GCM Resources extends Polo facility by ?1.2m

(Sharecast News) - Mining and energy company GCM Resources has agreed a £1.2m increase to its existing loan facility of £2.3m with Polo Resources, it announced on Monday.
The AIM-traded firm said that before the amendment, the facility allowed it to borrow up to £2.3m, to be repaid within 90 days upon request and attracting an interest rate of 12% per annum.

As it explained in its annual report for the year ended 30 June, the existing Polo Facility had been fully drawn down.

It said on Monday that the revised terms provided for an increase in the facility amount by £1.2m, up to an aggregate of £3.5m, which could be drawn down by the company in equal quarterly instalments of £0.3m.

As set out in its announcement on 30 November 2018, Polo would have the right to convert the outstanding loan balance and accrued interest to new ordinary shares at a price of 11p per share, within 14 days upon request.

GCM said any issue of new shares to Polo was conditional on its interest, together with the interest of any parties with which it was in concert, remaining below 30% of the company's issued share capital.

All other principal terms of the Polo Facility remained unchanged, the board said in its statement.

"As announced on 13 January, in line with the company's strategy, GCM has agreed the extension of the memorandum of understanding with Power Construction Corporation of China and China Nonferrous Metal Industry's Foreign Engineering and Construction Company, for three months," the board explained in its statement.

"On the same date, the company announced the agreed extension of the joint venture agreement and definitive engineering, procurement and construction contract with PowerChina, for a further 12 months, to 17 January 2021.

"This increased debt funding will be used by the company in progressing the strategic partnerships for the development of the proposed coal mine as well as for general working capital purposes."

At 1218 GMT, shares in GCM Resources were up 2.25% at 12.27p.