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").
· 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 £50,000 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 £50,000 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
Cameron Parry (Chief Executive Officer)
Luke Cairns (Executive Director)
Tel: +44 (0) 207 397 2880
WH Ireland Limited (Nominated Adviser)
Tel: +44 (0) 113 394 6600
Vicarage Capital Limited (Broker)
Rupert Williams / Jeremy Woodgate
Tel: +44 (0) 203 651 2911
Tavistock (Financial PR)
Tel: +44 (0) 207 920 3150