Shares of GCM Resources PLC (LON: GCM) today surged 86.2% after the energy and mining company signed a framework agreement with China Nonferrous Metals (CNF) to develop GCM's Phulbari coal and power project in Bangladesh.
The two companies will form a joint venture entity to discuss and arrange works related to the project, including a definitive feasibility study and financing.
China Nonferrous Metal is expected to acquire a 5% stake in the joint venture and to arrange financing for the project since it will be appointed as the exclusive engineering, procurement, construction and commissioning contractor.
Datuk Michael Tang PJN, GCM’s Executive Chairman, stated: “Whilst the Covid-19 pandemic has delayed our progress with the Project, we believe that it has encouraged the Government of Bangladesh to review and enhance its energy security by utilising local fuel sources, following supply and importation disruptions.”
“We are also pleased to report that a large part of the process towards finalising our strategic partnership with NFC and PowerChina has been completed. Both NFC and PowerChina are highly respected global companies, and in becoming strategic partners to the Project, is expected to add tremendous strength and credibility to our proposal.”
The project is expected to produce 572 million metric tonnes of high-grade coal while generating 6,000-megawatt of electricity.
GCM Resources share price
GCM Resources shares today surged 86.2% to trade at 18.70p having rallied from Wednesday’s closing price of 10.04p.