LONDON - GCM Resources plc (AIM: GCM), the mining and energy company listed on the AIM market of the London Stock Exchange (LON:LSEG), has renewed its consulting agreement with Dyani Corporation, Ltd. and will issue new shares as part of the compensation. The renewed agreement, which was initially extended on June 29, 2020, and expired on June 30, 2022, will continue until December 31, 2025.
The agreement aims to further GCM's partnership with Power Construction Corporation of China, Ltd. ("PowerChina"), which is vital for the company's credibility with the Government of Bangladesh and the operation of the Phulbari Coal and Power Project. Dyani's role includes promoting the project, facilitating project approval, and identifying additional business opportunities.
Under the terms of the new agreement, Dyani will receive a monthly retainer fee backdated from January 1, 2024, payable in new ordinary shares, and success fees in shares upon reaching certain milestones. The success fees include a one-time issuance of shares equivalent to 2% of the company's issued share capital for facilitating the Mine Construction Contract, achieved on March 9, 2024, and another issuance of up to 4% for a complete mining contract, with an announcement to follow upon achievement.
The company will issue 18,922,701 new ordinary shares to Dyani in aggregate, and the issuance is conditional on Dyani's interest remaining below 30% of GCM's issued share capital. There is also a six-month restriction on the sale of shares received under the agreement.
As a result of the new share issuance, Dyani's shareholding will increase to 16.90% of the enlarged share capital upon admission, while other significant shareholders' percentages will adjust accordingly. The company is subject to the City Code on Takeovers and Mergers and has a non-exclusive contract with Dyani, leaving room for strategic partnerships at the company's discretion.
The issue of new shares to Dyani is considered a related party transaction under the AIM Rules for Companies, but the company's directors, with consultation from Allenby Capital Limited, deem the terms fair and reasonable for shareholders.
Admission of the new ordinary shares is anticipated to take effect around January 14, 2025, which will bring the company's total issued ordinary share capital to 295,288,306 shares.
GCM Resources is focused on developing the Phulbari Coal and Power Project in Bangladesh, which is contingent on government approval. The project is expected to support energy-efficient power generation.
This article is based on a press release statement from GCM Resources plc.
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