GCM RESOURCES PLC

Legal Proceedings Report • Sep 27, 2016

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RNS Number : 9825K

GCM Resources PLC

27 September 2016

27th September 2016

GCM Resources plc

("GCM" or the "Company")

(AIM:GCM) 

Press speculation update

GCM Resources plc ("GCM" or the "Company"), a London based resource exploration and development company, is pleased to provide further information in respect to the press speculation announcement on 23 September 2016.

The Company's investigation has found that press speculation in the Bangladesh media of an alleged decision by the Government of Bangladesh ("Government") on the mining method at Barapukuria coal mine was inaccurate and misleading. 

GCM has obtained feedback from sources from within Government and the Bangladesh media which confirms that no decision has been made on whether the Government's Barapukuria Coal Mining Company Limited, which is currently mining coal in the Barapukuria coal basin through underground mining, should adopt the high coal production open pit mining method. In addition it was found that there were no grounds to suggest that the Company's Phulbari Coal Project ("Project") was impacted in any way.

Since the announcement on Friday 23 September 2016, further Bangladesh media articles have accurately reported that a technically orientated progress meeting was held in government circles but no decisions were made regarding mining methods. The Company is deeply concerned regarding the negative impact that unsubstantiated and speculative media reporting can have on its and its stakeholders' image, reputation and financial position and consequently it has instructed its lawyers to issue a legal notice to a media outlet to protect its interests. 

As stated in the Company's announcement on Friday 23 September 2016, GCM through its subsidiary has a legally enforceable contract with the Government of Bangladesh which gives it the right to explore, develop and mine coal in northern Bangladesh.  Under the purview of the aforementioned Contract it successfully explored the Phulbari coal basin and provided the Government with a Scheme of Development, supported by a detailed Environmental and Social Impact Assessment, for developing a high production open pit coal mine.  The Company is awaiting Government approval of the Scheme of Development to proceed with mine development and has received no notification from the Government of any changes that would impact on its Contract and ensuing rights. 

The Company was pleased that Bangladesh's Honourable Prime Minister Sheikh Hasina addressed the nation via television on 27 August 2016 where she displayed pictures and referred to successful open coal mining and associated power generation in Germany's Cologne area.  She shared the successful environmental management of these operations, including water management and stated that communities and wildlife happily lived in close proximity to the mines and power plants.  The Company wishes to note that the Scheme of Development for the Phulbari Coal Project adopts the proven best practices of the Cologne open pit coal mines, which are significantly larger in scale, in respect of water management issues and GCM's international team of advisers included consultants from RWE Cologne.

GCM is confident that a developed Phulbari Coal Project will contribute towards significant long term economic growth and social development by supplying high quality thermal coal for up to 4,000MW of lower cost power while generating many thousands of jobs, and that it is in the best interests of the Government, the nation and the local community that the Project proceed as quickly as possible.

For further information:

GCM Resources plc James Hobson CFO & Company Secretary  +44 (0) 20 7290 1630	Bell Pottinger Greg Wood +44 (0) 20 3772 2500
ZAI Corporate Finance Ltd Nominated Adviser and Broker John Treacy +44 (0) 20 7060 2220

GCM Resources plc
Tel: +44 (0) 20 7290 1630
info@gcmplc.com; www.gcmplc.com

This information is provided by RNS

The company news service from the London Stock Exchange

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