GCM Resources PLC Increase in Polo Facility to £3.5 million (7143B)

TIDMGCM

RNS Number : 7143B

GCM Resources PLC

03 February 2020

3 February 2020

GCM Resources plc

("GCM" or the "Company")

Increase in Polo Facility to GBP3.5 million

GCM Resources plc (LON:GCM), an AIM quoted mining and energy company, is pleased to announce that it has agreed a GBP1.2 million increase to its existing loan facility of GBP2.3 million with Polo Resources Limited (AIM: POL) ("Polo") (the "Polo Facility").

Prior to this amendment, the Polo Facility allowed the Company to borrow up to GBP2.3 million, to be repaid within 90 days upon request and attracting an interest rate of 12% per annum. As set out in the Company's Annual Report and Accounts for the year ended 30 June 2019, the existing Polo Facility had been fully drawn down. The revised terms provide for an increase in the Polo Facility amount by GBP1.2 million (up to an aggregate of GBP3.5 million), which can be drawn down by the Company in equal quarterly instalments of GBP300,000. As set out in the Company's announcement, of 30 November 2018, Polo will have the right to convert the outstanding loan balance and accrued interest to new ordinary shares of 10p each in the Company's capital ("Ordinary Shares") at a price of 11p per share, within 14 days upon request. Any issue of new Ordinary Shares to the Polo is conditional upon its interest, together with the interest of any parties with which it is in concert, remaining below 30% of the Company's issued share capital. All other principal terms of the Polo Facility remain unchanged.

Use of funds

As announced on 13 January 2020, in-line with the Company's strategy, GCM has agreed the extension of the Memorandum of Understanding ("MOU") with Power Construction Corporation of China, Ltd and China Nonferrous Metal Industry's Foreign Engineering and Construction Co., Ltd. for three months. On the same date, the Company announced the agreed the extension of the Joint Venture Agreement ("JVA") and definitive Engineering, Procurement and Construction Contract ("EPC Contract") with PowerChina, for a further 12 months, to 17 January 2021.

This increased debt funding will be used by the Company in progressing the strategic partnerships for the development of the proposed coal mine as well as for general working capital purposes.

Related Party Transaction

As Polo is currently a substantial shareholder of the Company, the increase in the Polo Facility is deemed to be a related party transaction for the purposes of Rule 13 of the AIM Rules. The independent directors, being Mohd Najib Bin Abdul Aziz and Keith Fulton, consider, having consulted with the Company's nominated adviser, Strand Hanson Limited, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

2019 Annual General Meeting ("AGM")

As announced on 18 December 2019, it was the Company's intention to hold the AGM before 29 February 2020. The Company regrets to advise its AGM has been further delayed and confirms that the Board's current intention is to send out a notice of AGM, to be held before 31 March 2020, shortly.

This announcement contains inside information as defined in Article 7 of the EU Market Abuse Regulation No 596/2014 and has been announced in accordance with the Company's obligations under Article 17 of that Regulation.

For further information:

 
 
   GCM Resources plc              Strand Hanson Limited 
   Keith Fulton                   Nominated Adviser and Broker 
   Finance Director               Stuart Faulkner 
   [phone]           Rory Murphy 
                                  James Dance 
                                  [phone] 
 
 GCM Resources plc 
 Tel: [phone] 
 [e-mail]; 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 power plants of up to 6,000MW. GCM is awaiting approval from the Government of Bangladesh to develop the Project. The Company has a strategy of combining the Company's mine proposal with up to 6,000MW of power generation, together with credible, internationally recognised strategic partners. 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 [e-mail] or visit www.rns.com.

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February 03, 2020 03:30 ET (08:30 GMT)