Source - RNS
RNS Number : 3205K
GCM Resources PLC
10 April 2018
 

10 April 2018

 

GCM Resources plc

("GCM" or the "Company")

(AIM:GCM) 

 

Share issue - Consultant

 

GCM Resources plc ("GCM" or the "Company"), a London based resource exploration and development company, announces the issuance of shares as payment of consulting fees in accordance with the consultancy agreement ("Agreement") announced on 18 May 2017 with Dyani Corporation Limited ("Consultant").

 

The Agreement provided that shares would be awarded to the Consultant in the event that certain key milestones were reached with China Gezhouba Group International Engineering Co. Ltd ("CGGC") or a similar large Chinese enterprise. Details of the milestones may be found in the Company's announcement dated 18 May 2017 and in the Company's 2017 Annual Report. In the last month GCM has signed:

·      A Joint Development Framework Agreement with CGGC; and

·      A Contract Framework Agreement with CGGC.

 

The Directors believe these two agreements form a significant advancement in the relationship with CGGC and a positive step towards reaching the Company's goal of an approved Phulbari Coal and Power Project ("Project").

 

When read together:

·      The roles and responsibilities of both the Company and CGGC in pursuing Project approval have been defined;

·      CGGC has been awarded the right to engineer, procure, construct, and commission ("EPC") a proposed 2,000MW mine-mouth thermal power plant at GCM's proposed coal mine in North-West Bangladesh, subject to a definitive EPC contract;

·      CGGC shall procure the financing for the development of the proposed mine mouth power plant with GCM's assistance;

·      CGGC (or its affiliate or investment partner) shall invest up to 30% in the power plant, subject to approval by Chinese authorities; and

·      CGGC shall assist the Company in pursuing the necessary approvals from the Bangladesh authorities for development of both the proposed coal mine and mine mouth power plant.

 

CGGC is the main international business company of both China Gezhouba Group Corporation and China Energy Engineering Co. Ltd ("Energy China"). Energy China is a super central state-owned enterprise, and in 2017 ranked 312th in the Fortune Global 500. In the last three years, Energy China engaged in the design and construction of power plants with a total installed capacity of nearly 220GW, ranked first in the world.

 

As the Joint Development Framework Agreement, and Contract Framework Agreement were key milestones prescribed in the Agreement, and noting the instrumental role played by the Consultant, in accordance with the Agreement the following consulting fees have been paid by the issuance of new ordinary Company shares:

·      For the negotiation and finalisation of the Joint Development Framework Agreement, a success fee equal to 5% of the Company's issued ordinary shares has been awarded to the Consultant, satisfied by the issue of 4,408,783 new ordinary shares. Under the terms of the consulting agreement the shares awarded for the Success Fee cannot be disposed of for a period of six months from the date of issue.

·      For the negotiation and finalisation of the Contract Framework Agreement a further success fee equal to 5% of the Company's issued ordinary shares has been paid to Dyani Corporation Limited ("Consultant") by the issue of 4,629,222 new ordinary shares. Under the terms of the consulting agreement the shares awarded for the Success Fee cannot be disposed of for a period of six months from the date of issue.

·      In addition, GCM has issued 900,000 shares to the Consultant in lieu of the retainer fee for the period 1 July 2017 to 31 March 2018 in accordance with the terms of the consulting agreement. There are no restrictions on disposal of the shares issued in respect of the retainer fee, which is intended to cover the Consultants' costs in performing its services. 

 

 

Application is being made to The London Stock Exchange for these shares, which rank pari passu with the Company's existing issued ordinary shares, to be admitted to AIM. It is expected that admission will become effective on 13 April 2018.  Following admission of these ordinary shares, the Company's enlarged issued share capital will comprise 98,113,655 ordinary shares with voting rights in the Company. As the Company holds no shares in treasury, this is the total number of the voting rights in the Company which 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.

 

GCM confirms that following the share issues announced today, Dyani Corporation Limited and its controlling entities is interested in 19.3 percent of the Company's enlarged issued ordinary share capital.

 

 

 

For further information:

 

GCM Resources plc

James Hobson

Finance Director

 +44 (0) 20 7290 1630

 

 

Northland Capital Partners Ltd

Nominated Adviser and Broker

Tom Price

Jamie Spotswood

+44 (0) 203 861 6625

 



 

GCM Resources plc


Tel: +44 (0) 20 7290 1630


[email protected]; www.gcmplc.com


 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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