Kolar Gold Limited Statement re Deccan Gold Announcement (1002V)
10 Dicembre 2013 - 8:00AM
UK Regulatory
TIDMKGLD
RNS Number : 1002V
Kolar Gold Limited
10 December 2013
10 December 2013
Kolar Gold Limited
Statement re Announcement made by BSE listed Deccan Gold Mines
Limited
Kolar Gold Limited (AIM: KGLD, referred to as 'KGL', 'Kolar
Gold' or the 'Company') notes the recent announcement by Deccan
Gold Mines Limited ('Deccan'), an Indian gold exploration company
listed on the Bombay Stock Exchange ('BSE').
The Deccan Board has announced its in-principle approval for its
proposed amalgamation with Australia Indian Resources Limited
('AIR') under a Scheme of Arrangement pursuant to the provisions of
the Companies Act, 1956, India. AIR is an Australian company with a
38.8% equity interest in Geomysore Services India Private Limited
("GMSI"). Upon completion of the proposed amalgamation, Deccan will
own and control AIR's interests in GMSI. AIR will have no other
assets other than its holding in GMSI.
In conjunction with the above, the Deccan Board has also given
its in-principle approval for the proposed acquisition of the
remaining 61.2% equity interests in GMSI not held by AIR, including
the 30% equity interest in GMSI held by Kolar Gold. Deccan has
proposed to issue new shares in exchange for the GMSI shares held
by Kolar Gold and other shareholders. Accordingly, if the Board
decides to exchange Kolar's shares in GMSI with Deccan then Kolar
Gold will become a substantial shareholder in Deccan. Significant
due diligence and valuation work is currently being undertaken by
experts appointed by Deccan on the underlying value of the assets
of Deccan and GMSI, including NPV valuations on the latter stage
gold mine projects of each company. A valuer and merchant bank have
also been appointed by Deccan to determine the share exchange
ratio.
Deccan has 41 gold licence applications underway while GMSI has
71 gold licence applications in India. Accordingly a merger of GMSI
and Deccan would result in a total licence application area of
13,714 square kilometres with a combined JORC Resource of 1.670
million ounces of gold.
Kolar Gold believes that Deccan expects to submit documentation
in relation to its proposed Scheme of Arrangement for its proposed
amalgamation with AIR to the Bombay courts in the coming months.
Any subsequent share exchange offer in relation to the remaining
61.2% interests in GMSI (including Kolar Gold's interests) is
expected to be made on the same terms as the Scheme of
Arrangement.
The proposals will be subject to the approval of Deccan
Shareholders and necessary regulatory approvals including the
Securities and Exchange Board of India (SEBI), the Reserve Bank of
India (RBI) and the Indian Ministry of Mines.
The amalgamation and acquisition process contemplated by Deccan
is expected to take six to nine months and Kolar Gold advises its
shareholders to take no action at this time. In due course and on
the basis that the Board believes that any proposed share exchange
offer made by Deccan would be in the best interests of Kolar Gold,
shareholders will be sent a circular to explain the proposals in
further detail including the basis on which Kolar could exchange
its equity interests in GMSI for an equity interest in Deccan. Any
recommendation from the Board on whether to proceed with any the
proposal received will depend on a number of factors, including the
valuation parameters which would determine Kolar Gold's eventual
shareholding in Deccan, the ability of Deccan to raise fresh funds
to support the operations of the enlarged group and management /
board representation of Kolar in the enlarged group.
The Kolar Gold Board believes this has the potential to be an
excellent opportunity for the Company to combine the collective
resources of Deccan and GMSI, with the ultimate aim of becoming a
major gold explorer and mine developer in India to realise the
significant gold resource potential in India.
For the avoidance of doubt, these proposals, which have no
current legal effect, will not affect Kolar's rights to counter
offer, acquire and develop the Bharat Gold Mines Limited assets
with the majority employees unions in relation to the tender sale
process, details of which were announced on 11 July and 17 July
2013.
CEO Nick Spencer commented today: "Deccan's recent announcement
is an encouraging step towards creating the leading gold explorer
and mine development company in India. The strategic rationale
behind bringing together these two key gold exploration companies
is to create a group which can draw upon their combined resources,
diversify project risk and secure and develop licences in some of
the most prospective gold provinces in India. We look forward to
updating shareholders on the progress of the proposed Deccan/AIR
amalgamation during the course of 2014. However, in the short term
our focus remains on progressing exploration with GMSI at the
Jonnagiri Mining Licence area and preparing for the tender process
of the BGML assets on the Kolar Gold Fields."
Enquiries:
Kolar Gold Limited
Nick Spencer / Chris Clowes +61738460211
N+1 Singer (Nomad and Joint
Broker)
James Maxwell / Jenny Wyllie +442074963000
Ocean Equities Limited (Joint
Broker)
Guy Wilkes / Will Slack +442077864370
Tavistock Communications
Edward Portman / Nuala Gallagher +442079203150
Churchgate Partners
Sumir Bhadwaj +447768696760
-ENDS-
This information is provided by RNS
The company news service from the London Stock Exchange
END
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