Interim Results for the 6 months ended 31 Dec 2024
31/03/2025 07:00
RNS Number : 8706C
GCM Resources PLC
31 March 2025
31 March 2025
GCM Resources plc
("GCM" or the "Company")
Interim Results for the 6 months ended 31 December 2024
GCM Resources plc (AIM: GCM), the AIM traded resource exploration and development company, announces its Interim Report for the six months to 31 December 2024.
Highlights and Outlook
· Bangladesh's new Government appears serious in addressing its lack of domestic coal production in the near term:
· Bangladesh is currently almost entirely reliant on imports of coal to fuel its growing number of power stations to meet burgeoning demand for energy - an issue compounded by a natural gas shortfall in country
· Bangladesh's level of coal imports surged 44% in 2023(1)
· The Company believes the outlook for moving the proposed Phulbari coal mine forward has greatly improved on the basis of:
o The recent demonstration by the new Government (and its Ministry) that domestic coal must be extracted and that the proposed Phulbari coal mine is a big factor is delivering the necessary coal supply
o Bangladesh's economy remaining under pressure with respect to foreign exchange reserves, inflation and purchasing power
(1)Theglobaleconomy.com
Chairman's Statement
Whilst it is generally expected that the Chairman's Statement commences by chronologically running through events in the reporting period, there has been an exciting recent development that needs to be highlighted. Over the past year our Dhaka team has reported on efforts by the Ministry for Power, Energy and Mineral Resources ("the Ministry") to prepare a presentation focusing on strategies and challenges related to the country's coal-based energy sector. This initiative waxed and waned as the country's political landscape changed but we are delighted to report that a government organised seminar focussed on "Prospects and Challenges of Bangladesh's Coal Resources and Measures to Overcome" took place on 27 February this year.
The Seminar was chaired by the Energy Secretary with the Energy Adviser as the chief guest. There were over 70 invited guests with some 40% being government agency officials, 50% from academia and 10% media representatives. The Energy Adviser set the scene regarding the coal debate and said that the country needs to decide on coal extraction, whether to pursue open-pit or underground mining, how to select the mining companies, and whether to review existing studies or conduct new ones. The Energy Secretary emphasised that the time has come to decide to use the country's resources. He stated the country has many coal-based power plants and is struggling to pay foreign currency for coal imports. He further stated that the seminar had been organized to create a roadmap for using national resources and that decisions will be made on how to utilize the country's coal resources following discussions with participants at the seminar.
The Seminar was informed that to save hard-earned foreign currency in an import-dependent energy system, urgent decisions must be made to extract the vast amount of coal reserves in the country in the national interest. Coal-based power plants with a capacity of some 8,000 megawatts have been established in the country, however due to a lack of coal, the plants in operation cannot run at full capacity. A significant amount of foreign currency is being spent on coal imports. In this situation, there is no alternative but to start extracting the 7,823 million tons of coal reserves. The southern part of the government-owned Barapukuria coal mine and the proposed Phulbari coal project have completed all necessary surveys and are ready for mining activities.
It is significant for GCM and its shareholders that this Seminar being led by the Energy Adviser and Energy Secretary, finally demonstrates positive intentions by the Bangladesh Government to develop its domestic coal resources. This message was reinforced by the Presentation by Government personnel that highlighted the proposed Phulbari coal mine readiness and benefits and its ability to help solve the country's coal supply needs. Together with our consultants we are examining the steps to be taken that maximise leverage from the Seminar in pursuit of approval and development of the Project.
Back to the reporting period; it was dominated by a radical change in the Bangladesh political landscape that started mid-year with student led protests focused on public service job quota reforms to provide equality in job applications. However, the situation quickly escalated into a larger anti-government demonstration, that on 5 August led to the resignation of the long-term Awami League and caused the former Prime Minister to flee Bangladesh.
Nobel laureate Dr Muhammad Yunus agreed to take on the role of Chief Adviser and form an Interim Government chartered with maintaining law and order and implementing major institutional reforms in preparation for fair elections. The Interim Government has 21 Advisers to guide the various ministries, and it established 11 commissions to report on these reforms, including those for the Constitution, electoral system, police administration, judiciary, anti-corruption, and public administration.
From its inception, the Interim Government led by Dr Yunus has enjoyed international community support and was not pressured to hold elections immediately, in recognition that these reforms will take time to implement. Although in the months following this reporting period, re-emerging political parties are increasingly pushing for early elections. However, this growing impatience has been tempered by the formation of a student-led political party, 'Jatiya Nagorik Party' (National Citizens' Party), which will take time to galvanize its country-wide networks.
In the reporting period, the Company announced on 15 July that it had appointment of Zeus Capital Limited as Nominated Adviser and Joint Broker. This change followed the acquisition of WH Ireland Capital Markets Division by Zeus Capital Limited. The Company subsequently notified on 5 November 2024 that it had received a notice of resignation from Zeus Capital Limited and had appointed Allenby Capital Limited as Nominated Adviser and Joint Broker.
On 26 November, the Company announced that Gary Lye had stepped down from his position of Executive Director and would continue to focus on its operations in Bangladesh in the capacity a GCM's non-board Chief Operating Officer and Chief Executive Officer of wholly owned subsidiary, Asia Energy Corporation (Bangladesh) Pty Ltd.
On 13 December, the Company held its Annual General Meeting 2024 in London and also announced that its development partner, Power Construction Corporation of China, Ltd ("PowerChina") had agreed to an extension of the Memorandum of Understanding ("MoU") primarily focused on the Phulbari coal mine development. GCM and PowerChina have already made a significant step towards developing the Phulbari coal mine via the EPC contract for "Phulbari Coal Mining Infrastructure Construction and Overburden Stripping" (announced 11 March 2024) and work under the MoU aims to derive the modality for PowerChina's involvement in other work packages and financing.
Just outside the reporting period, the Company announced on 8 January 2025 renewal of the consultancy agreement with Dyani Corporation ('Dyani") on similar terms as that which had expired on 30 June 2022. Under the terms of the extended agreement which expires on 31 December 2025, Dyani will continue to promote the Phulbari Coal and Power Project ("the Project"), grow the relationship with development partner, PowerChina, and identify additional business opportunities that could be developed as adjuncts to the Project.
On 28 January 2025, the Company announced it had renewed the consultancy agreement with DG Infratech Pte Ltd ("DGI") through to 31 December 2025. Under the agreement, DGI will continue to provide advisory, management, lobbying and consultancy services to assist with approvals and cooperation necessary to develop the Project.
Financials
GCM incurred a loss after tax of £1,302,000 for the six months ended 31 December 2024 (31 December 2023: loss after tax of £702,000). The most significant expenditure during the period was pre-development (non-cash) expenditure as a result of the renewal of consultants' contracts, while administrative expenses for the six months ended 31 December 2024 were £461,000 (31 December 2023: £355,000) and capitalised project expenditure for the period was £259,000 (31 December 2023: £173,000).
On 28 March 2025, GCM announced that it had conditionally raised approximately £1.0 million (before expenses) by way of a placing (the "Placing") of a total of 33,333,333 new ordinary shares of 1 pence each in the Company ("Ordinary Shares") at a price of 3.0 pence per new Ordinary Share (the "Issue Price"). The net proceeds of the Placing will provide the necessary working capital to support GCM's ongoing operations. These funds will be allocated to corporate overheads, legal and advisory costs, and general administrative expenses associated with managing the Company effectively. The net proceeds of the Placing will help ensure that the Company is in the financial position to advance its broader strategic objectives.
Outlook
It is apparent from the forementioned Seminar and its action-orientated title: "Prospects and Challenges of Bangladesh's Coal Resources and Measures to Overcome", the Government is serious regarding developing its domestic coal resources. It is also apparent from the fact that the Presentation to the Seminar by Ministry officials highlighted the benefits of developing the Phulbari coal mine that the GCM Project is on their radar as an important non-import coal supply solution.
Against this backdrop, it appears the outlook for moving the Project forward has greatly improved and that it is now more the question of when. In the analysis of "when", considerations will involve the sense of urgency driven by the country's economic position and the election schedule. With regard to the former, the economy is reported to remain under pressure with respect to foreign exchange reserves, inflation and purchasing power of the local currency. Compounding this is the mounting uncertainties within the world economy and the suspension of foreign aid by the US government. Regarding the latter, the mainstream political parties are calling for an early election to restore democracy and shore up law and order, however, the Chief Adviser remains circumspect and although has suggested an election by December 2025 is possible, it is also suggested this would depend on acceptance of reforms which are yet to be finalised.
The Directors are appreciative of enduring support of its shareholders, stakeholders and staff
The recent demonstration by the Government and its Ministry that domestic coal must be extracted and that the proposed Phulbari coal mine is a big factor is delivering the necessary coal supply, enhances our confidence that the Project is poised to move forward.
Paul Shackleton
Acting Non-Executive Chairman
| 6 months ended 31 December 2024 unaudited £000 | 6 months ended 31 December 2023 unaudited £000 | Year ended 30 June 2024 audited £000 | ||
| Operating expenses | ||||
| Pre-development expenditure | (628) | (90) | (90) | |
| Exploration and evaluation costs | 41 | (15) | (2) | |
| Administrative expenses | (461) | (355) | (807) | |
| Operating loss | (1,048) | (460) | (899) | |
| Finance revenue | 12 | - | 5 | |
| Finance costs | (266) | (242) | (494) | |
| Loss before tax | (1,302) | (702) | (1,388) | |
| Taxation | - | - | - | |
| Loss and total comprehensive income for the period | (1,302) | (702) | (1,388) | |
| Earnings per share | ||||
| Basic loss per share (pence) | (0.5p) | (0.3p) | (0.6p) | |
| Diluted loss per share (pence) | (0.5p) | (0.3p) | (0.6p) | |
| Share capital £000 | Share premium account £000 | Share based payments not settled £000 | Accumulated losses £000 | Total £000 | |
| Balance at 1 July 2023 | 12,748 | 58,054 | 569 | (33,952) | 37,419 |
| Total comprehensive loss | - | - | - | (1,388) | (1,388) |
| Share issuances | 689 | 2,052 | (180) | - | 2,561 |
| Share issuance costs | - | (228) | - | - | (228) |
| Shares to be issued | - | - | 90 | - | 90 |
| Share based payments | - | - | 2 | - | 2 |
| Balance at 30 June 2024 | 13,437 | 59,878 | 481 | (35,340) | 38,456 |
| Total comprehensive loss | - | - | - | (1,302) | (1,302) |
| Share issuances | - | - | - | - | - |
| Shares to be issued | - | - | 628 | - | 628 |
| Share based payments | - | - | 1 | - | 1 |
| Balance at 31 December 2024 (unaudited) | 13,437 | 59,878 | 1,110 | (36,642) | 37,783 |
| Balance at 1 July 2023 | 12,748 | 58,054 | 569 | (33,952) | 37,419 |
| Total comprehensive loss | - | - | - | (702) | (702) |
| Share issuances | - | - | - | - | - |
| Shares to be issued | - | - | 90 | - | 90 |
| Share based payments | - | - | 1 | - | 1 |
| Balance at 31 December 2023 (unaudited) | 12,748 | 58,054 | 660 | (34,654) | 36,808 |
| Notes | 31 December 2024 unaudited £000 | 31 December 2023 unaudited £000 | 30 June 2024 audited £000 | |
| Current assets | ||||
| Cash and cash equivalents | 983 | 54 | 1,658 | |
| Receivables | 37 | 38 | 22 | |
| Total current assets | 1,020 | 92 | 1,680 | |
| Non-current assets | ||||
| Right of use assets | 11 | 30 | 21 | |
| Intangible assets | 3 | 44,069 | 43,540 | 43,810 |
| Total non-current assets | 44,080 | 43,570 | 43,831 | |
| Total assets | 45,100 | 43,662 | 45,511 | |
| Current liabilities | ||||
| Payables | 4 | (1,385) | (1,417) | (1,380) |
| Lease liabilities | (9) | (32) | (15) | |
| Borrowings | 5 | - | - | - |
| Total current liabilities | (1,394) | (1,449) | (1,395) | |
| Non-current liabilities | ||||
| Lease liabilities | - | - | (3) | |
| Borrowings | (5,923) | (5,405) | (5,657) | |
| Total non-current liabilities | (5,923) | (5,405) | (5,660) | |
| Total liabilities | (7,317) | (6,854) | (7,055) | |
| Net assets | 37,783 | 36,808 | 38,456 | |
| Equity | ||||
| Share capital | 6 | 13,437 | 12,748 | 13,437 |
| Share premium account | 6 | 59,878 | 58,054 | 59,878 |
| Other reserves | 1,110 | 660 | 481 | |
| Accumulated losses | (36,642) | (34,654) | (35,340) | |
| Total equity | 37,783 | 36,808 | 38,456 |
| 6 months ended 31 December 2024 unaudited £000 | 6 months ended 31 December 2023 unaudited £000 | Year ended 30 June 2024 audited £000 | ||
| Cash flows used in operating activities | ||||
| Loss before tax | (1,302) | (702) | (1,388) | |
| Adjusted for: | ||||
| Non-cash pre-development expenditure | 628 | 90 | 90 | |
| Non-cash finance costs | 266 | 242 | 494 | |
| Other non-cash expenses | - | - | 8 | |
| (408) | (370) | (796) | ||
| Movements in working capital: | ||||
| (Increase)/decrease in operating receivables | (14) | (1) | 2 | |
| Increase/(decrease) in operating payables | 1 | 58 | 31 | |
| Cash used in operations | (421) | (313) | (763) | |
| Net cash used in operating activities | (421) | (313) | (763) | |
| Cash flows from investing activities | ||||
| Payments for intangible assets | (254) | (176) | (444) | |
| Payments for property, plant and equipment | - | - | - | |
| Net cash generated from investing activities | (254) | (176) | (444) | |
| Cash flows from financing activities | ||||
| Issue of ordinary share capital | - | - | 2,550 | |
| Share issue costs | - | - | (228) | |
| Proceeds from borrowing | - | - | - | |
| Interest paid | - | - | - | |
| Net cash from financing activities | - | - | 2,322 | |
| Total (decrease)/increase in cash and cash equivalents | (675) | (489) | 1,115 | |
| Cash and cash equivalents at the start of the period | 1,658 | 543 | 543 | |
| Cash and cash equivalents at the end of the period | 983 | 54 | 1,658 | |
| 31 December 2024 unaudited £000 | 31 December 2023 unaudited £000 | 30 June 2024 audited £000 | ||
| Trade payables | 591 | 598 | 586 | |
| Related party accrued payable | 794 | 819 | 794 | |
| Transaction costs payable | - | - | - | |
| 1,385 | 1,417 | 1,380 | ||
| 31 December 2024 unaudited £000 | 31 December 2023 unaudited £000 | 30 June 2024 audited £000 | ||
| Short-term loan facility from related party | 5,923 | 5,405 | 5,657 | |
| 5,923 | 5,405 | 5,657 | ||
| GCM Resources plc Keith Fulton, Finance Director | Tel: +44 (0) 20 7290 1630 info@gcmplc.com www.gcmplc.com |
| Allenby Capital Limited Nominated Adviser and Joint Broker John Depasquale / Vivek Bhardwaj / Ashur Joseph (Corporate Finance) Kelly Gardiner / Guy McDougall (Sales & Corporate Broking) | Tel: +44 (0)20 3328 5656 info@allenbycapital.com |
| Axis Capital Markets Limited Joint Broker Richard Hutchison / Lewis Jones | Tel: +44 (0) 203 026 0320 |