GCM Resources Shares Fall As Pre-Production Costs Widens Interim Loss

LONDON (Alliance News) - GCM Resources said on Thursday its pretax loss widened in the first half of its financial year due to a substantial rise in operating costs.

Shares in GCM Resources closed down 27% at 23.40 pence on Thursday.

The resource exploration and development company reported a pretax loss of GBP1.9 million for the six months to the end of December, widened from GBP399,000 for the same period the year before due to a one-off expenditure on pre-production, mainly through consultancy success fees for a proposed coal fired power plant of up to 2,000 megawatts.

GCM generated no revenue for the period.

The company said its focus for the six month period was strengthening its relationship with partner China Gezhouba Group International Engineering Co Ltd, for the progression of the Phulbari Coal and Power Project in Bangladesh.

Post-period, these discussions have led to the signing of several agreements for the investment into and construction of the power plant on the project in March.

"Over the coming months, the GCM team is looking forward to working with CGGC to progress the Project. There are many significant challenges ahead in advancing the joint proposal and achieving the necessary approvals from the Government, which remain a precondition to development. As such the Company will continue to be in discussions with other potential strategic partners who may assist in obtaining necessary approvals, financing and/or mine development," said Chairman Datuk Michael Tang.