22nd Apr 2014 10:28
LONDON (Alliance News) - Touchstone Gold Ltd Tuesday set out plans to sell all its assets and become an investment company, while revealing board changes and a share placing that raised USD1.7 million, all aimed at solving its current financing woes.
The gold mining company, which is yet to produce any revenues and had warned that is faces defaulting on some payments if it can't get new funding, said its current strategy to concentrate on gold exploration in Colombia is not in the best interests of shareholders.
The company said the market environment in Colombia, where access to its exploration assets is restricted, is affecting its funding, and it proposes to wind down control of all its existing business assets.
After the cessation of substantially all its business, the company plans to become an investment company and, under AIM market rules, will have to make an acquisition within eighteen months of its general meeting for shareholders to vote on its plan or be cancelled from trading.
Touchstone also said it has raised a total of USD1.7 million via the issue of 175.8 million shares at 0.275 pence and USD929,589 of convertible loan notes.
The company said it plans to use the funds for working capital as it executes its proposed sale and new investment strategy.
Furthermore, Touchstone Gold announced that Non-Executive Director Ilyas Khan and Executive Director Fraser Buchan will step down from its board immediately and that Shahed Mahmood and Charles Goodfellow will join the board as interim chief executive officer and non-executive director, respectively.
The company also said Chief Financial Officer Brian Morales has resigned.
The news comes a week after the company announced that it had requested to voluntarily delist from the Toronto Stock Exchange, a process expected to take place Wednesday.
Touchstone also said earlier in April that its pretax loss widened in 2013 as it a wrote down the value of assets, including property and equipment, and it again warned that it faced defaulting on some payments if it can't get new funding.
The company suspended all exploration activities during 2013 after being hit hard by the fall in the gold price and said in January that its concession contracts may have to be ceded back to the vendors. Touchstone had said it may lose all or part of its interest in those concessions if it cannot find additional funding.
Touchstone Gold shares were down 5.0% to 0.285 pence, putting it among the biggest AIM ALL-share fallers Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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