TIDMKGLD
RNS Number : 9716J
Kolar Gold Limited
15 September 2016
Kolar Gold Limited
("Kolar Gold", "Kolar" or the "Company")
Operational Review and Strategic Update
Kolar Gold Limited (LON: KGLD), the AIM-quoted India gold
exploration and mine development company, is pleased to provide
this operational and strategic update following the placing and
board changes as previously announced, completed on 29 July
2016.
Kolar Gold CEO, Cameron Parry, commented: "Kolar Gold has
entered a new chapter. We are pleased to report that the new
management has made significant progress to remedy structural
deficiencies and operational inefficiencies that existed within the
Company previously. Concurrently we have been developing a strategy
to build value and generate cashflow whilst managing risk.
"The opportunities India holds are vast and having now seen
Kolar's Indian assets first hand and the commencement of the
Economic Feasibility Study at the Jonnagiri project, there is the
potential for the coming months to be pivotal in unlocking the
value for the most advanced of Kolar's Indian gold interests, from
which the Company can achieve its goal of becoming a gold producer
in India.
"We are also looking to develop complementary business
opportunities for the Indian market and to become a co-operator of
near-term cashflow generative gold projects within an alternative
jurisdiction."
Operational Review
Since their appointment, the new executive team has undertaken a
review of the historical operations of the Company. Throughout the
review it became apparent that Kolar Gold had been running with
various inefficiencies that were now either redundant or
inappropriate for a Company of Kolar's size. With this in mind, the
Board has put in place measures and controls to strictly manage
costs, whilst centralising the management and operations of the
business.
London-based Operating Office
As part of these changes, the Company is in the process of
liquidating its wholly owned Australian subsidiary, Kolar Gold Pty
Limited, simplifying the group structure and reducing the cost of
unnecessary subsidiaries and advisors. As of today the Company has
set up its operating office in the City of London. The new office
address and telephone number to contact the Company are:
Kolar Gold Limited
107 Cheapside
London EC2V 6DN
United Kingdom
Tel: +44 (0)207 397 2880
The executive directors of the Company can also be contacted via
email:
Cameron Parry (Chief Executive Officer/Director) cameronparry@kolar-gold.com
Luke Cairns (Executive Director) lukecairns@kolar-gold.com
The Company's registered office remains: Ground Floor, Dorey
Court, Admiral Place, St Peter Port, Guernsey GY1 2HT.
The executive team's review of operations, key personnel and use
of external service providers is ongoing and we will continue to
target increased efficiencies and costs savings where possible.
Concurrently, the new Board has been building the Company's
strategy around three component parts: Indian gold mining and
exploration; complementary opportunities for the India market; and
jurisdictional diversification of gold projects.
India Projects Update
Jonnagiri - drilling commenced
As announced previously, the Company's primary asset Geomysore
Mining Services (India) Private Limited ("Geomysore") is fully
funded for further drilling on its licences through to the
conclusion of an economic feasibility study ("EFS") in relation to
the Jonnagiri East Block open-pittable mine. We are pleased to
report that drilling has commenced and the EFS is expected to be
completed in Q1 2017.
The Company's new CEO, Cameron Parry, together with
non-executive director Stephen Oke were on site and in the
Bangalore offices of Geomysore during the week commencing 4
September 2016 along with global mining consultants, Golder
Associates, to review and confirm the work programme for the coming
months. With drilling now underway this could be a defining period
for Kolar Gold as, through Geomysore, it takes a step closer
towards becoming a gold producer in India.
Further announcements in relation to Jonnagiri and the EFS will
be made over the coming months as and when appropriate.
Kolar Gold Fields
With respect to the Company's interest in the formerly operating
and historically productive mine in the Kolar Gold Fields, its
working relationship with the mine workers' unions at Bharat Gold
Mines Limited ("BGML") remains an ongoing and open-ended situation.
The new executive team is committed to investigating fully the
viability of the project and level of potential for a financial
return for Kolar Gold. To that end, during his recent trip to
India, Kolar Gold's CEO met with certain representatives and union
members of BGML. At this stage the board cannot comment further as
to the likelihood or otherwise of the Company formalising a
commercial relationship with BGML if and when the associated
licences are granted by the government to BGML.
Surrounding the Kolar Gold Fields mine that was operating up
until 2002, lies other land that forms the Kolar Gold Fields land
that is potentially highly prospective for gold. Geomysore, of
which the Company owns 20.5%, holds either the reconnaissance or
prospecting licences to much of these areas to the North, East and
South of the disused Kolar mine.
New Opportunities
The Company has tried to identify over the course of this year,
ways in which it could leverage its involvement in the India
natural resources sector with the fast growing and huge India
market more generally. One such way as previously announced is to
explore opportunities in fintech and the new executive management
brings to Kolar Gold knowledge and experience of various fintech
applications and a pipeline of potential technology partners.
Jurisdictional diversification
As stated previously, following the placing announced in July,
the Company indicated its intention to expand its project
portfolio, and specifically into a new jurisdiction to mitigate
actual and perceived risk of operating solely in India.
Accordingly, the Company has made steady progress to secure an
additional mining asset that could become cashflow generative in
the relative short term. The Company will make further
announcements in relation to this if and when a transaction
concludes.
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 / Liam Gribben
Smaller Company Capital Limited (Broker) Tel: +44 (0) 203 651 2911
Rupert Williams / Jeremy Woodgate
Tavistock (Financial PR) Tel: +44 (0) 207 920 3150
Edward Portman
This information is provided by RNS
The company news service from the London Stock Exchange
END
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