GCM pre-tax loss widens

GCM Resources posts a pre-tax loss of £1,043,000 for the year to the end of June compared with £937,000 in 2015.

Executive chairman Datuk Michael Tang said: "Although the mining sector has continued to face significant challenges over the last twelve months, we remain positive on the potential of the Phulbari Coal and Power Project and are advancing the Company towards realising its objectives.

"The Government of Bangladesh (the Government) continues to execute its strategy of substantially increasing the country's power supply, and has made progress during the year towards meeting its objective of generating over 19,000MW from coal by 2030. The expansion of coal fired power plants is expected to result in a significant increase in demand for high quality thermal coal within the country. GCM is well placed to meet this need.

"Once developed, the Project can supply sufficient high quality thermal coal to support over 4,000MW of power generation for Bangladesh, making a substantial contribution towards the Government's goals. It is also expected to transform the Rangpur Division in north-west Bangladesh, from one of the poorest areas in the country into an economic centre with industries based on the new power supply, the mine and co-industries.

"An estimated 17,000 jobs are expected to be created due to mine development and this figure increases to approximately 50,000 when taking into account the power generation and downstream industries enabled through using the Phulbari's coal and industrial mineral co-products. The Government would also benefit financially, deriving over US$7 billion revenue in the form of royalties, taxes and service charges from a producing Phulbari coal mine over its economic life and the Project would contribute an estimated 1% to GDP.

"While pursuing approval from the Government of Bangladesh to proceed with development, we are negotiating with potential partners to expedite the Project. GCM has agreed a memorandum of understanding with China Gezhouba Group International Engineering Co. Ltd (CGGCINTL) to mutually investigate the feasibility of a joint venture with respect to the development of mine-mouth coal fired power plants generating up to 2,000MW in total at the Phulbari Coal and Power Project site. CGGCINTL has a wealth of experience in major infrastructure projects including developing coal-fired power plants and we are very pleased to partner with them in investigating this opportunity.

"Project implementation will mean substantial investment into the locality and we are committed to ensuring that the Project is developed for the benefit of all stakeholders. During the year the Company continued to engage with the local community, maintaining its relationships and listening to their views.

"The Group incurred a loss of £1,043,000 for the year ended 30 June 2016 which included £340,000 of non-cash expenditure, compared to a loss of £937,000 in the previous financial year. Capitalised Project related expenditure amounted to £655,000 for the year, compared to £579,000 for the comparative year."

At 2:30pm: (LON:GCM) GCM Resources PLC share price was +10.25p at 44.25p