GCM Resources Strengthens Partnership with Dyani Corporation

GCM Resources Enhances Agreement with Dyani Corporation

GCM Resources plc (AIM: GCM) is paving the way for growth in the mining and energy sector through its renewed consulting agreement with Dyani Corporation, Ltd. This agreement is pivotal for the company's operations and ambitions, particularly connected to the Phulbari Coal and Power Project in Bangladesh.

Renewed Consulting Agreement Details

The updated terms of the consulting agreement with Dyani Corporation, which originally began in 2020, will now run until the end of 2025. This continued partnership is set to play a significant role in enhancing the credibility of GCM Resources with the Bangladeshi government and in advancing the Phulbari project.

Importance of Dyani's Role

Dyani Corporation’s contributions are vital. Their responsibilities include promoting the Phulbari Coal and Power Project, facilitating the necessary approvals, and identifying further business opportunities. These efforts are in collaboration with Power Construction Corporation of China, Ltd. (or PowerChina), which significantly enhances GCM's project credibility.

New Share Issuance as Compensation

As part of the renewed agreement, Dyani will receive a monthly retainer, effective from January 1, 2024. Compensation will be paid in the form of new ordinary shares. Additionally, performance-based success fees will be issued upon reaching specific milestones aimed at advancing the project.

Milestone-Based Success Fees

Success fees include a significant one-time share issuance of 2% of GCM Resources' total issued share capital upon the facilitation of the Mine Construction Contract, expected to occur around March 2024. An additional fee of up to 4% will be issued once a complete mining contract is secured, with further announcements to follow.

Impact on Shareholding Structure

The issuance will result in 18,922,701 new ordinary shares allocated to Dyani. Importantly, Dyani's holding will remain below 30% of GCM's total share capital, ensuring regulatory compliance. The shares come with a six-month restriction on sales, ensuring stability in the newly adjusted share structure.

Adjustment of Shareholder Percentages

Following this issuance, Dyani’s stake in GCM Resources is anticipated to rise to approximately 16.90%, leading to adjustments for existing shareholders. This shift underlines the dynamic nature of GCM's governance structures and ongoing projects.

Regulatory Considerations and Fairness of Terms

This share issuance aligns with the AIM Rules for Companies as a related party transaction. The directors at GCM have taken steps to ensure that the terms are fair and beneficial to shareholders, with insights from financial advisers like Allenby Capital Limited.

Looking Forward: The Phulbari Project

GCM Resources is committed to advancing the Phulbari Coal and Power Project, which is crucial for energy production efficiency in the region. The project awaits government approval, but it promises to be a game-changer for energy generation.

Frequently Asked Questions

What is GCM Resources' renewed agreement with Dyani Corporation?

The agreement extends the consulting relationship between GCM Resources and Dyani Corporation, focusing on the Phulbari Coal and Power Project.

How will GCM compensate Dyani Corporation?

Dyani will receive a monthly retainer in ordinary shares, along with success fees tied to specific project milestones.

What percentage of shares will Dyani own after the new issuance?

Dyani is expected to hold approximately 16.90% of GCM Resources' enlarged share capital following the new issuance.

What does the success fee entail?

It includes a 2% share issuance for facilitating the Mine Construction Contract and up to 4% for a complete mining contract.

What is the significance of the Phulbari project?

The Phulbari Coal and Power Project aims to enhance energy-efficient power generation in Bangladesh, awaiting vital government approvals.

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