REG - GCM Resources PLC - Project Update and Extended Consultancy Agreement

GCM ResourcesAnnouncement

22/08/2022 13:30

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220822:nRSV8089Wa&default-theme=true

RNS Number : 8089W  GCM Resources PLC  22 August 2022

22 August 2022

 

GCM Resources plc

("GCM" or the "Company")

(AIM:GCM)

 

Project Update and Extension of Consultancy Agreement

 

GCM Resources plc, an AIM quoted mining and energy company, provides a project
update and, announces that, further to its announcement of 4 September 2019,
it has agreed a further extension of the consultancy agreement (the
"Consultancy Agreement") with DG Infratech Pte Ltd, a Bangladeshi controlled
company ("DGI" or the "Consultant"), for an additional two years, on similar
terms as previously announced. Details of the key terms of the extended
Agreement are set out at the conclusion of this announcement.

 

 

Principal terms of the Consultancy Agreement:

Under the terms of the Consultancy Agreement, the Consultant shall continue to
provide the Company with advisory, management, lobbying and consultancy
services in relation to the Company's business, namely to achieve the approval
for and development of the Coal Project and the Power Projects, and in thus
doing so to deliver approvals and the necessary cooperation from all
stakeholders to develop the Coal Project and the Power Projects.

 

In return for its services, the Consultant shall receive the following fees:

 

-       A monthly retainer of £15,000 from 1 January 2022, payable
quarterly in arrears by the issuance of 363,636 new ordinary shares of 1 pence
each in the capital of the Company ("New Ordinary Shares") at 4.125 pence per
share, with no other financial payments nor reimbursement of expenses, unless
agreed by the Company in advance.

 

-       Upon completion of certain key milestones, the Consultant will
receive share-based success fees in lieu of any cash payment. The milestones
and related payments are as follows:

o    receipt of the written approval of the Coal Project's Scheme of
Development, for which the Consultant shall receive a success fee equal to 5%
of the issued capital of the Company at the time of issue;

o    receipt of the written approval in respect of each group of the Power
Plants, for which the Consultant shall receive a success fee equal to 2% of
the issued capital of the Company at the time of issue (i.e., up to 6% in
total); and

o    commencement of development of the Coal Project, for which the
Consultant shall receive a success fee equal to 4% of the issued capital of
the Company at the time of issue.

 

With the exception of the monthly retainer, the Consultant will be restricted
from disposing of any New Ordinary Shares received under the consulting
agreement for a period of six months from issue.

 

Each milestone specified in the Consultancy Agreement represents a significant
step towards developing the proposed multi-billion dollar Coal Project and
Power Project.

 

The Board is acutely aware of the potential dilution arising from the
Consultancy Agreement.  However, in the opinion of the Company, the value of
the services provided by the Consultant is expected to significantly exceed
the fees incurred if successful.  Accordingly, the Board has concluded that
entering into the Consultancy Agreement is beneficial for GCM and in the best
interests of the Company's shareholders as a whole.

 

Project Update:

 

Developing countries that are largely dependent on imported fuels began to
experience financial strain brought on by the vagaries of the international
energy market as the industrial world recovered from the COVID Pandemic.  The
Ukraine situation has dramatically escalated energy supply and cost problems
and the situation is likely to remain protracted.  GCM's proposed Phulbari
Coal and Power Project would, in the view of the Board, enable the Government
and People of Bangladesh the opportunity to circumvent some of the impacts of
the world energy market turmoil by utilising its own energy resource in the
Phulbari Coal Basin.  The annual savings for Bangladesh in terms of coal
price compared to imported options and Foreign Exchange Reserves would in the
view of the Board be very significant.  Additional benefits may include large
scale solar power development in parallel with coal mining and potentially a
reduction in greenhouse gases due to Phulbari coal being higher energy than
imported coal, meaning less coal being consumed per kilowatt-hour of
electrical energy production and the need to ship coal thousands of kilometres
from overseas mines is avoided.  The Bangladesh Government is reporting
difficulties, particularly with cost, in importing coal and gas for power
plants.  GCM has opened up discussions with Government representatives to
establish a modality for progressing the Project.

 

 

GCM's Chief Executive Officer, Datuk Michael Tang PJN, stated:

"I am delighted to continue to engage the services of DG Infratech and look forward to working with them to drive significant progress in pursuit of our goals."

 

"Our primary objective remains to deliver an impact project for the people of
Bangladesh, providing low cost and sustainable electricity in the country.
We have explored options with our international development partners and
believe the entire Phulbari Geologic Basin should be declared an "Energy Park"
of national significance for Bangladesh. It is rich in natural energy
resources and power generating potentials, capable of supporting over 4,500MW
Solar Power and over 6,600MW thermal power, and in parallel potentially
producing significant volumes of valuable industrial mineral co-products from
the overburden material removed to access the coal."

 

"The Company's economic interests and DG Infratech's are aligned: to achieve
successful progression of the proposed Phulbari Coal and Power Project with
its enabled Energy Park. I am confident that the Consultancy Agreement will
assist the Company unlock significant value for our shareholders in time to
come."

 

 

 

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No596/2014 which is part of UK law by virtue
of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the
publication of this announcement via a Regulatory Information Service, this
inside information is now considered to be in the public domain.

 

 

For further information:

 GCM Resources plc                                        WH Ireland Ltd

 Keith Fulton                                             James Joyce

 Finance Director                                         Andrew De Andrade

 +44 (0) 20 7290 1630                                     +44 (0) 20 7220 1666

 GCM Resources plc
 Tel: +44 (0) 20 7290 1630
 info@gcmplc.com; www.gcmplc.com (http://www.gcmplc.com)

 

 

About GCM Resources

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 is capable of supporting over 6,000MW power generation. GCM
is awaiting approval from the Government of Bangladesh to develop the Project.
The Company, together with credible, internationally recognised strategic
partners, has a strategy of positioning its proposed coal to supply power
plants at the mine-mouth and other coal-fired power projects in Bangladesh.
GCM aims to deliver a practical power solution to provide the cheapest
electricity in the country, in a manner amenable to the Government of
Bangladesh.

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDMZGZRZZLGZZM