A two-year £3 million convertible loan facility for Phulbari Coal Project by UK-based GCM Resources plc, the parent company of Asia Energy Corporation Bangladesh Pty Ltd, may be drawn down as and when required.
The loan agreement signed with a Malaysian-based investor investor Revenue Anchor Sdn Bhd for £3 million.
GCM, the resource exploration and development company, said this in a press release reporting its preliminary results for the year ended on June 30, 2015.
The release said the company will assist in financially supporting GCM`s activities as it continues to pursue approval of the project.
The preliminary announcement was approved by the board of directors of the company on November 24, 2015, said the release issued on wednesday.
The financial information of 2015 has been extracted from the financial statements of GCM Resources plc which will be delivered to the Registrar of Companies in due course, it said.
According to the release, as of June 30, 2015, GCM had drawn down £0.2 million from the convertible loan facility £0.51 million as of November 19, 2015.
GCM has identified a coal resource of 572 million tonnes at the Phulbari Coal Project in north-west Bangladesh.
They are awaiting approval from the Bangladesh government to develop the project.
In the Chairman`s Statement, Michael Tang, executive chairman, said: “The last twelve months have been challenging for the junior mining sector as commodity markets continue to deteriorate and raising new funding has become particularly difficult for any mining company that is not producing.”
“In contrast to the decline in global demand for coal, Bangladesh, where GCM`s operations are located, is expected to see a significant increase in demand for high quality thermal coal in-country as the government continues to restructure the country`s power sector towards coal,” he continued.
Michael also stated: “While achieving approval continues to be a challenge, the board believes that it is in the best interests of all stakeholders that the project is developed.”
The board`s strategy is to present the project to the satisfaction of the government of Bangladesh and to secure an agreement that meets the objectives of both parties, he added.
Understanding the importance of local community support, the company has continued its engagement activities throughout the year, retaining a working relationship with community leaders and understanding the views of local residents from a diverse range of backgrounds, the statement said.
According to the release, the company has met around 2,500 people since it first started its re-engagement activities in late 2012.
Finally, the company saw the successful closure of the OECD examination on September 10, 2015 after a thorough and impartial examination which first started in December 2012, it read.
The company’s financial results reflect focus on keeping costs under control while pursing project approval.
The company incurred a loss of £0.9 million for the year ended June 30, 2015, compared to £1.3 million last financial year and £3.2 million in 2013.
Project related expenditure of £0.6 million for the year was also kept at a minimum £0.8 million in 2014.