REG - GCM Resources PLC - MOU Extension – Phulbari Coal Mine Development

GCM ResourcesAnnouncement

13/12/2024 07:00

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RNS Number : 9389P  GCM Resources PLC  13 December 2024

The information contained within this announcement was deemed by the Company
to constitute inside information as stipulated under the UK Market Abuse
Regulation.

 

13 December 2024

 

GCM Resources plc

("GCM" or the "Company")

 

MOU Extension - Phulbari Coal Mine Development

 

GCM Resources plc (AIM: GCM), the AIM traded mining and energy company,
announces that Power Construction Corporation of China, Ltd. ("PowerChina")
has agreed to an extension of the memorandum of understanding ("MoU") for a
period of a further 12 months from 6 December 2024 to 6 December 2025 on the
same terms as the previous memorandum of understanding which is primarily
focused on the Phulbari coal mine development.

 

On 27 November 2018 the Company originally announced the entry into the MoU.
The MoU was previously extended for 12 months from 6 December 2023 to 6
December 2024, details of which were announced by the Company on 28 November
2023.

 

It is acknowledged that working under the MOU the parties have already taken a
significant step towards developing the Phulbari coal mine. This is
demonstrated by the signing of an EPC contract for "Phulbari Coal Mining
Infrastructure Construction and Overburden Stripping", which was announced by
the Company on 11 March 2024. The scope of work under this contract includes
design, procurement, installation and commissioning of mine infrastructure and
overburden removal, dewatering and drainage. It also includes selective mining
and stockpiling of valuable industrial mineral co-products that occur in the
overburden and are expected to deliver considerable cashflow for the Project
ahead of any coal extraction.  Importantly, the proposed mine development is
now heading in the direction of contract mining which means that the mining is
carried out by an experienced mining contractor utilising their own resources
and mining equipment resulting in reduced technical risk and start-up capital
expenditure requirement.

 

Working under this extended MOU, GCM and PowerChina aim to determine the
modality for PowerChina to become involved in other packages of work and
financing that are necessary to fully develop the Phulbari coal mine.
PowerChina's involvement as a Mine Development Partner remains subject to the
approval of PowerChina internal compliance and all other relevant regulatory
agencies.

 

Over the past decade, Bangladesh has experienced considerable expansion of its
power generating capacity.  However, it did so by relying on imported fuel
and not promoting extraction of its domestic coal and gas resources.
Bangladesh's installed coal-fired power capacity currently stands at over
8,000MW (commissioned and soon to be commissioned). This represents an
investment of some US$20 to 30 billion, predominantly in the latest High
Efficiency - Low Emission (HELE) ultra-supercritical coal fired power plant
technology with an annual coal supply demand of some 19 million tonnes of coal
of the quality of the Phulbari reserves.  GCM remains confident that by
developing the proposed Phulbari coal mine, the Country will take a
significant step away from an almost total dependance on expensive imported
energy.

 

Michael Tang, Chief Executive of GCM, commented: "Working under the MOU, GCM
and PowerChina will have the opportunity to finalise the remaining work
packages necessary to bring the Phulbari coal mine into production. It also
further strengthens our working relationship and demonstrates our ability to
bring the Project to fruition. Having PowerChina as our Development Partner
will greatly assist with obtaining the necessary Government approval and
demonstrating that the proposed Phulbari coal mine will provide a large
reliable supply of affordable commercial energy that will reduce the Country's
dependance on expensive imported energy products."

 

 

 

For further information please contact:

 

 GCM Resources plc                    Tel: +44 (0) 20 7290 1630

 Keith Fulton, Finance Director       info@gcmplc.com

                                      www.gcmplc.com (http://www.gcmplc.com)

 Allenby Capital Limited              Tel: +44 (0)20 3328 5656

 Nominated Adviser and Joint Broker   info@allenbycapital.com (mailto:info@allenbycapital.com)

 John Depasquale / Vivek Bhardwaj

 Axis Capital Markets Limited         Tel: +44 (0) 203 026 0320

 Joint Broker

 Ben Tadd / Lewis Jones

 

 

About GCM Resources plc

 

GCM Resources plc (LON: GCM), the AIM listed mining and energy company, has
identified a high-quality coal resource of 572 million tonnes (JORC 2004
compliant) at the Phulbari Coal and Power Project (the "Project") in
north-west Bangladesh.

 

Utilising the latest highly energy efficient power generating technology the
Phulbari coal mine can support some 6,600MW. GCM requires approval from the
Government of Bangladesh in order to develop the Project. The Company has a
strategy of linking the Company's mine proposal to supplying coal to the
Government of Bangladesh's existing and in the pipeline coal-fired power
plants and / or power plants developed development partners. Together with
credible, internationally recognised strategic development partners, GCM aims
to deliver a practical power solution to provide the cheapest coal-fired
electricity in the country, in a manner amenable to the Government of
Bangladesh.

 

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