17 November 2017

GCM Resources plc

("GCM" or the "Company")

(AIM:GCM) 

Final Results for the year ended 30 June 2017

GCM Resources plc (AIM:GCM), a resource exploration and development company, is pleased to report its preliminary results for the year ended 30 June 2017.

Highlights:

·      GCM is reshaping the Phulbari Coal and Power Project into a holistic power solution, to be in line with the objectives of the Government of Bangladesh;

·      Signed a Memorandum of Understanding with China Gezhouba Group International Engineering Co Limited ("CGGC") with respect to a proposed 2,000MW mine-mouth power plant in November 2016;

·      Received a completed technical pre-feasibility study (PFS) on the proposed power plant from CGGC in July 2017;

·      Discussions with CGGC continue  to agree a joint development framework agreement;

·      GCM recorded a loss of £1.0 million for the year ended 30 June 2017 (2016:  £1.0 million)

The Annual Report and Accounts for the year ended 30 June 2017 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:

"Progress is being made to reposition the Company's mining project into a holistic power solution, in line with the objectives of the Government of Bangladesh (Government), which is to significantly expand power generation in order to support long term economic growth and social development in the country.

"In November 2016 we were very pleased to begin our strategic relationship with China Gezhouba Group International Engineering Co Limited (CGGC) by signing a Memorandum of Understanding (MOU). The MOU enabled the parties to collaborate in a new proposal to construct an initial 2,000MW mine-mouth power plant in conjunction with the Phulbari coal mine.

"CGGC is an internationally recognised engineering company with infrastructure projects across the world. CGGC's businesses cover the design, construction, investment and operation in power, water conservancy, highways, railways, bridges, municipal works, airports, ports, waterways, industrial and civil buildings, as well as real estate and coal mining.

"At the beginning of 2017 CGGC began a technical pre-feasibility study (PFS) on the proposed power plant with the assistance of GCM. This was successfully completed and announced on 14 July 2017.

"We are honoured to be working with the high calibre CGGC team and much encouraged by their interest in further developing the relationship. The parties are currently in discussions to agree a joint development framework agreement which will set out the respective roles and responsibilities, and enable the parties to move forward with the Project.

"By combining the planned coal mine with the proposed 2,000MW mine-mouth power plant in conjunction with CGGC, we are reshaping the Phulbari Coal and Power Project to become an integrated power proposition which we anticipate will be attractive to the Government.

"An additional 2,000MW to the Bangladesh energy grid would make a substantial contribution to the country and assist the Government in meeting its long-term aim of having 57,000 MW of installed power generating capacity by 2041 from a diversified energy sector. The Project could support up to a further 4,000MW at the mine-mouth and/or at other strategic sites within Bangladesh.

"Continuing its focus on minimising costs and conserving cash, the Group recorded a loss of £1.0 million for the year ended 30 June 2017 (2016:  £1.0 million). Capitalised Project related expenditure for the year ended 30 June 2017 amounted to £1.8 million (2016: £0.7 million), which included non-cash expenditure of £1.3 million.

"Looking forward, 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, Bangladesh and 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

Consolidated Statement of Changes in Equity              

Consolidated Balance Sheet

Consolidated Cash Flow Statement

The audited financial information for the years ended 30 June 2017 and 30 June 2016 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 2016. 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 2017 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 2017. The emphasis of matter paragraph is in relation to going concern. The preliminary announcement was approved by the Board of Directors on 17 November 2017.