15th Jul 2014 11:49
LONDON (Alliance News) - Kolar Gold Ltd Tuesday reiterated confidence for future progress, saying it believes the environment for its activities has improved following the elections in India earlier in the year.
Kolar Gold reviewed its strategy in 2013 as a result of slow progress in its gold licence and exploration activities, and revised its arrangements with its partner Geomysore Services India Private Ltd to focus on developing prioritised later-stage gold exploration-and-mining licences. It also took measures to reduce its cost.
At the end of 2013 Deccan Gold Mines proposed a merger with Australia India Resources, the largest shareholder in Geomysore, in which it has a 24.65% interest. Upon completion of the merger Deccan will own and control Australia India Resources' interest in Geomysore. Additionally, it will seek to buy up the remaining interest in Geomysore it does not already own, including Kolar's share.
Kolar believes that a scheme for approval for the merger is almost fully prepared, and understands that the merger will require new funding to be raised to finance the enlarged group's activities.
The company said if the merger is completed. it will own a proportional stake in the new entity, and said it is likely it will have an opportunity to invest in the merged entity.
However, it has not received any firm proposal for it to consider in relation to the proposed merger.
Meanwhile it is continuing to work on the proposed acquisition of Bharat Gold Mines Ltd, which it says represents a "significant and separate opportunity". Kolar, alongside with ex-employees of Bharat, has the right of first refusal to acquire the company, and said it is preparing for the tender sale process.
Kolar is considering its available financing options to be able to participate in the process, expected later in the year.
"The remainder of 2014 is likely to be key in the delivery of Kolar Gold's two clear gold strategies in India, and we look forward to providing a further update on these developments over the months ahead," the company said in its statement.
Shares in Kolar were trading down 3.5% at 3.50 pence Tuesday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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