Increase in short-term loan facility to £2.3m

RNS Number : 1103J

GCM Resources PLC

30 November 2018

 

30 November 2018

GCM Resources plc

("GCM" or the "Company")

(LON:GCM) 

Increase in short-term loan facility to £2.3 million

GCM Resources plc (LON:GCM), an AIM quoted mining and energy company, is pleased to announce a £1.2 million increase to its existing short-term loan facility of £1.1 million with Polo Resources Limited ("Lender").

Prior to this amendment, the principal terms of the loan were: a loan facility of up to £1.1 million to be repaid within 90 days upon request and attracting an interest rate of 12% per annum.  This existing loan facility has been fully drawn down.  The revised terms provide for an increase in the loan facility amount by £1.2 million, to £2.3 million.  The £1.2 million will be drawn down by the Company in equal quarterly instalments of £300,000.  The Lender will have the right to convert the outstanding loan balance and accrued interest to new ordinary shares of 10p each at a price of 11p per ordinary share within 14 days upon request.  Any share issue to the Lender is conditional upon the Lender's interest, together with the interest of any parties with which it is in concert, remaining below 30% of the Company's issued capital. All other principal terms of the loan facility remain unchanged.

Use of funds

As announced on 26 November 2018, in-line with the Company's strategy, GCM has agreed a Memorandum of Understanding ("MOU") with Power Construction Corporation of China, Ltd. The MOU provides a framework for a future relationship to develop the Company's proposed coal mine as well as power plants generating up to 4,000MW at the mine site.

Under the MOU, the key objectives of the parties include a Joint Development Agreement by 31 December 2018 followed by a joint submission to the Government of Bangladesh, expected by 28 February 2019.  This increased debt funding will be used by the Company in progressing towards these deadlines, to pursue a strategic partner for the development of the proposed coal mine as well as for working capital purposes.

Related Party Transaction

As Polo Resources Limited is currently a substantial shareholder of the Company with a notified holding of 17.8%, the increase in the loan facility is deemed to be a related party transaction for the purposes of Rule 13 of the AIM Rules.  The independent directors, being Nik Raof Daud and James Hobson, consider, having consulted with the Company's nominated adviser, Northland Capital Partners Ltd, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

 

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 James Hobson Finance Director  [phone]	Northland Capital Partners Ltd Nominated Adviser and Broker Matthew Johnson Jamie Spotswood [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.

 

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