Kolar Gold has three strands to its business, these being Indian gold mining and exploration, gold projects in different jurisdictions and complementary opportunities all as indicated in the following graphic.
Indian Gold Mining and Exploration
The current focus being on The Kolar Gold Fields and Jonnairi mine.
Kolar Gold Fields
The Kolar Gold Fields opportunity is dependant on Bharat Gold Mines Limited (“BGML”) ex-employees acquiring the mining assets at Kolar through a tender process with the government of India. BGML then can partner with who they wish and this might or might not be KGLD.
The probability of KGLD being involved, based on information in the public domain, is therefore low.
Geomysore Mining Services (GMSI) are the key players in this operation with KGLD having 20.5% of the share holding. This was 23.5% prior to Thriveni investing US$2.4 million in GMSI.
Potentially this will provide the first revenue stream with an Economic Feasibility Study due to be completed this year with mining commencing the end of 2017.
It is anticipated this will be an open pit mine producing 15,000 ounces of gold per year.
Geomysore also have reconnaissance / prospecting licences to North, East and South of tthe Kolar mine. These would be of great interest to whoever gets the Kolar Gold Field licence.
Other projects in India
GMSI have very good contacts in India and KGLD’s relationship with GMSI could be key to unlocking other opportunities.
Gold projects outside of India
In a recent RNS KGLD stated they are in negotiations for an opportunity outside of India.
Hopefully in the next few weeks an announcement will be made to the market.
Cameron Parry the new CEO of KGLD has knowledge of and experience of Fintech. This is potentially another revenue stream for the business.
The fact KGLD have stated they are looking for complimentary opportunities implies they are looking at something that could be significantly value enhancing for the business.
The business, under the new leadership has several clear avenues to pursue to generate value streams. The GMSI assets provide the foundation from which other opportunities can be pursued.
Having met the new CEO I have every confidence my investment in KGLD will be lucrative. It is also evident others think the same, for the following reasons.
1. MTR have paid $25k to secure an option to buy 9m KGLD shares from Damille at 3.5p per share in early March 2017. Why do MTR think the KGLD sp will rise by a minimum of 150% in the next 5 months?
2. Cameron the new CEO is focusing all his time on a business with a mcap of only £3m. Why?
The next few months are going to be interesting.
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