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):

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.

For further information:

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.