REG - GCM Resources PLC - Renewal of Consulting Agreement and Share Issue

GCM ResourcesAnnouncement

28/01/2025 12:30

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RNS Number : 9899U  GCM Resources PLC  28 January 2025

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

 

28 January 2025

 

GCM Resources plc

("GCM" or the "Company")

 

Renewal of Consulting Agreement and Share Issue

 

GCM Resources plc (AIM: GCM), the AIM traded mining and energy company,
announces that it has agreed a new consulting agreement with DG Infratech Pte
Ltd ("DGI" or the "Consultant") (the "DGI Agreement"), a Bangladeshi
controlled company, to help GCM obtain the consent of the Government of
Bangladesh to develop the proposed coal mine based on the world class high
grade coal resource of 572 million tonnes (JORC 2004 compliant) at the
Phulbari Coal and Power Project in North-West Bangladesh (the "Project"). The
most recent extension of the DGI Agreement was announced on 22 August 2022 and
subsequently expired on 31 December 2023. Details of the key terms of the DGI
Agreement are set out below.

 

DGI Agreement

 

Under the terms of the DGI Agreement, the Consultant shall continue to provide
advisory, management, lobbying and consultancy services in relation to the
affairs of the Company and in doing so will deliver approvals and the
cooperation of necessary stakeholders to develop the Project. In addition, the
scope has now been expanded to also include an adjunct project, a Solar Power
Park of up to 4,500MW capacity installed at the Project site (collectively
referred to as the "Power Projects"). The DGI Agreement will now expire on 31
December 2025.

 

Key terms of the DGI Agreement

 

In return for its services, DGI will receive the following fees:

 

·      A retainer fee of £12,000 per month backdated from 1 January
2024, paid quarterly in arrears by the issuance of new ordinary shares of 1
pence each in the share capital of the Company ("Ordinary Shares") priced at
the 10 trading days volume weighted average price ("VWAP") immediately prior
to the end of the relevant quarter. Accordingly, the following new Ordinary
Shares will be issued to DGI in respect of fees due:

 

o  For the quarter ended 31 March 2024 and using the VWAP of 8.63p for the 10
trading days prior thereto, a resultant issue of 417,149 new Ordinary Shares;

o  For the quarter ended 30 June 2024 and using the VWAP of 5.4455p for the
10 trading days prior thereto, a resultant issue of 661,096 new Ordinary
Shares;

o  For the quarter ended 30 September 2024 and using the VWAP of 3.0074p for
the 10 trading days prior thereto, a resultant issue of 1,197,047 new Ordinary
Shares; and

o  For the quarter ended 31 December 2024 and using the VWAP of 1.8908p for
the 10 trading days prior thereto, a resultant issue of 1,903,956 new Ordinary
Shares.

·      Upon completion of certain key milestones, the Consultant will
also receive share-based success fees as follows:

 

o  Upon written approval of the Phulbari coal mine's Scheme of Development,
the Consultant shall receive a success fee equal to 5% of the issued share
capital of the Company ("ISC") at the time of issue;

o  Upon written approval in respect of each group of the ultra-super critical
thermal power plants of up to 6,000MW in total, located at or near the
proposed Project, divided into Power Plant 1, Power Plant 2 and Power Plant 3
and the Solar Power Park of up to 4,500MW, for which the Consultant shall
receive a success fee in each instance equal to 2% of the ISC at the time of
issue (i.e., up to 6% of the ISC in total); and

o  On commencement of development of the coal mining operation, for which the
Consultant shall receive a success fee equal to 4% of the ISC at the time of
issue.

 

Under the terms of the DGI Agreement, if a success fee becomes payable the
agreement will be extended, with any reasonable amendments to be agreed in the
circumstances at the time, for a further period of 60 months from the date the
success fee becomes payable.

 

Other principal terms under the DGI Agreement are as follows:

·      Any new Ordinary Shares issued to DGI is conditional upon DGI's
interest, together with the interest of any parties with which it is acting in
concert, remaining below 30% of the Company's ISC.

 

·      With the exception of the monthly retainer, DGI is restricted
from disposing of any Ordinary Shares received under the DGI Agreement for a
period of six months from the date of issue.

 

·      DGI is contracted on a non-exclusive basis.

 

·      The entry into any of the agreements with strategic partners is
at the discretion of the Company.

 

Accordingly, the Company will issue, in aggregate, 4,179,248 new Ordinary
Shares to DGI pursuant to the DGI Agreement.

 

Update in relation 3 March 2022 fundraise

 

On 3 March 2022, the Company announced, inter alia, the issue of 41,463,605
new Ordinary Shares at a price of 5.14 pence per new Ordinary Shares to raise
gross proceeds of approximately £2.13 million (the "Fundraise"). The Company
has recently become aware that it erroneously understated the number of new
Ordinary Shares to be admitted to trading on AIM by 249 new Ordinary Shares.
Accordingly, the Company will issue an additional 249 new Ordinary Shares in
relation to the Fundraise.

 

Following the issue of the 4,179,497 new Ordinary Shares, DGI will hold
14,506,518 Ordinary Shares, representing approximately 4.84 per cent. of the
Company's issued share capital.

 

Admission and Disclosure Guidance and Transparency Rules

 

Application has been made to the London Stock Exchange for, in aggregate,
4,179,497 new Ordinary Shares to be admitted to trading on AIM ("Admission").
It is currently anticipated that Admission will become effective and that
dealings in the new Ordinary Shares will commence on AIM at 8.00 a.m. on or
around 3 February 2025.

 

Following Admission, the Company's issued ordinary share capital will comprise
299,467,803 Ordinary Shares with voting right in the Company. As the Company
holds no shares in treasury, with effect from Admission, the above figure may
be used by shareholders as the denominator for the calculations by which they
will determine if they are required to notify their interest, or a change in
the interest, in the share capital of the Company under Chapter 5 of the FCA's
Disclosure Guidance and Transparency Rules as reflected in the Company's
articles of incorporation.

 

 

For further information:

 

 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 traded 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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