TIDMPOL
RNS Number : 4105N
Polo Resources Limited
17 January 2019
This announcement contains inside information as defined in
Article 7 of the EU Market Abuse Regulation No 596/2014 and has
been announced in accordance with the Company's obligations under
Article 17 of that Regulation.
17 January 2019
Polo Resources Limited
("Polo" or the "Company")
GCM RESOURCES PLC - INVESTMENT UPDATE
Further agreements with POWERCHINA
Polo Resources Limited (AIM: POL), the multi-sector investment
company with interests in oil, gold, coal, copper, phosphate,
lithium, iron and vanadium, notes that its 17.83% investee company
GCM Resources Plc ("GCM") (AIM: GCM), has announced that it has
agreed a Joint Venture Agreement ("JV Agreement") and a definitive
Engineering, Procurement and Construction Contract ("EPC Contract")
with Power Construction Corporation of China, Ltd ("POWERCHINA")
for the development of 2×1,000MW Coal-Fired Power Plant Project
("Power Plant") at the site of the company's proposed coal mine in
North-West Bangladesh. The Power Plant proposed with POWERCHINA is
part of the company's broader strategy to generate 6,000MW of
low-cost electricity for the Bangladesh market utilising domestic
coal, providing an estimated US$12.5 billion in foreign
investment.
POWERCHINA is a central government owned key enterprise of the
People's Republic of China, and is a world-leading integrated
engineering construction group. In 2018, POWERCHINA ranked 182nd
among the Fortune Global 500, 2nd among the top 150 global
engineering design companies, 41st among the Top 500 Enterprises of
China and 6th among the world's 250 largest global contractors and
according to Engineering News-Report. POWERCHINA has 373 overseas
offices or branches in 116 countries and business operations in 125
countries and regions. POWERCHINA has completed power plants with
242.75GW of installed capacity and has majority ownership of power
plants with 14,402.4MW around the world.
In Bangladesh, POWERCHINA is an investor in and contractor for
three large projects, namely, two coal fired power plants with a
combined capacity of 1,670MW and a joint venture for the Dhaka
Elevated Expressway.
Joint Venture Agreement
Under the terms of the JV Agreement, GCM shall be the lead party
on a newly created joint venture company ("JVC") to own the Power
Plant. Subject to a mutually agreed valuation of the Power Plant
and investment appraisal, the company will be entitled to an 80%
interest in the Power Plant, with POWERCHINA receiving the
remaining 20%. The salient roles and responsibilities of each party
are:
-- GCM shall be responsible for obtaining the necessary
approvals from the Government of Bangladesh and facilitate
preparation of the Environmental Impact Assessment;
-- POWERCHINA shall be responsible for conducting a Feasibility
Study and facilitate the inclusion of the Project as a One Belt,
One Road Initiative of the People's Republic of China; and
-- Both parties shall assist in obtaining financing for the development of the Power Plant.
The JV Agreement has a term of 12 months, with the intention
that it shall be superseded by a definitive shareholder agreement
between the parties, but may be terminated earlier under prescribed
conditions.
Definitive EPC Contract
The EPC Contract awards POWERCHINA exclusive rights for
engineering, procurement and construction of the Power Plant for an
agreed initial cost of US$3.5 billion, subject to any adjustments
in accordance with the terms of the EPC Contract. Commencement is
subject to a number of preconditions, not least obtaining necessary
finance and approval.
The Executive Chairman of GCM, Datuk Michael Tang PJN,
stated:
"I am thrilled that POWERCHINA and GCM have been able to
complete the JV Agreement and EPC Contract on a very aggressive
timeframe, and would like to express my sincere thanks to the
POWERCHINA team for the enthusiasm shown in finalising these
agreements. The spirit in which both parties have worked together
is a strong sign of a positive, long-term partnership.
The JV Agreement and EPC Contract are key milestones for the
development of the 2nd proposed 2 x 1,000MW Power Plant Project at
the mine site and aligns with GCM's strategy to present a holistic
power solution to the Government of Bangladesh which can generate
6,000MW for the country. We are confident that the Phulbari Coal
and Power Project will deliver substantial benefits for the
Government, the people of Bangladesh and our shareholders."
Mr. Ding Zheng Guo, Chairman of PowerChina International Group
Limited, stated:
"POWERCHINA is delighted to be a partner with GCM to deliver an
integrated mine and power plant for the people of Bangladesh.
Completing the JV Agreement and EPC Contract were very important
steps in progressing the combined Project. As the Power Plant
contractor, we are committed to a positive relationship with the
community and to construct an environmentally friendly power plant
for the benefit of the local people.
POWERCHINA has made a strong contribution to Bangladesh, having
completed 10 infrastructure projects including fives power plants
totaling US$750m and 12 current projects amounting to US$4.6
billion including two coal fired power plants of 1,670MW. We look
forward to working with Datuk Michael Tang PJN and his team to
deliver a world class proposal that is beneficial and acceptable to
the Government of Bangladesh."
The full details of this announcement can be found at
http://www.gcmplc.com/
For further information, please contact:
Polo Resources Limited
- Kudzayi Denenga, Investor Relations +27 (0) 787 312 919
Allenby Capital Limited (Nominated
adviser & broker)
- John Depasquale +44 (0)20 3328 5657
Blytheweigh (Public relations)
- Julia Tilley, Fergus Cowan +44 (0) 207 138 3204
About the Company
Polo Resources Limited is a multi-sector investment company
focused on investing in undervalued companies and projects with
strong fundamentals and attractive growth prospects. For complete
details on Polo, please refer to: www.poloresources.com.
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END
UPDBDGDBBDBBGCR
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January 17, 2019 07:24 ET (12:24 GMT)
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