GCM Resources Regulatory News (GCM)

16 Dec 2008 11:06



GCM Resources plc

Results of AGM

At the annual general meeting of GCM Resources plc held today, all of the ordinary and special resolutions as set out in the notice of this meeting were duly passed.

The following is the text of the Chairman's statement to the meeting.

Phulbari

The company's principal asset remains the Phulbari Coal Project in Bangladesh to which the Company remains fully committed. As you will be aware, the feasibility study for the project was lodged in late 2005 in accordance with our contract with the Government of Bangladesh but since then the changing political situation has meant that we have yet to receive approval to develop the project. As detailed in the Annual Report, since mid-2007 the Coal Policy has been subject to review and revision by various ministries of the Caretaker Government of Bangladesh but still remains in draft form. More positively the caretaker Government has announced a firm date for elections and these are due to be held on 29th December. These elections have the support of the main political parties and the international community and we look forward to working with a newly elected government with the authority to address the country's acute energy shortage and move the Phulbari Coal Project forward.

The project has continued to attract the attention of non-governmental groups concerned with the social and environmental aspects of the project. We continue to explain that the project will be developed in line with international best practices and we will meet the Equator Principles which reflect the International Finance Corporation's Performance Standards on Social and Environmental Sustainability. 

We are conscious that climate change is a pressing issue for Bangladesh; however the country desperately needs energy to be able to continue on its development path, to continue to reduce poverty and adapt to climate change. 

Energy is central to sustainable development and poverty reduction. Without a substantial increase in electricity generating capacity, Bangladesh, which is one of the poorest countries in the world, will not be able to achieve the economic growth required to meet its Millennium Development Goals.

Although it is for the Government of Bangladesh to determine how the country meets its energy needs, we believe that the coal found at Phulbari will make a significant contribution to the country's energy security and help ensure that people of Bangadesh realise their Human Right to Development.

Other investments

Over the last two years we have made investments in a number of other companies which focus on energy related projects. This is a sector where we have considerable experience and, we believe, some expertise. We have been selective. We have only invested in projects where we perceived there to be value for our shareholders and where we could enhance our investment by applying our experience and expertise. We now have minority shareholdings in Polo Resources, Coal of Africa, Aura Energy and Regent Pacific which gives us exposure to coal projects in South Africa, Mongolia, Indonesia and China and uranium prospects in Sweden and Western Australia. The overall market value of these investments is above the cost we paid, even after the recent market volatility. Each of these companies is advancing its projects - Coal of Africa and Polo have recently announced first production from projects in South Africa and Mongolia respectively and Aura has announced a farm-in agreement on its licences in Sweden. As well as being prospective, these companies generally have significant cash balances. Coal of Africa has around £100 million and Polo and Regent Pacific each have around £50 million.

Cash position

Finally, I turn to our own financial position. Our current cash balances are about £4 million and the market value of our listed investments, which are themselves largely backed by substantial cash balances, is around £10 million. We are comfortable that this is sufficient to meet our needs for the foreseeable future.