GCM Resources Announces MOU Extension - Phulbari Coal Mine Development

Source: www.gulfoilandgas.com 11/28/2023, Location: Asia

GCM Resources plc (GCM), an AIM quoted mining and energy company advises that, further to its announcements of 23 November 2021, June 2021 and 12 December 2022, Power Construction Corporation of China, Ltd. ("PowerChina") it has agreed an extension for a period of a further 12 months from 6 December 2023 to 6 December 2024 on the same terms as the previous memorandum of understanding ("MoU") which is primarily focused on the Phulbari coal mine development. This will allow PowerChina and GCM to continue to work on determining the modality for PowerChina to become a Mine Development Partner, subject to the approval of PowerChina internal compliance and all other relevant regulatory agencies.

Under the MoU, PowerChina and GCM will discuss and negotiate a mutually agreed business relationship to partner each other in developing the proposed coal mine based on the world-class high quality coal resource of 572 million tonnes (JORC 2004 compliant) at the Phulbari Coal and Power Project in North-West Bangladesh (the "Project"). These discussions will cover key areas of finance, project development and mining operations.

It has been reported in Bangladesh that the government is working on new plans for energy supply to feed its diverse range of power plants. The economic pressures, driven largely by the vagaries of the international energy market, appear to be driving a re-focus towards developing domestic energy resources. Bangladesh's currently installed coal-fired power plants of just over 6,000 MW, already can consume virtually all the planned Phulbari coal mine's production and the Government's plan is to double this capacity. GCM remains confident that the Project will help the Country move away from an almost total dependance on expensive imported energy.

Drawdown Request on Existing Polo Resources Ltd Loan Facility
The Company announced on 14 June 2023 that it needed to carry out an additional fundraise before the end of 2023 to fund its working capital into 2024. In relation to the Loan Facility with Polo Resources Ltd ("Polo") as announced on 26 March 2021 and as amended and announced on 3 March 2022, the Company has requested to drawn down a further £300,000 in accordance with the terms announced thereon. The Company will make a further announcement on receipt of the drawdown funds from Polo which would extend its working capital beyond the end of December 2023.

The Company on receipt of this further drawdown will have then utilised the full £3.5million of the £3.5million facility. Funds from this current drawdown request along with existing cash balances would be sufficient to fund the Company through to the end of March 2024.

Michael Tang, Executive Chairman of GCM, commented: "GCM has established a solid working relationship with PowerChina on the Phulbari Coal and Power Project. PowerChina appreciates the enormous benefits that will accrue for Bangladesh and all other stakeholder through the development of the Phulbari coal mine. We are very pleased to report this MOU extension, confirming GCM and PowerChina are continuing to work on forming a partnership for developing the proposed coal mine.

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