MOU with NFC and PowerChina

RNS Number : 2195F

GCM Resources PLC

11 July 2019

 

11 July 2019

GCM Resources plc

("GCM" or the "Company")

(AIM:GCM) 

MOU with China Nonferrous Metal Industry's Foreign Engineering and Construction Co., Ltd. and Power Construction Corporation of China, Ltd.

GCM Resources plc ("GCM" or the "Company"), an AIM quoted mining and energy company, is pleased to announce that it has entered into a memorandum of understanding ("MOU") with China Nonferrous Metal Industry's Foreign Engineering and Construction Co., Ltd. ("NFC") and Power Construction Corporation of China, Ltd. ("PowerChina").

The MOU provides for the formation of a strategic partnership to jointly develop the Company's proposed 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").

Under the MOU, the parties have agreed to the following salient terms:

·      Parties shall further the strategic partnership by working towards a mutually agreed business relationship to develop, finance, operate and manage the Project, with roles and responsibilities to be defined;

·      Jointly pursue the necessary approvals for the Phulbari Coal Project from the Government of Bangladesh;

·      NFC and PowerChina shall endeavour to procure the auspices of the Government of the People's Republic of China to facilitate the Project under its One Road, One Belt Initiative;

·      Parties shall conclude their negotiations of the necessary agreements as soon as possible, including but not limited to a Framework Agreement and Joint Development Agreement; and

·      The MOU shall be valid for six months, but may be extended by mutual agreement.

NFC, a People's Republic of China, central state-owned enterprise, was founded in 1983 and was listed on the Shenzhen Stock Exchange in 1997 (SZSE: NFC). NFC is involved in non-ferrous mineral resources development, engineering contracting, equipment manufacturing, and related trading and services, both in the People's Republic of China and globally, for over three decades and is ranked 85^th amongst the Top 250 International Contractors by Engineering News Record 2018.

PowerChina, a People's Republic of China, central state-owned enterprise and world leading engineering, construction and operation corporation, carries out various businesses including the field of international project contracting in energy and energy investment and financing, including in energy industries. PowerChina is ranked 10^th amongst the Top 250 International Contractors by Engineering News Record 2018.

The Executive Chairman of GCM, Datuk Michael Tang PJN, stated:

"The MOU with China Nonferrous Metal and PowerChina to develop the proposed coal mine is an important milestone in the Project's development. Our strategy is to become an impact project for the people of Bangladesh, providing low cost and sustainable electricity in the country, by combining the Company's coal mine proposal with mine mouth power plants generating 6,000MW. Both NFC and PowerChina are highly respected global companies, and in becoming strategic partners to the Company's Project, will, in the Board's view, add tremendous strength and credibility to our proposal. 

I would like to thank the teams at NFC and PowerChina for their interest and support, and we look forward to working together with them to strengthen the relationship we have built, and by developing the Phulbari Coal and Power Project, to deliver substantial benefits for the Government and the people of Bangladesh as well as our stakeholders."   

In relation to the formal proposal to the Government of Bangladesh, the Company and PowerChina are looking forward to working with NFC to finalise this in due course. A further announcement may be made when appropriate.

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 Keith Fulton Finance Director [phone]	Strand Hanson Limited Nominated Adviser and Broker Stuart Faulkner 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 low cost electricity in the country, in a manner amenable to the Government of Bangladesh.

 

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