Last checked at 30 Nov 2018 15:29
30 November 2018
GCM Resources plc
("GCM" or the "Company")
(AIM:GCM)
Final Results for the year ended 30 June 2018
GCM Resources plc (LON:GCM), an AIM quoted mining and energy company, is pleased to report its preliminary results for the year ended 30 June 2018.
Highlights:
· GCM is progressing its strategy to secure further strategic partnerships, and then present a holistic power solution to the Government of Bangladesh;
· China Gezhouba Group International Engineering Co Limited (CGGC) completed a technical pre-feasibility study with respect to a proposed 2,000MW mine-mouth power plant;
· a Joint Development Framework Agreement and Contract Framework Agreement was agreed with CGGC;
· Power Construction Corporation of China Ltd (POWERCHINA) completed a technical prefeasibility assessment on power plants generating 4,000MW;
· A Memorandum of Understanding (MOU) was agreed with POWERCHINA in relation to power plants generating 4,000MW;
· The Company is in discussions with a number of potential partners in relation to mine development;
· Incurred £4.5 million in non-cash costs relating to power plant pre-development expenditure;
· GCM recorded a loss of £5.4 million for the year ended 30 June 2018 (2017: £1.0 million)
The Annual Report and Accounts for the year ended 30 June 2018 will be posted on the Company's website today (www.gcmplc.com) and will shortly be mailed to shareholders. Copies will also be available on request from the Company.
In the Chairman's Statement Datuk Michael Tang PJN, Executive Chairman, stated:
The Company has expanded its strategy to develop a total of 6,000MW in conjunction with the proposed coal mine in North-West Bangladesh (the Project). 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.
Our mission is to become an impact project for the people of Bangladesh, providing the cheapest electricity in the country, which we believe will be attractive to the Government and in line with their goals and objectives. Our proposal will entail us becoming a substantial contributor to the development and progress of Bangladesh if approved.
During the year we continued to strengthen the strategic relationship with China Gezhouba Group International Engineering Co Limited (CGGC) by agreeing a Joint Development Framework Agreement and a Contract Framework Agreement. These agreements have effectively secured the strategic partnership and define the broad roles and responsibilities of each party in the construction of an initial 2,000MW mine-mouth power plant.
CGGC is the main international operating entity of both China Gezhouba Group Corporation and China Energy Engineering Co. Ltd (Energy China). Energy China is a super central state-owned enterprise, and in 2017 ranked 312th in the Fortune Global 500. In the last three years, Energy China engaged in the design and construction of power plants with a total installed capacity of nearly 220GW, ranked first in the world.
We were also honoured to have received interest from Power Construction Corporation of China Ltd (POWERCHINA), who after completing a technical prefeasibility study on mine mouth power plants generating up to a further 4,000MW, agreed a Memorandum of Understanding (MOU) on 27 November 2018. The MOU sets out the steps towards a future Joint Development Agreement, obtaining approval from the Government of Bangladesh and subsequent development of both the mine and power plants generating 4,000MW.
POWERCHINA is a state-owned key enterprise of People's Republic of China, and is a world-leading integrated engineering construction group. In 2018, POWERCHINA ranked 182nd among Fortune Global 500, 41st among Top 500 Enterprises of China, came 6th in the list of the world's 250 largest global contractors and placed 2nd among top 150 engineering design companies worldwide according to Engineering News Report.
The Group recorded a loss of £5.4 million for the year ended 30 June 2018 (2017: £1.0 million). The increase in loss was principally due to non-cash expenditure of £4.5 million relating to power plant pre-development expenditure, comprising of shares issued in lieu of services provided for progressing relationships with strategic partners. Capitalised project related expenditure for the year ended 30 June 2018 amounted to £0.5 million (2017: £1.8 million).
Looking forward, 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.
The Income Statement, Statement of Comprehensive Income, Statement of Changes in Equity, Balance Sheet and Cash Flow are presented on the following pages:
Consolidated Statement of Comprehensive Income
For year ended 30 June
2018 | 2017 | ||
£000 | £000 | ||
Operating expenses | |||
Pre-development expenditure | (4,515) | - | |
Exploration and evaluation costs | (44) | (53) | |
Administrative expenses | (601) | (654) | |
Operating loss | (5,160) | (707) | |
Finance costs | (191) | (299) | |
Loss before tax | (5,351) | (1,006) | |
Taxation | - | - | |
Loss for the year | (5,351) | (1,006) | |
Other comprehensive income | - | - | |
Total comprehensive income for the year | (5,351) | (1,006) | |
Loss per share | |||
Basic (pence per share) | (6.1p) | (1.6p) | |
Diluted (pence per share) | (6.1p) | (1.6p) |
Consolidated Statement of Changes in Equity
For year ended 30 June
| Share capital | Share premium account | Share based payments not settled | Convertible loan equity component | Accumulated losses | Total |
£000 | £000 | £000 | £000 | £000 | £000 | |
Balance at 1 July 2016 | 6,286 | 45,286 | 609 | 169 | (15,352) | 36,998 |
Total comprehensive loss | - | - | - | - | (1,006) | (1,006) |
Share issues | 1,529 | 879 | - | - | - | 2,408 |
Share based payments | - | - | 9 | - | - | 9 |
Transfer of convertible loan equity component on share issue | - | - | - | (169) | 169 | - |
Balance at 30 June 2017 | 7,815 | 46,165 | 618 | - | (16,189) | 38,409 |
Total comprehensive loss | - | - | - | - | (5,351) | (5,351) |
Share issuances (net of costs) | 1,996 | 4,319 | - | - | - | 6,315 |
Share based payments | - | - | 7 | - | - | 7 |
Balance at 30 June 2018 | 9,811 | 50,484 | 625 | - | (21,540) | 39,380 |
Consolidated Balance Sheet
As at 30 June
2018 | 2017 | ||
£000 | £000 | ||
Current assets | |||
Cash and cash equivalents | 446 | 180 | |
Other receivables | 37 | 52 | |
Total current assets | 483 | 232 | |
Non-current assets | |||
Property, plant and equipment | 23 | 27 | |
Intangible assets | 40,637 | 40,179 | |
Total non-current assets | 40,660 | 40,206 | |
Total assets | 41,143 | 40,438 | |
Current liabilities | |||
Payables | (484) | (1,028) | |
Borrowings | (1,279) | (1,001) | |
Total current liabilities | (1,763) | (2,029) | |
Total liabilities | (1,763) | (2,029) | |
Net assets | 39,380 | 38,409 | |
Equity | |||
Share capital | 9,811 | 7,815 | |
Share premium account | 50,484 | 46,165 | |
Other reserves | 625 | 618 | |
Accumulated losses | (21,540) | (16,189) | |
Total equity | 39,380 | 38,409 |
Consolidated Cash Flow Statement
For year ended 30 June
2018 | 2017 | ||
£000 | £000 | ||
Cash flows from/(used in) operating activities | |||
(Loss) before tax | (5,351) | (1,006) | |
Adjusted for: | |||
Pre-development expenditure | 4,515 | - | |
Finance costs | 191 | 299 | |
Other non-cash expenses | - | 50 | |
(645) | (657) | ||
Movements in working capital: | |||
Decrease/(increase) in operating receivables | 10 | (6) | |
(Decrease)/increase in operating payables | (515) | 280 | |
Cash used in operations | (1,150) | (383) | |
Net cash used in operating activities | (1,150) | (383) | |
Cash flows from/(used in) investing activities | |||
Payments for property, plant and equipment | (1) | (4) | |
Payments for intangible assets | (470) | (477) | |
Net cash generated from/(used in) investing activities | (471) | (481) | |
Cash flows from/(used in) financing activities | |||
Issue of ordinary share capital | 2,000 | - | |
Share issue costs | (200) | - | |
Proceeds from borrowing | 150 | 850 | |
Interest paid | 63 | - | |
Net cash from financing activities | 1,887 | 850 | |
Total increase in cash and cash equivalents | 266 | (14) | |
Cash and cash equivalents at the start of the year | 180 | 194 | |
Cash and cash equivalents at the end of the year | 446 | 180 | |
The audited financial information for the years ended 30 June 2018 and 30 June 2017 contained in this document does not constitute statutory accounts as defined in the Companies Act 2006. The comparative financial information is based on the statutory accounts for the financial year ended 30 June 2017. Those accounts, upon which the auditors issued an unqualified opinion with emphasis of matter paragraphs, have been delivered to the Registrar of Companies. The financial information for the year ended 30 June 2018 has been extracted from the financial statements of GCM Resources plc which will be delivered to the Registrar of Companies in due course. The auditors have issued an unqualified opinion with an emphasis of matter paragraph on the Group's statutory financial statements for the year ended 30 June 2018. The emphasis of matter paragraph is in relation to going concern. The preliminary announcement was approved by the Board of Directors on 30 November 2018.
This announcement contains inside information as defined in Article 7 of the EU Market Abuse Regulation No 596/2014 and has been announced in accordance with the Company's obligations under Article 17 of that Regulation.
For further information:
GCM Resources plc James Hobson Finance Director +44 (0) 20 7290 1630
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Northland Capital Partners Ltd Nominated Adviser and Broker Matthew Johnson Jamie Spotswood +44 (0) 20 3861 6625 |
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GCM Resources plc | |||
Tel: +44 (0) 20 7290 1630 | |||
info@gcmplc.com; www.gcmplc.com | |||
About GCM Resources
GCM Resources plc (LON:GCM), the AIM listed 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 is capable of supporting power plants of up to 6,000MW. GCM is awaiting approval from the Government of Bangladesh to develop the Project. The Company has a strategy of combining the Company's mine proposal with up to 6,000MW of power generation, together with credible, internationally recognised strategic partners. GCM aims to deliver a practical power solution to provide the cheapest electricity in the country, in a manner amenable to the Government of Bangladesh.