GBM Gold CEO John Harrison. Photo: ANDREW PERRYMAN

EMBATTLED miner GBM Gold has hit back at a state government department over its refusal to renew the company’s mining leases.

GBM Gold chief executive officer John Harrison said the decision by regulatory body, Earth Resources Regulation, set a bad precedent for Victorian miners and anyone contemplating gold mining or exploration.

Mr Harrison said his company was considering its options after Earth Resources Regulation took action while GBM Gold was still completing a $6.7 million fully underwritten rights issue, and said the matter could yet be headed for the Supreme Court.

“I am very disappointed with the decision of Earth Resources. We felt that we had enough financial stability to get our licences renewed.”

He said the regulator’s intervention came as a shock to the company, and that the board was still considering its options.

“We are in the middle of a capital raising which will put our company in a stronger financial position than it has ever been and our finances were satisfactory in 2016, when we were given the licences and our finances are even better now, so I am somewhat confused as to why the decision was made.”

Up to 10 staff at the Kangaroo Flat mine stand to lose their jobs following the regulator’s action.

The company has now been forced to cease work at its Kangaroo Flat site, but maintains its plan to establish a 60 megawatt solar farm on its land at Woodvale would not be impacted by the impasse.

“We will rehabilitate the site… we will have joint venture partners helping to fund the project and it is our plan as the land owners that we will have a solar farm at Woodvale.”

He said the company had spent at least $25M in the central Victoria region in the past 12 years, and that the halt to mining was a blow to the local economy.

The company has almost 700 shareholders, and most of them are from the Bendigo region.

GBM Gold believes there is still up to $12 billion of gold beneath the ground surrounding Bendigo, and Mr Harrison said the decision to ‘wipe the licences’ from this land was a disaster for the Bendigo economy.

“It lifts the risk profile for anyone coming into Victoria and puts a great deal of uncertainty on what they are doing.”

Earth Resources Regulation executive director Anthony Hurst said he believed GBM Gold was not capable of financing its mining activities and the necessary rehabilitation works at Kangaroo Flat and Woodvale.

“It’s the sum of the parts you’ve got to be able to finance and if you can’t finance those then you can’t hold the license under Victorian law.”

Mr Hurst said GBM Gold and its subsidiary, Kralcopic Pty Ltd, were obliged to rehabilitate the Woodvale and Kangaroo Flat sites, and that Earth Resources Regulation will continue to closely monitor this work.