Dec 10 (Reuters) - Kolar Gold Ltd, which aims todevelop the historic Indian gold fields after which it is named,is considering a complex deal that could give it a slice of anenlarged Mumbai-listed exploration and development company.
The Kolar district, about 100 km (60 miles) from thesouthern Indian city of Bangalore, has been a gold mining centrefor centuries. However, the Kolar mine has been at a standstillfor the past decade.
Under a deal between its 30 percent-held Indian partnerGeomysore Services India (GMSI) and Mumbai-listed Deccan GoldMines Ltd, Kolar could end up with a stake in Deccan,which it says would give it access to more projects.
"Should we agree to the share exchange ratio with GMSI andDGM, indirectly that gives us a listing in India," ChiefExecutive Nick Spencer said.
"India is unfortunately a very, very difficult country todevelop gold projects but this would diversify and spread thatproject risk because it is a larger portfolio," he added.
Kolar said on Tuesday that GMSI's key shareholder,Australian Indian Resources, had received an offer from Deccan,a smaller exploration firm, which was also considering buyingout other GMSI shareholders with an all-paper offer.
Kolar would end up with a substantial stake in the enlargedcompany, which would have more than 100 gold licenceapplications, if the deal goes through.
Colonial-era operations at the Kolar mine were taken over bythe Indian state after independence closed in 2001, leavingthousands unemployed, following years of underinvestment andrising costs.
A Supreme Court decision this summer approved plans forglobal tenders to revive the Kolar mine, and investors includingKolar Gold are preparing to bid.
Earlier this month the company said it expected the Indiangovernment to finalise details for the tender to run the minebefore the end of the year.
