TIDMLION
RNS Number : 8373K
Lionsgold Limited
12 July 2017
12 July 2017
Lionsgold Limited
Increase to Majority Ownership of Fintech Gold Company
Lionsgold Limited ("Lionsgold", "LION" or the "Company"), the
gold-focused exploration company with assets in India and Finland,
and significant shareholder of a physical gold holding and trading
exchange, is pleased to announce that it has agreed terms to become
the majority owner of gold-focused financial technology company,
TRAC Technology Ltd ("TRAC").
Highlights
-- Lionsgold to increase to a 55% majority shareholding in TRAC.
-- Lionsgold's CEO, Cameron Parry, to buy a 5% shareholding in TRAC.
-- Lionsgold to subscribe GBP157,525.28 for 649 new shares at
GBP242.72 per share (together with Mr. Parry's subscription, the
"Subscription Funds").
-- Concurrently TRAC to convert outstanding debts owed to LION
(GBP16,769) and to TRAC's CEO (GBP4,620) for 69 and 19 new shares
respectively.
-- Lionsgold's CEO to be appointed to TRAC Board as Non-Executive Chairman.
-- Together with the balance of unspent funds available from
capitalising the India JV as announced on 3 May 2017, and the new
funds now from Lionsgold plus GBP27,912.80 from Cameron Parry, TRAC
shall have approximately GBP220,000 in working capital.
-- TRAC aiming to roll out a suite of alternative-banking
gold-based products during H2 2017, including a direct debit card
and mobile phone banking-style app, as well as developing a
gold-backed cryptocurrency planned for release during 2018.
Cameron Parry, Chief Executive Officer of Lionsgold, commented:
"We are delighted to report that Lionsgold has acquired a majority
shareholding, in the gold-focused financial technology company
behind "The Real Asset Company" and "IndexGold" brands, TRAC
Technology Ltd. This transaction sees TRAC become a trading
subsidiary under LION's group structure and is an important piece
for delivering our vision of a gold exploration, production and
application 'mine to market' business model.
"TRAC is currently a small business with established banking and
regulatory associations that provide the foundation of an exciting
opportunity for LION, and whilst a new digital marketing strategy
is being developed and following LION's recent placing, the timing
was opportune to commit working capital and resources behind the
enterprise and achieve a majority shareholder position.
"TRAC will retain the services of TRAC's founder, Mr Ralph
Hazel, as CEO and I look forward to working with Ralph at board
level to progress an ambitious programme of new product development
and market penetration. After trying to increase traction in the UK
market, it is the intention for TRAC to leverage off Lionsgold's
India network of contacts with a view to delivering certain
products to the India market.
"Initially the gold-based products planned for development and
rollout this year are a pre-paid debit card linked to clients' gold
accounts and a mobile banking-equivalent smartphone app.
"Additionally, we plan to explore the ability to enable
ownership of gold, a traditional store of value, with the utility
and immediate settlement and clearing that blockchain technology
provides as a new form of cryptocurrency, as part of future
products planned."
Details of the Transaction
As announced on 8 June 2017, Lionsgold intended to apply part of
the proceeds from its recent placing to advance its strategic plans
in relation to its Fintech Gold division.
Having acquired initially a 27.3% shareholding in TRAC as
announced on 1 November 2016, in conjunction with entering into a
joint venture ("JV") targeting the India market, on 3 May 2017,
LION announced it had agreed with TRAC that Lionsgold would
capitalise its India JV interest and unspent balance of original JV
working capital committed, into new shares in TRAC, and thereby
increasing its holding to 37.7%. Lionsgold has now agreed to inject
new working capital into TRAC whilst converting some debt owed to
equity and seeing LION increase its shareholding to a 55% ownership
position. Concurrently, Lionsgold CEO Cameron Parry has agreed to
acquire 5% of TRAC (together a combined 60% holding) and join the
board of TRAC as Non-Executive Chairman to lead corporate
strategy.
The Subscription Funds shall be paid in four equal instalments
subject to the following milestones:
o Deal completion and new shares being issued,
o Completion of phase 2 digital marketing strategy and gold
account debit card being released,
o Mobile phone 'banking' app being released,
o 650 active users holding precious metals via the
TRAC/IndexGold gold-backed alternative bank account products.
TRAC's CEO and Lionsgold Limited will each be issued with 100
management options exercisable at a 50% premium to current funding
round with a three-year term. TRAC's CEO will be issued with an
additional 86 management options on the same terms but vesting in
year 2 subject to TRAC reaching 1,000 active clients.
About TRAC
TRAC was founded in 2010 in the UK and developed a gold and
silver trading platform, allowing users to easily track and trade
physical gold and silver.
TRAC currently generates revenues through transaction and
storage fees. When purchasing gold or silver through TRAC's
platform, clients take direct ownership of the physical gold/silver
in their own name with TRAC acting as custodian storing the asset
at vaults across London, Singapore, Geneva and Hong Kong. As at
today's date TRAC stores on behalf of its clients approximately 120
kilograms of gold and circa 4,400 kilograms of silver.
As at 31 March 2016, TRAC had an unconsolidated net asset value
of GBP4,051 and reported an unconsolidated loss before tax for the
year then ended of GBP18,488. As at 31 March 2016, The Real Asset
Co. Limited, TRAC's wholly owned subsidiary, had an unconsolidated
net asset deficit of GBP51,417 and reported an unconsolidated loss
before tax for the year then ended of GBP21,437.
Following the new shares being issued, TRAC shall become a
majority controlled subsidiary of Lionsgold.
For further information, please contact:
Lionsgold Limited Tel: +44 (0) 20 7397 2880
Cameron Parry (Chief Executive Officer)
Luke Cairns (Executive Director)
WH Ireland Limited (Nominated Adviser) Tel: +44 (0) 113 394 6600
Tim Feather
Ed Allsopp
Smaller Company Capital Limited (Joint Broker) Tel: +44 (0) 20 3651 2911
Rupert Williams
Jeremy Woodgate
Beaufort Securities Limited (Joint Broker) Tel: +44 (0) 20 7382 8300
Elliot Hance
Tavistock (Financial PR) Tel: +44 (0) 20 7920 3150
Emily Fenton
Edward Lee
About LIONSGOLD
Lionsgold is a London Stock Exchange AIM market quoted,
gold-focused exploration company, with gold assets in India and
Finland and a significant shareholding in a physical gold and
silver online vaulting and trading platform.
Lionsgold's three core focuses are:
-- Strategic partnership with leading India gold exploration and
mine development company, Geomysore, in which Lionsgold owns
20.5%;
-- Physical gold holding and trading financial technology platform for the UK, India and other jurisdictions; and
-- Gold exploration and production in Finland.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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