27^th February 2015

GCM Resources plc

("GCM" or the "Company")

(LON:GCM) 

Interim results for the six months ended 31 December 2014

GCM Resources plc (LON:GCM), a resource exploration and development company, is pleased to report its interim results for the six months ended 31 December 2014.

Highlights:

�      The Government of Bangladesh has continued to pursue its long-term strategy of re-balancing the country's energy sector towards coal-fired power, which will substantially increase the in-country demand for thermal coal in the coming years. The Company's coal project, a world class resource of 572 million tonnes, is well placed to meet the anticipated market requirements.

�      The OECD examination conducted by the UK National Contact Point concluded almost entirely in favour of the Company.

�      GCM recorded a loss after tax of �461,000 for the period ended 31 December 2014 (31 December 2013: loss of �518,000).

The Chairman's Statement and the full unaudited interim report are presented below.

For further information:

I have great pleasure in presenting the December 2014 interim report of GCM Resources plc ("GCM"). GCM's key objective remains focused on developing the Phulbari Coal Project (the "Project"), a world class resource of 572 million tonnes (JORC 2004 compliant), located in North-West Bangladesh.

Over the last six months the Government of Bangladesh has continued to pursue its long-term strategy of re-balancing the country's energy sector towards coal-fired power, supported by a diversified mix of other energy sources. Implementation of the Government's Power Sector Master Plan (PSMP) will require adding 19,650MW of coal-fired power generation within 15 years, which would depend upon the equivalent of 58 million tonnes of high calorific coal. The PSMP envisages the coal supply will be 60% domestic and 40% imported.  At this stage feasibility studies are progressing for 3,700MW public sector coal-fired power projects and two contracts amounting to 1,152MW have been awarded in the private sector.  Construction and commissioning dates for these projects are yet to be finalised.   

There is already a vibrant coal market in Bangladesh driven by the brick kiln industry.  Historically this coal has been imported from the Meghalaya State of India and is extremely poor quality with very high sulphur content.  An independent supply channel and market study commissioned by GCM concluded the annual demand is over five million tonnes for the brick industry.  In May 2014 the Indian Government suspended coal mining in Meghalaya in an attempt to regulate the ad hoc activity.  The Bangladesh brick industry, which is a crucial part of the country's construction sector, is looking for a more reliable long-term coal supply solution.

The in-country demand for thermal coal is therefore anticipated to substantially increase in the coming years.  Of Bangladesh's five known coal deposits, the Phulbari coal deposit is the most advanced in preparation for extraction due to GCM's extensive and detailed exploration and evaluation studies.  The Phulbari Coal Project is therefore well placed to meet the market needs.

GCM, through its subsidiaries, retains its legal right to explore, develop and mine in respect of its Contract with the Government of Bangladesh which has granted the licences and lease, subject to approval of the Scheme of Development submitted to the Government of Bangladesh.  It is this approval which the Board continues to pursue in order to realise the benefits of the Project for all stakeholders. 

Engagement with the communities over the entire project area remains a core focus of the Company's activities and community meetings with local citizens, community leaders and businesses have continued throughout the last six months. The objective of these discussions is to understand the needs and view of the local community and explain the potential benefits and implications of a mine and associated activities.  

As announced on 20 November 2014 the UK National Contact Point to the OECD (the "NCP") reported on its examination into alleged breaches of the OECD Guidelines for Multinational Enterprises made by activists. All the allegations in respect of human rights were either rejected by the NCP on the basis of being unsubstantiated or rejected by the NCP after examination into the complaint.

The NCP found one partial breach due to GCM's reduced communication with local communities for the period 2006 - 2012, being the period following completion of the Project's Feasibility Study.  However this matter has already been addressed and as from 2012 the Company substantially broadened its community communication and engagement activities with the aim of ensuring the local community remains fully informed on the Project.

The positive outcome of the examination was expected. From the outset the project exploration and evaluation activities were undertaken with the goal of building a world-class mining project. An international team of industry leading consultants was assembled to study and plan the project. The Environmental and Social Impact Assessment was prepared according to the highest international standards that existed at the time and was independently reviewed with guidance from the Asian Development Bank. Since then the Company has continued to update its plans in line with developments in international standards and continues to act with integrity and fairness.

The examination conducted by the NCP was a thorough and impartial process by a credible, internationally respected organisation and we look forward to the dialogue moving to the substantial benefits that the Project can deliver to the local communities and businesses.

Financials

The Company recorded a loss of �461,000 for the period ended 31 December 2014 (31 December 2013: �518,000), which included non-cash expenditure of �124,000. Capitalised evaluation costs relating to the Phulbari Coal Project was �356,000 for the six months ended 31 December 2014 (31 December 2013: �477,000).

GCM will seek to raise sufficient funds by June 2015 to enable the Company to maintain its operations for the foreseeable future. The Board are confident that a future fundraising will be successful.

Outlook

Over the next 12 months the Board will continue pursuing approval of the Project through its ongoing relationship with the Bangladesh Government while progressing community engagement activities. I would like to thank the Company's shareholders for their continued confidence and support.

Michael Tang

Executive Chairman