 km2 in the Ballarat/Bendigo trend with numerous historical gold workings
of gold bearing reef structures (Figure 8). GBM have drilled one diamond drill hole
confirming that an intrusive related gold system (IRGS) with the potential to host a
significant gold resource is present. The Leven Star Zone prospect has an inferred
resource of 820,000 tonnes @ 4 g/t containing 104,000 ozs of gold and is open along
strike and at depth.
Yea Project: (GBM 100%, Central Victoria; copper & gold): The Yea tenements
cover 1000 square kilometers that are prospective for IRGS containing gold,
tungsten (W), molybdenum (Mo), and copper (Figure 8). A scout drill hole MGDD08
at the Monkey Gully prospect confirmed the presence of W and Mo. Further soil
sampling, mapping, and geophysics is planned in order to generate additional drill
targets.
FIGURE 8: Victorian
Project Location Map.
The yellow dots
represent known gold
resources. (source: GBM
Resources ASX
Announcement 29th
September 2011).
The Leven Star Zone
prospect has an inferred
resource of 104,000 ozs
of gold.
The Yea project is an
Intrusive Related Gold
System (IRGS).
Page 11 – Copyright © 2011 RM Research – www.rmresearch.com.au
19 December 2011
RISK ANALYSIS
Further exploration may not define an economic JORC compliant resource at any of the
Company‟s projects as to date the level of drill exploration is not close-spaced enough to
define a sufficient level of confidence in the continuity of the data. This may have a
negative impact on the securities of the Company.
GBM has just over A$3 million cash left for exploration and other activities. A capital
raising may be required to increase cash reserves if a scoping study leads to a pre-
feasibility study in 2012. This could be dilutionary to existing shareholders.
Further declines in equity markets may continue to put pressure on junior resource
companies as investors switch out of “risk” into perceived safe haven investments such as
cash, gold and counter cyclical equities. Our medium term view is that the risk premium
has been eroded for many junior resource companies and we see near term upside as
risk adverse shareholders would have exited these stock by now.
Positive ongoing exploration results, an initial JORC compliant resource statement and a
pre-feasibility study should have positive impacts on the company‟s share price.
PENDING MILESTONES
RM Research forecast news releases to the ASX are as follows:
January 2011
Drilling at Milo North with the expected discovery of further Cu mineralisation that
extends the strike length of mineralisation
Scoping study to generate a maiden JORC inferred resource continues for the Milo
prospect
Mount Morgan field work results released.
February 2012
Metallurgical results for REE in Milo drill core due.
Milo North prospect drilling results due.
March 2012
Expected release of the JORC compliant inferred resource for the Milo prospect.
Milo prospect economic study results to be released.
June 2012
Preliminary Feasibility Study for the Milo prospect.
RM Research project three share price enhancing possibilities:
Milo project JV with a major investor to assist in funding.
JV or spinout of eastern Queensland and Victorian projects.
Spinout of the Bungalien phosphate JV project as a stand-alone project.
Progressing to a maiden
JORC statement and a
pre-feasibility study
should be positive for the
share price.
Three share price
enhancing forecasts.
Page 12 – Copyright © 2011 RM Research – www.rmresearch.com.au
19 December 2011
DIRECTORS AND MANAGEMENT
Peter Thompson, CPA. CHAIRMAN & MANAGING DIRECTOR
Mr Peter Thompson is a senior resources industry figure with over 30 years experience across
Australia, the UK, and South America including stints at MIM Holdings, Xstrata Plc, and Mt
Edon Gold Mines. He has held directorships at Queensland mining and civil contractor JJ
McDonald & Sons Group and ASX listed Golden West Resources. He is a CPA qualified
accountant and a Fellow of Chartered Secretaries Australia.
Neil Norris EXPLORATION DIRECTOR
Mr Neil Norris has some 25 years experience in mining and exploration as a geologist with
involvement in the discovery of Newcrest’s Cadia and Ridgeway mines in New South Wales
to his credit and the Phoenix gold deposit at Fosterville in Victoria. Before joining GBM, Mr
Norris held senior roles with Newmont Australia Ltd and was Group Exploration Manager for
Perseverance Corporation Ltd. He is the main driver of GBM‟s technical and strategic
direction.
Cameron Switzer NON-EXECUTIVE DIRECTOR
Mr Cameron Switzer is a Queensland based geological consultant with over 20 years
experience as a geologist across the globe and importantly for GBM he was Principal
Geologist with MIM Exploration Ltd the diverse experience he gained across a range of
geological deposits and environments benefits the company in its exploration activities.
Additionally, he has held senior roles including Senior Project Geologist at Newcrest Mining
Ltd’s Telfer gold mine in Western Australia and Geology Manager at Acacia Resources
Ltd’s Union Reef gold mine in the Pine Creek goldfields.
CONCLUSION
The renaissance of exploration in the Mt Isa Inlier/Cloncurry district will result in an increase of
new discoveries for IOCG style mineralisation or for other commodities such as phosphate
and REE. Junior exploration companies such as CDU are leading the push as are the large
foreign global miners such as Xstrata, Ivanhoe Mines, and Teck Cominco.
The Milo prospect is GBM’s lead exploration project that will be the priority focus in order for
the company to move to a scoping study and then an ensuing feasibility study. A positive
outcome will see the company move to its first mining project. The question is, will this
prospect be a copper and/or REE story?
In order to focus exploration funds and personnel RM Research foresees that the Victorian
gold projects and the Mount Morgan project could be considered for JV partnerships similar to
the Bungalien Phosphate JV and the PPC/Mitsui JV.
It is envisaged that the potential of the Bungalien Phosphate JV project can be best realized
by being spun-out of the company as a standalone project.
With further resource delineation drilling having commenced at Milo and the value adding
results of REE analysis reported, RM Research considers that the potential of GBM is about
to be unlocked. In the first quarter of 2012, RM Research will consider a target price that
conceivably could be a multiple of the current price if the pending milestones are attained.
Speculative Buy.
Experienced
management.
Neil is a geologist with
cred.
Cameron has experience
pertinent to GBM’s
projects.
A positive scoping study
may see the company
move to its first mining
project.
Page 13 – Copyright © 2011 RM Research – www.rmresearch.com.au
19 December 2011
Registered Offices
Perth
Level 2, 6 King‟s Park Road
West Perth WA 6005
Phone: +61 8 9488 0800
Fax: +61 8 9488 0899
PO Box 154 West Perth WA 6872
Email / Website
www.RMresearch.com.au
RM Research Recommendation Categories
Care has been taken to define the level of risk to return associated with a particular company. Our recommendation ranking system is as follows:
Buy Companies with „Buy‟ recommendations have been cash flow positive for some time and have a moderate to low risk profile. We expect these to outperform the broader market.
Speculative Buy We forecast strong earnings growth or value creation that may achieve a return well above that of the broader market. These companies also carry a higher than normal level of risk.
Hold A sound well managed company that may achieve market performance or less, perhaps due to an overvalued share price, broader sector issues, or internal challenges.
Sell Risk is high and upside low or very difficult to determine. We expect a strong underperformance relative to the market and see better opportunities elsewhere.
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