TIDMKGLD
RNS Number : 9150N
Kolar Gold Limited
01 November 2016
Kolar Gold Limited
("Kolar Gold", "Kolar" or the "Company")
Gold Trading Platform Joint Venture and Strategic Investment
Kolar Gold Limited (LON: KGLD), the AIM-quoted gold exploration
and mine development company, is pleased to announce that it has
agreed terms for a joint venture with TRAC Technology Limited
("TRAC") to launch an online gold and silver trading and storage
platform for the Indian market (the "JV"). In addition the Company
has acquired 27.3% of existing shares in TRAC for US$50,000 in cash
and approximately US$50,000 in Kolar Gold shares through the issue
of 2,600,000 new ordinary shares at an implied price of 1.6p each
("Consideration Shares").
Highlights
-- Kolar Gold has secured the final part of its threefold
strategy through initiation of financial technology ("Fintech") JV
for India and strategic equity position in Fintech JV partner;
-- JV using proven and established web-based application that
enables people to directly own, store and trade physical gold and
silver ("Online Platform"), to be adapted for the Indian
market;
-- India has a population of 1.25 billion people and is the
world's second largest consumer of gold bars/coins and gold
jewellery (195.8 and 668.5 tonnes respectively in 2015);
-- Strategic stake in TRAC concurrently acquired to align
interests and compound potential upside from JV success in India
whilst maintaining access to other markets;
-- TRAC currently stores, on behalf of its clients, over 120kg
of gold and in excess of 4.3 tonnes of silver, across vaults in
London, Geneva, Singapore and Hong Kong.
-- India-focused Fintech product able to commence revenues in 2017; and
-- The JV shall be on a 50:50 basis between the Company and TRAC
whereby Kolar will provide the first GBP50,000 and TRAC will act as
the technology partner and utilising its proven platform in the UK,
www.therealasset.co.uk
Cameron Parry, CEO of Kolar Gold, commented: "We are delighted
to have agreed this JV with TRAC, enabling Kolar to launch an
online resource for gold trading and storage for the people of
India, building on our gold mine development and exploration
interests in country and leveraging off our network there. This JV,
using proven technologies and expertise, gives us a low cost entry
point into a potentially vast market.
"TRAC is an ideal partner for this venture, having the
experience of developing and establishing the Online Platform in
the UK, and aided further with TRAC's CEO and founder, having
operational experience of working in India. Further, by taking the
strategic equity stake in TRAC we stand to compound the benefit to
Kolar of success achieved by the JV whilst providing exposure to
opportunities in other territories.
"In the three months since the new management team has been in
place, Kolar has set out its corporate direction, completed its
operational review, and implemented its threefold strategy. Kolar
has strengthened its business relations with its gold exploration
partners in India whilst seeing the resource at its most advanced
project materially increase, it has diversified jurisdictional risk
and project potential through our joint venture in Finland, and
created a new opportunity with the Company's background in gold and
India through our Fintech initiative. We look forward to continuing
Kolar's rapid progression and providing further updates soon."
Key Terms of the JV:
-- New company to be established, 50% owned by Kolar, 50% owned by TRAC ("TRAC India");
-- TRAC to grant exclusive licence to TRAC India for use of its
technology and knowhow (including personnel) associated with the
Online Platform in India;
-- Kolar to initially provide up to GBP50,000 and thereafter any
funds required to be on a pro rata basis or otherwise through third
parties;
-- All IP developed through the JV to be retained by TRAC India; and
-- Kolar has the right to appoint a majority of directors to the board of TRAC India.
Strategic Equity Holding in TRAC
In addition to the JV, Kolar has acquired a 27.3% interest in
the existing equity of TRAC for US$50,000 in cash and approximately
US$50,000 in stock through the issue of 2,600,000 Consideration
Shares at an implied price of 1.6p per Consideration Share. The
Consideration Shares have a lock-in period and are not permitted to
trade before 31 January 2017.
TRAC was founded in 2010 in the UK and developed a gold and
precious metals trading platform, allowing users to easily track
and trade physical gold and silver. TRAC generates revenues through
transaction and storage fees. When purchasing gold or silver
through TRAC's platform, clients take direct ownership of the
physical gold/silver in their own name with TRAC acting as
custodian storing the asset at vaults across London, Geneva,
Singapore and Hong Kong. As at today's date, TRAC stores on behalf
of clients in excess of 120kg of gold and over 4,400kg of
silver.
Following their issue and allotment, application will be made
for the Consideration Shares to be admitted to trading on AIM,
expected to be around 4 November 2016. Following the admission to
trading of the Consideration Shares, the Company's enlarged issued
ordinary share capital will comprise 195,711,719 ordinary shares of
no par value. This is the total voting rights figure that may be
used by shareholders as the denominator for the calculations by
which they will determine whether they are required to notify their
interests in, or a change to their interest in, the Company.
For further information, please visit www.kolar-gold.com or
contact:
Kolar Gold Limited Tel: +44 (0) 207 397 2880
Cameron Parry (Chief Executive Officer)
Luke Cairns (Executive Director)
WH Ireland Limited (Nominated Adviser) Tel: +44 (0) 113 394 6600
Tim Feather
Ed Allsopp
Vicarage Capital Limited (Broker) Tel: +44 (0) 203 651 2911
Rupert Williams / Jeremy Woodgate
Tavistock (Financial PR) Tel: +44 (0) 207 920 3150
Emily Fenton
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCGMMFGNMRGVZM
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November 01, 2016 03:00 ET (07:00 GMT)
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