11 July 2013
Kolar Gold Ltd
('KGL' or the 'Company')
Supreme Court of India approves plans to enable the Indian Government to proceed with the tender sale of BGML Mine
Kolar Gold Limited (AIM: KGLD) notes yesterday's media reports, announcing that the Supreme Court of India instructed the Government of India to proceed with the tender sale and mine revival of the historic Bharat Gold Mines Limited ('BGML') gold mines at Kolar Gold Fields. The KGL Directors believe that the written order from the Court is expected to be published tomorrow.
Once initiated, the tender process is anticipated to give the right of first refusal and counter offer rights to the majority Cooperative Societies of BGML ex-employees and their financial and technical collaborator, Kolar Gold Limited. KGL has maintained a long standing relationship with such ex-employee groups.
Tendering for these assets was and has remained a key objective of the Company since its shares were admitted to AIM in June 2011. The historic Kolar Gold Fields have produced 25 million ounces of gold at 15.9 grams per tonne over the 120 years of their operation until their closure in 2001 and represent significant development potential.
One of the next steps include the finalisation by the Mines Ministry of the already drafted tender document and initiate the approved four month process, which invites tenders from all gold mining companies with expertise in underground and selective open pit gold mining, tailings operations and responsible and sustainable community development to submit appropriate bids in return for a mining licence over the BGML assets.
The Directors believe that the Company and its local partner, SUN Mining*, have the relevant expertise and skill set for all aspects of the tender. In addition, the Company's other activities, which are the exploration and development of gold projects adjacent to and surrounding the BGML gold mines in the Kolar Gold Fields, demonstrate its commitment to gold exploration and mine development in this region.
The successful acquisition of the BGML assets, as well as being subject to due diligence, valuation and environmental consideration would require a separate fundraising which is likely to require shareholder consent from KGL shareholders.
A further announcement will be made once the Order has been published and the Board has had opportunity to consider it.
Nick Spencer CEO of KGL commented today:
"This long awaited BGML mine sale tender and revival is an enormous step and huge opportunity for the Kolar community and, if successful, Kolar Gold to re-start operations on one of the world's great gold belts and create significant employment and economic development in an area of poverty, ill health and unemployment. We are very close to this community and ex-workforce and have been working closely with them to bring prosperity to the area."
*SUN Mining's affiliate SUN Gold is an Indian origin gold mining and exploration company, which is developing two large gold mines.
Kolar Gold Limited
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James Maxwell / Jenny Wylie
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