Ponds at Woodvale.

GBM Gold has demanded the mining regulator withdraw a regulatory notice ordering the company to control dust at the Woodvale evaporation ponds.

On Tuesday, Earth Resources Regulation notified media it had issued a notice to GBM to cover the ponds with water “so that they do not dry out and produce dust ahead of the peak summer period.”

But GBM chief executive John Harrison said the issue of a section 110 notice under the Mineral Resources Act was “a totally unjustifiable action”, because the company was meeting its responsibilities.

“There was no consultation with GBM prior to the issue of the notice,” Mr Harrison said.

“GBM is fully compliant with its obligations – ponds one, two and three are covered in water (from recent rain) and two megalitres of water per day is being received from Coliban Water.

“This renders the premise for the s110 notice to be totally false (and) GBM has demanded that the notice be withdrawn.”

But the regulator said the notice covered a longer period including the dry months of summer and the issue of a notice was a regulatory mechanism to ensure the company acted accordingly.

“Mine operators are required to fulfil their obligations to manage risks and protect local communities,” ERR executive director Anthony Hurst said in a media statement.

“Earth Resources Regulation will step in to ensure safeguards are met.

“We will continue to closely monitor the Woodvale ponds site for compliance over the summer months.”

The regulator said it was also seeking assurances from the company about its financial situation after it alerted the Australian Stock Exchange to funding issues.

GBM’s shares were voluntarily suspended for several weeks in October pending news of a capital raising and then a loan which was also to have provided capital to start processing work at the Kangaroo Flat site.

A bond worth $5.9 million is in place to cover all of the rehabilitation work for the sites at Kangaroo Flat and Woodvale.

A GBM spokesperson said the company would issue a statement soon updating investors about its financial security.