Power Plant Consulting Agreement - Update

RNS Number : 2293T

GCM Resources PLC

02 July 2018

 

2 July 2018

GCM Resources plc

("GCM" or the "Company")

(AIM:GCM) 

Power Plant Consulting Agreement - Update

GCM Resources plc ("GCM" or the "Company"), a London based resource exploration and development company, is pleased to provide an update in regards to the consultancy agreement ("Agreement") announced on 18 May 2017 with Dyani Corporation Limited ("Consultant") which expired on 30 June 2018.

The Company advises that discussions are ongoing with the Consultant to either extend or enter into a new agreement subject to achieving satisfactory terms. The intention of such agreement would be to facilitate the advancement of the Company's relationship with China Gezhouba Group International Engineering Co. Ltd ("CGGC") and to solicit further internationally recognised strategic partners for mine development and/or further power plants, and thus significantly enhance the Company's prospects in achieving its objectives. To this end the Consultant has recommended a number of large credible parties who have expressed interest in partnering with GCM.

The Company recognises the valuable contribution made by the Consultant to-date. GCM has achieved a strong strategic partnership with CGGC, for the proposed 2,000MW mine-mouth thermal power plant at GCM's proposed coal mine in North-West Bangladesh ("Power Plant").

CGGC is the main international business company of both China Gezhouba Group Corporation and China Energy Engineering Co. Ltd ("Energy China"), of which both are State Owned Entities of the People's Republic of China. CGGC is a leading implementer of China's 'Belt & Road' Initiative and seeks projects that are in line with this initiative and that promote social progress.

As previously announced, after completing a technical pre-feasibility study on the proposed Power Plant in July 2017, CGGC and GCM have since agreed the roles and responsibilities between the two parties:

·      CGGC has been awarded the right to engineer, procure, construct, and commission ("EPC") the proposed Power Plant, 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 Power Plant.

Datuk Michael Tang PJN, Executive Chairman stated "I would like to express my appreciation for the valuable work undertaken by Dyani Corporation Limited for the benefit of GCM. The CGGC relationship is an important part of a broader strategy of combining the Company's mine proposal with up to 6,000MW of power generation, together with credible, internationally recognised strategic partners, and thus delivering a practical power solution that is amenable to the Government of Bangladesh."

For further information:

GCM Resources plc James Hobson Finance Director  [phone]	Northland Capital Partners Ltd Nominated Adviser and Broker Tom Price Jamie Spotswood [phone]
GCM Resources plc
Tel: [phone]
[e-mail]; www.gcmplc.com

 

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