The
information contained within this announcement was deemed by the
Company to constitute inside information as stipulated under the UK
Market Abuse Regulation
8 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 Dyani
Corporation, Ltd. ("Dyani")
(the "Dyani Agreement"), to maintain and develop
the Company's relationship with our key partner, Power Construction
Corporation of China, Ltd. ("PowerChina"), on similar terms as
previously announced. The Dyani Agreement was most recently
extended on 29 June 2020 and expired on 30 June 2022. Details of
the key terms of the Dyani Agreement are set out
below.
Dyani Agreement
Dyani has helped the Company to make
significant progress in developing our partnership with PowerChina.
The previous agreement with Dyani expired on 30 June 2022 and Dyani
has continued to assist GCM. For example, Dyani has played a key
role in the milestone of signing the Phulbari Coal Mining
Infrastructure Construction and Overburden Stripping Contract
("Mine Construction
Contract") which was announced on 11 March 2024 as well as
the extension of the memorandum of understanding ("MoU") announced on 13 December 2024.
While the Company has a strong direct relationship with the
Bangladesh office of PowerChina, Dyani maintains our connections at
the Bangladesh office and the head office level in Beijing. The
strength of this bilateral relationship with PowerChina is crucial
for us to maintain our credibility with the Government of
Bangladesh, and as the operator of such a significant asset as the
Project. Consideration under the Dyani Agreement is payable in new
ordinary shares of 1 pence each in the share capital of the Company
("Ordinary Shares"), which
aligns Dyani's interests with Shareholders and preserves the
Company's cash position while we work for consent to develop the
Project.
Key
terms of the contract
Under the terms of the Dyani
Agreement, which will expire on 31 December 2025, Dyani shall
provide services to assist the Company to:
· Promote the Project; grow its relationship with its key
development partner, PowerChina; facilitate PowerChina's assistance
in achieving project approval from the Government of Bangladesh;
and securing finance necessary to take the Project to the stage of
coal extraction with positive cashflow.
· Identify additional project opportunities that represent
business opportunities for GCM that could be developed as adjuncts
to the Project.
Dyani will receive share-based
success fees on achieving milestones as well as a monthly retainer
fee, as follows:
· A
retainer fee of £25,000 per month backdated from 1 January 2024,
paid quarterly in arrears by the issuance of new 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 Dyani 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 869,061 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 1,377,284
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
2,493,849 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
3,966,575 new Ordinary Shares.
· The
success fees comprise:
o a
one-time fee equal to 2% of Company's issued share capital (the
"ISC") as at 7 January 2025
for facilitating and delivering the Mine Construction Contract (an
initial mine construction EPC Contract with PowerChina), covering
mine infrastructure and initial overburden removal (noting that
this is a sub-set of an all-encompassing Mine Development and
Operations Contract). This was achieved on 9 March 2024 and
accordingly Dyani will be issued with 5,527,312 new Ordinary
Shares.
o a
one-time fee equal to 4% of the ISC at the time of issue for
facilitating and delivering a complete mining contract, covering
all mine development and operational activities necessary to take
the operation through to at least first 8-years of coal production
with associated continuous overburden removal and stockpile
management ("Mine Development and
Operations Contract"). A further announcement will made as
and when this milestone is achieved, and the resultant one-time fee
becomes payable.
· Dyani
will also receive a one-time fee of £85,000 payable by way of
4,688,620 new Ordinary Shares for services, including furthering
the relationship with PowerChina, in the 18-month period prior to 1
January 2024. The number of new Ordinary Shares to be issued in
this respect have been calculated using the 10 day VWAP to 26
November 2024.
Other principal terms under the
Dyani Agreement are as follows:
· Any
new Ordinary Shares issued to Dyani is conditional upon Dyani's
interest, together with the interest of any parties with which it
is acting in concert, remaining below 30% of the Company's
ISC.
· In the
event that Dyani's interest exceeds 25% of the Company's ISC, Dyani
has agreed to enter into a relationship agreement with the
Company.
· With
the exception of the monthly retainer, Dyani is restricted from
disposing of any Ordinary Shares received under the Dyani Agreement
for a period of six months from the date of issue.
· Notwithstanding the milestones as set out above, the total
shares issued under the Dyani Agreement as well as the previous
agreement (announcements dated 18 May 2017, 2 July 2018 and 29 June
2020) will be capped at 45% of the enlarged issued share capital of
the Company. In the event that this occurs, Dyani shall remain
obliged to continue the services, even though no new Ordinary
Shares will be issued. The Company is subject to the City Code on
Takeovers and Mergers.
· Dyani
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, 18,922,701 new Ordinary Shares to Dyani pursuant to
the Dyani Agreement.
Changes to significant shareholdings
As a result of the issue of the new
Ordinary Shares to Dyani, the Company is aware of the following
changes to significant shareholders in the Company on Admission (as
defined below):
|
Name
|
Total Ordinary Shares
currently held
|
Total Ordinary Shares held on
Admission
|
Percentage of enlarged share
capital on Admission
|
|
Dyani Corporation, Ltd.
|
30,993,839
|
49,916,540
|
16.90
|
|
Polo Resources Limited
|
43,328,003
|
43,328,003
|
14.67
|
|
DG Infratech Pte Ltd
|
10,327,270
|
10,327,270
|
3.50
|
Related Party Transaction
Under the AIM Rules for Companies
(the "AIM Rules") Dyani is
a substantial shareholder (with a current shareholding in the
Company of 10.5%). Entering into the Dyani Agreement is therefore
deemed to be a related party transaction pursuant to AIM Rule 13
(together the "Transaction"). Accordingly, for the
purpose of AIM Rule 13, the Directors consider, having consulted
with the Company's nominated adviser, Allenby Capital Limited
("Allenby Capital"), that
the terms of the Transaction are fair and reasonable insofar as the
Company's shareholders are concerned.
Admission and Disclosure Guidance and Transparency Rules
Application has been made to the
London Stock Exchange for, in aggregate, 18,922,701 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 14 January 2025.
Following Admission, the Company's
issued ordinary share capital will comprise 295,288,306 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.
For
further information:
|
GCM
Resources plc
Keith Fulton, Finance
Director
|
Tel: +44 (0) 20 7290 1630
info@gcmplc.com
www.gcmplc.com
|
|
Allenby Capital Limited
Nominated Adviser and Joint
Broker
John Depasquale / Vivek
Bhardwaj
|
Tel: +44 (0)20 3328 5656
info@allenbycapital.com
|
|
Axis Capital Markets Limited
Joint Broker
Ben Tadd / Lewis Jones
|
Tel: +44 (0) 203 026
0320
|
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.