GCM Resources PLC Consultancy Agreement (1003L)
September 04 2019 - 2:00AM
UK Regulatory
TIDMGCM
RNS Number : 1003L
GCM Resources PLC
04 September 2019
4 September 2019
GCM Resources plc
("GCM" or the "Company")
(AIM:GCM)
Consultancy Agreement
GCM Resources plc ("GCM" or the "Company"), an AIM quoted mining
and energy company, is pleased to announce that it has entered into
a consultancy agreement (the "Consultancy Agreement") with DG
Infratech Pte Ltd, a Bangladeshi controlled company ("DGI" or the
"Consultant"). The Consultancy Agreement is in relation to the
advancement of 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 "Coal
Project") as well as the Company's proposed 3 x 2,000MW coal fired
mine mouth power plants (the "Power Projects").
Principal terms of the Consultancy Agreement
Under the terms of the Consultancy Agreement, the Consultant
shall provide the Company with advisory, management, lobbying and
consultancy services in relation to the Company's business, namely
to achieve the approval for and development of the Coal Project and
the Power Projects, and in thus doing so to deliver approvals and
the necessary cooperation from all stakeholders to develop the Coal
Project and the Power Projects.
In return for its services, the Consultant shall receive the
following fees:
- A monthly retainer of GBP12,000 from 1 September 2019, payable
quarterly in arrears by the issuance of 66,666 new ordinary shares
of 10 pence each in the capital of the Company ("New Ordinary
Shares") at 18 pence per share, with no other financial payments
nor reimbursement of expenses, unless agreed by the Company in
advance.
- Upon completion of certain key milestones, the Consultant will
receive share-based success fees in lieu of any cash payment. The
milestones and related payments are as follows:
o receipt of the written approval of the Coal Project's Scheme
of Development, for which the Consultant shall receive a success
fee equal to 5% of the issued capital of the Company at the time of
issue;
o receipt of the written approval in respect of each group of
the Power Plants, for which the Consultant shall receive a success
fee equal to 2% of the issued capital of the Company at the time of
issue (i.e. up to 6% in total); and
o commencement of development of the Coal Project, for which the
Consultant shall receive a success fee equal to 4% of the issued
capital of the Company at the time of issue.
With the exception of the monthly retainer, the Consultant will
be restricted from disposing of any New Ordinary Shares received
under the consulting agreement for a period of six months from
issue.
Each milestone specified in the Consultancy Agreement represents
a significant step towards developing the proposed multi-billion
dollar Coal Project and Power Projects.
The Board is acutely aware of the potential dilution arising
from the Consultancy Agreement. The Company is fortunate to have
found a consultant of DGI's calibre which is prepared to be
compensated with New Ordinary Shares, recognising a cash payment
would be beyond the Company's current ability to fund.
By paying the fees through the issue of New Ordinary Shares, the
economic interests of the Consultant are aligned to those of the
Company. The Company incurs little downside in the event that the
milestones are not met and, if the milestones are reached, the
value of the services provided by the Consultant is expected to far
exceed the fees incurred. Accordingly, the Board has concluded that
entering into the Consultancy Agreement is beneficial for GCM and
in the best interests of the Company's shareholders as a whole.
GCM's Executive Chairman, Datuk Michael Tang PJN, stated:
"I am delighted to engage the services of DG Infratech and look
forward to working with them to drive significant progress in
pursuit of our goals.
"Our primary objective remains to deliver 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.
"The economic interests of both DG Infratech and our Company are
aligned: to achieve successful progression of the proposed Coal
Project and Power Plant Projects. I am confident that the
Consultancy Agreement will unlock significant value for our
shareholders in time to come."
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 Strand Hanson Limited
Keith Fulton Nominated Adviser and Broker
Finance Director Stuart Faulkner
+44 (0) 20 7290 1630 Rory Murphy
James Dance
+44 (0) 20 7409 3494
GCM Resources plc
Tel: +44 (0) 20 7290 1630
info@gcmplc.com; 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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