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Mosman Oil and Gas loans GEM A$100,000 to aid 'revitalisation'
Shares in Mosman Oil and Gas took a hit on Wednesday after the company admitted it has provided a loan to its partially owned subsidiary Gem International Resources (GEM) due to its "poor financial position".
The unsecured loan to GEM, a TSX-V listed diamond exploration company in which Mosman Oil and Gas holds 7.6m shares, consists of a maximum of A$100,000 with an establishment fee of $10,000 and 5% interest payable annually.
A business plan is in development after Mosman Oil and Gas chairman John Barr was added to the board of GEM as a director along with Michael Ballanger and John Campbell Smyth in February.
A financial report for the company's year ended 30 September, which is currently being audited, is set to be released in the next few days according to a statement from Mosman Oil and Gas.
John Barr, chairman of Mosman Oil and Gas, said: "The revitalisation of GEM is gaining momentum. Encouragingly, the new GEM Board have recently received several unsolicited enquiries offering capital raisings and potential projects. Following completion of the audit, the new GEM Board will then determine an appropriate business plan to present to shareholders as a basis for relaunching GEM as a revitalised company."
As of 1054 BST, Mosman Oil and Gas' shares were down 6.45% at 0.72p.