GCM Gcm Resources Plc

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.

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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.