TIDMKGLD
RNS Number : 8755D
Kolar Gold Limited
12 July 2016
Kolar Gold Limited
("Kolar Gold", "Kolar" or the "Company")
Placing, Board Changes and General Meeting
Kolar Gold Limited (LON: KGLD), the AIM-quoted India gold
exploration and mine development company, is pleased to announce a
company update and details of a placing, proposed board
appointments and an extraordinary general meeting (the "General
Meeting").
Highlights:
-- Conditional placing of 81,818,182 new ordinary shares in the
capital of Kolar at a subscription price of 1.1p per share, raising
gross proceeds of GBP900,000 (the "Placing");
-- Issue of 81,818,182 warrants to subscribe for new ordinary
shares in Kolar at an exercise price of 2.2p per warrant, within a
30 month exercise period;
-- Cornerstone investor, Metal Tiger plc (LON:MTR), has agreed
to invest GBP200,000 in the Placing and acquire 18,181,818 new
ordinary shares (equivalent to 9.4% of the enlarged share capital
of the Company);
-- Placing will enable Kolar Gold to progress its activities in
India, look to develop complementary activities in other
jurisdictions and also consider fintech opportunities;
-- Cameron Parry and Luke Cairns to be appointed as directors
with executive responsibilities; Cameron becoming the new CEO of
Kolar. Both appointments are conditional on admission to trading on
AIM of the ordinary shares to be issued under the Placing;
-- Placing conditional on shareholders' approval at the General
Meeting on or around 27 July 2016, further details of which are set
out below; and
-- A circular in connection with the Placing and a notice of the
General Meeting will be sent to shareholders today.
Company Update
On 30 March 2016, the Company announced its interim financial
results for the six months ended 31 December 2015 and the
completion of a strategic review (the "Interims"). The conclusion
of this review was that the Company would continue to develop its
existing gold exploration and development interests in India
through its investment in Geomysore Services India Pvt Ltd ("GMSI")
and its relationship with the mine workers' unions at Bharat Gold
Mines Limited ("BGML"). In addition, it would also pursue other
opportunities (within India and other jurisdictions) that are
allied and complementary, which it can develop in parallel with its
gold exploration and development interests, including in the
fintech sector, which the Board considers attractive.
The Interims stated that GMSI was in the process of raising
US$2.2 million (the "GMSI Fundraising") for additional drilling and
to complete the economic feasibility study (the "EFS") in relation
to the East Block open pit mine. At that time, the Company stated
that it would not be able to participate in the GMSI Fundraising
without raising further funds itself and, in not participating, its
interest in GMSI would be diluted proportionately. As announced on
6 July 2016, one of the four major shareholders in GMSI, Thriveni
Earth Movers Private Limited ("Thriveni"), a leading Indian mining
company and a mining contractor to GMSI, has since agreed with the
transaction approved by GMSI shareholders as announced on 7 July
2016 to invest US$2.4 million to enable GMSI to undertake the
additional drilling in relation to the East Block open pit mine,
complete the EFS and provide sufficient working capital to the end
of 2016. Following Thriveni's investment, the Company's interest in
GMSI will be diluted from 23.4% to 20.5%. With GMSI funded through
to EFS on the East Block open pit mine this will allow the
directors to consider applying resources to other opportunities,
diversifying the risk profile of the Company.
The Placing will raise GBP900,000 (before fees and expenses) and
these funds together with the Company's existing cash resources of
approximately GBP350,000 will enable Kolar Gold to continue to
develop its Indian initiatives and, with GMSI now funded through
its next work programme, also consider complementary activities in
the fintech sector as well as gold mining opportunities in other
jurisdictions.
Placing
Under the Placing (which is conditional upon the passing of the
resolutions at the General Meeting), Kolar will raise GBP900,000
(before fees and expenses) through the issue of 81,818,182 new
ordinary shares (the "Placing Shares") at a price per share of 1.1p
(the "Placing Price").
For each Placing Share issued, an accompanying warrant (a
"Placing Warrant") will be issued by the Company. Each Placing
Warrant will allow the holder to subscribe for an additional new
ordinary share at an exercise price of 2.2p at any time within 30
months following admission to trading of the Placing Shares on AIM
("Admission"). Therefore, 81,818,182 Placing Warrants will be
issued.
The Placing Price represents a discount of 18% to the 30 trading
day volume weighted average price to 11 July 2016, the latest
practicable date prior to the issue of this announcement.
Application will be made for Admission and, subject to
shareholder approval of all resolutions at the General Meeting on
or around 27 July 2016, Admission is expected to occur on or around
28 July 2016.
For the purposes of the Financial Conduct Authority's Disclosure
and Transparency Rules, following Admission, the total issued
ordinary share capital of Kolar will be 193,111,719 ordinary shares
(with one vote per share). There are no shares held in treasury.
Upon Admission of the Placing Shares, the total figure of
193,111,719 may be used by shareholders as the denominator for the
calculation by which they will determine whether they are required
to notify their interest, or a change to their interest, in
Kolar.
Related Party Transaction
Damille Investments II Limited ("Damille") has conditionally
subscribed for 6,818,181 Placing Shares with a total consideration
of GBP75,000 (the "Damille Subscription"). By virtue of Damille
being a 'substantial shareholder' as defined in the AIM Rules for
Companies (the "AIM Rules"), the Damille Subscription is considered
a related party transaction under Rule 13 of the AIM Rules.
The directors consider, having consulted with the Company's
Nomad, WH Ireland Limited, that the terms of the Damille
Subscription are fair and reasonable insofar as shareholders are
concerned.
Damille has given an irrevocable undertaking to the Company that
it will not exercise its voting rights to vote against the
resolutions at the General Meeting.
Board Changes and arrangements
Subject to the passing of the resolutions at the General Meeting
and Admission, Cameron Parry and Luke Cairns will be appointed
executive directors of the Company. Further details on Mr. Parry
and Mr. Cairns are set out in the Appendix to this
announcement.
It is intended that Cameron Parry will be appointed CEO of the
Company. Mr. Parry has undertaken to subscribe for 2,000,000
Placing Shares for a total amount of GBP22,000. In addition and as
part of his remuneration package, he will receive 5,000,000
ordinary shares in the Company (the "Remuneration Shares") upon his
appointment. Mr. Parry has undertaken not to dispose of the
Remuneration Shares for a period of at least 6 months from the date
of issue and, in the event that he leaves the Company within 6
months from his appointment, he has undertaken to repay the Company
GBP27,500 in cash equivalent to 50 percent. of the issue value of
the Remuneration shares by reference to the Placing Price.
Metal Tiger PLC (LON: MTR), of which Cameron Parry is a
Non-Executive Director, has undertaken to subscribe for GBP200,000
(18,181,818 Placing Shares) in the Placing. Onzima Ventures PLC
(LON: ONZ), of which Luke Cairns is a Non-Executive Director, has
undertaken to subscribe for GBP30,000 (2,727,272 Placing Shares) in
the Placing.
Under the terms of a shareholders' agreement entered into on 24
February 2011 between the Company and Sun Mining and Exploration
Limited ("Sun Mining") (the terms of which can be found in the
Company's AIM Admission Document dated 10 June 2011), Sun Mining
was granted the right to nominate one person to sit on the board of
the Company for as long as Sun Mining held 10% of the total shares
in issue. At present, the Sun Mining nominated director is Mr
Vaidyanathan Sivakumar. Following the Placing Sun Mining's
shareholding in the Company will fall below 10% and as a result, Mr
Vaidyanathan Sivakumar will resign from the board of the Company
with effect from Admission.
Additionally, following Admission, the Company intends to create
a pool of 19,800,000 management options to be used to reward
performance of key directors and other personnel. The management
options will be priced at 2.2p per share (a premium of 100% to the
Placing Price) with a term of 3 years and 5 months, expiring on 31
December 2019. A further announcement shall be made as and when any
management options are issued.
Extraordinary General Meeting
The General Meeting will be held on or around 27 July 2016 at
the Company's registered office, Ground Floor, Dorey Court, Admiral
Park, St Peter Port, Guernsey GY1 2HT.
The notice of the General Meeting will be sent, along with a
circular in connection with the Placing, to shareholders today.
At the General Meeting, the Company's shareholders will consider
and vote on resolutions to approve the disapplication of
pre-emption rights in respect of the Placing Shares, the Placing
Warrants, the Remuneration Shares and the ordinary shares to be
issued on the exercise of any Placing Warrants (the "Warrant
Shares"), authorise the directors to allot and issue the Placing
Shares, the Placing Warrants, the Remuneration Shares and the
Warrant Shares, approve certain amendments to the Company's
articles of incorporation, re-designate each ordinary share in the
capital of the Company with a par value of 7 pence to an ordinary
share of no par value and approve the conditional appointments of
Cameron Parry and Luke Cairns to the Board.
Harvinder Hungin, Chairman of Kolar commented: "We are embarking
on the next stage of Kolar Gold's evolution.
"Kolar has been an Indian gold focused exploration and
development company since its admission to AIM in June 2011. This
activity has been complex and difficult though the view that India
remains one of the most prospective gold jurisdictions in the world
holds and the Company is well placed to capitalise on this
opportunity as it develops. In addition to its activities in India,
the Company is now looking at related activities in the fintech
sector including in India. With GMSI now funded the Board has also
resolved that the Company should consider mining opportunities in
other jurisdictions, on an opportunistic basis, to support its
development activities."
"As part of this change Cameron Parry and Luke Cairns will be
joining the Board in an executive capacity with Cameron as CEO.
Cameron has a background in both mining and fintech and with AIM
quoted companies, most notably Metal Tiger plc where as CEO he
presided over a substantial rise in the value of that mining
investment company. Luke has a background in corporate finance and
is a former NOMAD and brings much needed executive capacity to the
Company."
"Following the dilution of Sun Mining's holding as a result of
the Placing Mr Vaidyanathan Sivakumar will be stepping down as a
director of the Company and I would like to take this opportunity
to thank him for his input and support over the years and wish him
well in his future endeavours. As continuing directors, Stephen Oke
and I remain focused on seeing Kolar succeed in its endeavours in
India and we are excited by the prospect of new opportunities that
can complement our longstanding position in that jurisdiction."
For further information, please visit www.kolargold.com.au or
contact:
Kolar Gold Limited
Harvinder Hungin +44 (0) 1481 702 400
W H Ireland Limited (Nomad)
Tim Feather / Liam
Gribben +44 (0) 113 394 6600
Smaller Company Capital
Limited (Broker)
Rupert Williams +44 (0) 20 3651 2911
Tavistock
Ed Portman / Nuala
Gallagher +44 (0) 20 7920 3150
APPENDIX
The following information is disclosed pursuant to Schedule Two
paragraph (g) of the AIM Rules for Companies.
Further information on Cameron Parry
Cameron John Parry, aged 41, is an experienced executive
director of quoted public companies in both the mining and fintech
sectors. Born in Australia and based in London since 2009, over the
past four years he has completed the sale of 51 per cent. of a
biopharmaceutical company he founded, to an ASX (Australian Stock
Exchange) listed company, created and was the CEO of AIM quoted
Metal Tiger PLC (LON:MTR), and as Executive Chairman and
co-founder, completed the world's first IPO of a blockchain fintech
company, Coinsilium Group Limited (ISDX:COIN).
Cameron Parry is currently, or has been during the previous five
years, a director of the following companies:
Current Previous
Biohealth Pty Ltd Benson Rise Limited
Bionosis Group Blockchain Space
Ltd Limited
Bionosis Technology Buzz Central Limited
Ltd
Black Star Gold Coinsilium Group
Pty Ltd Limited
Intermedical Pty Coinsilium Limited
Ltd
Metal Dragon Limited Ecowest (Aust)
Pty Ltd
Metal Horse Limited GCP Advisory Services
Pty Ltd
Metal Tiger PLC Mayfairex Ltd
Parry London Limited Metal Capital Limited
Thai Star Resources Port Robe Management
Co., Ltd Ltd
Seedcoin Limited
In December 2006, Cameron Parry became a director of an
Australian biotechnology company called Astop Biohealth Limited
which was put into administration by the Board in June 2007 and
subsequently liquidated in September 2007.
Further information on Luke Cairns
The following information is disclosed pursuant to Schedule Two
paragraph (g) of the AIM Rules for Companies.
Luke Sebastian Cairns, aged 38, was the Head of Corporate
Finance and Managing Director at Northland Capital Partners. Born
in Guernsey and based in London, Luke is a former Qualified
Executive for AIM and has advised growth companies across a number
of sectors and regions on a wide range of transactions. Luke is
currently a Non-Executive Director of AIM-listed Onzima Ventures
PLC (LON: ONZ) and he is an Associate of the Chartered Institute of
Secretaries.
Luke Cairns is currently, or has been during the previous five
years, a director of the following companies:
Current Previous
Apex 2100 Limited Carduus Housing
PLC
Doyle Energy Limited Northland Capital
Partners Limited
LSC Advisory Limited Rame Solar Limited
Lyford Renewables Swan Alley (Nominees)
Limited Limited
Onzima Ventures
PLC
The Apex 2100 Foundation
Uflutter Holdings
Limited
Weighbridge Trust
Limited
This information is provided by RNS
The company news service from the London Stock Exchange
END
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