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."
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
London EC2V 6DN
Tel: +44 (0)207 397 2880
The executive directors of the Company can also be contacted via email:
Cameron Parry (Chief Executive Officer/Director) [email protected]
Luke Cairns (Executive Director) [email protected]
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.
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.
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
Cameron Parry (Chief Executive Officer)
Luke Cairns (Executive Director)
Tel: +44 (0) 207 397 2880
WH Ireland Limited (Nominated Adviser)
Tim Feather / Liam Gribben
Tel: +44 (0) 113 394 6600
Smaller Company Capital Limited (Broker)
Rupert Williams / Jeremy Woodgate
Tel: +44 (0) 203 651 2911
Tavistock (Financial PR)
Tel: +44 (0) 207 920 3150
This information is provided by RNS