Amara Minerals (ASX:AM3) fights GDM’s Supreme Court claim with escrowed shares as hedge

The 5 million GDM tranche unlocks on 2 August and management says proceeds cover any adverse finding

Amara Minerals (ASX:AM3) has come out swinging against Great Divide Mining’s Supreme Court claim over an ATO liability sitting inside Challenger Mines, the subsidiary that changed hands between the two companies last year.

The dispute centres on whether an ATO tax liability at Challenger Mines falls within the indemnity Amara gave GDM under the March 2025 Share Subscription Deed and the December 2025 Deed of Termination, Settlement and Release. Amara says no, and intends to defend the proceedings. Management’s position, first flagged in March, is that the liability stems from what it describes as fraudulent activities by the former accountants to both Amara and Challenger Mines, predating the current board.

The point that should reassure shareholders is the funding plan. Amara still holds 10 million GDM shares plus a 1% gold royalty over Challenger, and the first escrow tranche of 5 million shares unlocks on 2 August. A broker has already been appointed to manage the orderly sale, and Amara has explicitly said those proceeds are expected to cover any adverse Court finding.

In other words, the legal fight is being ring-fenced by an asset the company already owns.

The indemnity argument is the whole ball game

The legal question is narrow but important. GDM is arguing that when it took Challenger Mines off Amara’s hands, the indemnity in the deal documents should cover this ATO liability. Amara is arguing the opposite, on the basis that the liability arose from third-party fraud that long predates the current management.

Amara also notes it is not alone. Other listed companies have been hit with similar ATO claims tied to the same alleged conduct and are also pushing back. That is a useful contextual point because it suggests the underlying issue is a known pattern rather than a one-off accounting dispute specific to Challenger Mines.

We think the more interesting angle for investors is not who wins the legal argument, but the fact that Amara has lined up a clear, asset-backed answer to the worst-case outcome before the matter reaches a substantive hearing.

The GDM stake plus royalty is a real-world hedge

Amara’s 10 million GDM shares and 1% Challenger royalty were retained precisely so that any residual exposure from the Challenger divestment could be managed without going back to shareholders for capital. That is exactly how the package is now being used.

The orderly sale through a broker, starting with the 5 million share tranche releasing on 2 August, gives the company a runway of liquidity events through the second half of the year. The 1% royalty stays in place regardless, providing optional upside if Challenger production ramps as GDM has indicated.

Our skeptical read is that a single-stock hedge is only as good as GDM’s share price on the day Amara needs the cash. That is a risk worth flagging, but it is a manageable one and very different from the dilution risk shareholders would face without this buffer in place.

Victorian gold-antimony is still the actual investment case

Behind the legal noise, Amara’s operational story sits with the Lauriston and Apollo gold-antimony projects in Victoria, acquired in 2025. Lauriston is a 28,700-hectare tenement next door to Fosterville and hosts the Comet discovery, where historical drill hits include 8.0m at 104 g/t gold. Apollo sits in the Melbourne Zone and carries both bulk-tonnage gold potential and stibnite-style antimony mineralisation comparable to nearby Costerfield and Sunday Creek.

Antimony pricing has been a structural tailwind for this asset class since China tightened export rules, and Victorian gold-antimony is one of the few jurisdictions globally where listed exposure is meaningful. A Brazilian lithium portfolio sits alongside as longer-dated optionality.

The point is that none of this changes because of the GDM proceedings. Exploration spend continues, and the company’s capital position is not being raided to fund the legal defence.

The Investors Takeaway for Amara Minerals

Today’s announcement is designed to take the existential risk out of the GDM proceedings before the market has time to price one in. By naming the broker, flagging the August escrow release and explicitly saying the GDM share sale proceeds should cover any adverse finding, management has given shareholders a clear answer to the worst-case scenario.

The next milestones we are watching are the filing of Amara’s formal defence, the 2 August escrow release and any update on potential proceedings against the relevant accounting firm. None of those should distract from the more important questions, which are how Lauriston drilling progresses and whether the Apollo antimony angle starts attracting strategic interest. Investors looking for context on similar small-cap ASX names can find more coverage at stocksdownunder.