30th Nov 2018 16:56
LONDON (Alliance News) - GCM Resources PLC said Friday its significant investor Polo Resources Ltd has extended its loan to the firm, after it saw annual losses deepen on development costs for its power station project.
For the year ended June, pretax loss widened to GBP5.2 million from GBP707,000 the year prior.
This is after it incurred GBP4.5 million in pre-development expenses associated with its power plant project in Bangaldesh from nothing the year before. These were primarily composed of shares issued in lieu of "services provided for progressing relationships with strategic partners."
GCM does not currently generate any revenue.
"The company has expanded its strategy to develop a total of 6,000 megawatts in conjunction with the proposed coal mine in North-West Bangladesh," Executive Chairman Michael Tang said.
"In order to achieve this our plan is to secure strategic partners for both mine development as well as the development of mine mouth power plants. The company's proposed 6,000MW will make a significant contribution to Bangladesh's needs, which currently is generating approximately 12,000MW, with announced plans to increase to 57,000MW by 2041."
"Looking forward," Tang added, "we hope to secure further strategic partnerships in relation to mine and power development, and then present a holistic power solution to the Government of Bangladesh. We recognise the significant challenges ahead in developing the combined power plant and mine proposal, and achieving the necessary approvals from the Government, the timing of which remains in the hands of the authorities. We are determined to continue adding shareholder value, by pursuing the development of the project to the benefit of shareholders and the Government and people of Bangladesh with an emphasis of improving the well-being of the local communities."
In a separate announcement Friday, GCM announced it had increased its short-term loan facility to GBP2.3 million from GBP1.1 million previously. The facility is provided by London-listed Polo Resources Ltd, which has an 18% stake in GCM.
Polo has the right to convert the loan facility to shares at a price of 11 pence each. Any such conversions must not take its stake above 30%, however.
The GBP1.2 million in additional funds will be drawn in four equal quarterly installments of GBP300,000 each.
GCM will use the funds to support the development of its memorandum of understanding with Power Construction Corp of China Ltd. It will help develop both the coal mine and power station aspects of the project.
Shares in GCM closed 13% higher at 19.56p on Friday, Polo down 7.8% at 3.80p.
Related Shares:
POL.LGCM Resources