continued...22 Mar 2018 16:09
Financials
GCM incurred a loss after tax of �1,902,000 for the six months ended 31 December 2017 (31 December 2016: loss after tax of �399,000), the increase being due to pre-development expenditure of �1,527,000 incurred on the proposed coal fired power plant. The pre-development expenditure comprised mainly of the non-cash cost of �1,407,000 consultancy success fees, which were payable via the issue of the Company's ordinary shares on successfully reaching key milestones regarding the proposed coal fired power plant, in accordance with the consulting agreement announced in May 2017. Reflecting the Company's continued focus on cost management, administrative expenses for the six months ended 31 December 2017 were �290,000 (31 December 2016: �291,000) and capitalised Project expenditure was �183,000, a decrease of �67,000 from the comparative period.
During the period GCM partly funded its operations by drawdowns of �150,000 from the short-term loan facility with Polo Resources Limited, the Company's largest shareholder. The short-term loan facility of �1,100,000 has been fully utilised and attracts an interest rate of 12% per annum with repayment terms of 90 days upon request. In November 2017, the Company successfully raised �1.8 million net of costs via a share placement which allowed both institutional and retail investors to participate. The funds are being used to support GCM's continuing operations and working capital requirements as it pursues its strategy of a joint mine and power plant proposal.
As at 31 December 2017 the Group's financial resources were �1,507,000 and current liabilities were �2,154,000, including �1,214,000 owing to Polo Resources Limited. Over the next six months the Company will be in discussions with parties to seek new investment to strengthen GCM's financial position and provide future funding. Until such time, there remains a material uncertainty which may cast doubt as to the Group's ability to continue as a going concern. The directors remain confident that sufficient funding will be obtained as and when required. As such the financial statements have been prepared on a going concern basis. Please refer to the accounting policy note on going concern for further information.
Outlook
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.
I would like to express my appreciation to our shareholders for their ongoing confidence and support. I would also like to thank the Bo
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