LONDON (Alliance News) - Kolar Gold Ltd on Thursday said it has issued 8.5 million shares at 1.60 pence per share to Mineral Exploration Network (Finland) Ltd, under the terms of a joint venture deal between the pair to develop gold exploration and mining assets in Finland.
Shares in Kolar were up 5.1% at 0.998 pence Thursday morning.
Kolar initially paid EUR150,000 in cash for 150 new shares in the joint venture company, and on Thursday issued Mineral Exploration with 8.5 million shares in Kolar Gold at a premium, representing EUR150,000, in exchange for 150 existing shares in the joint venture company held by Mineral Exploration.
Following both the issue and the initial payment, Kolar owns 15.4% of the joint venture company Kalevala Gold Oy. Kolar plans to invest a further EUR350,000 in the venture to increase its stake in Kalevala to 28.3% by the end of February.
This venture will develop greenstone belt gold licences in the Suomussalmi region of eastern Finland. A greenstone belt is an area underlain by metamorphosed volcanic and sedimentary rocks, named for the green hue from the colour of the metamorphic minerals.
Kolar said the new shares issued to Mineral Exploration are locked in for a period of six months from January 5, and admission of the new shares to trading on AIM is expected next Tuesday.
"Should 100 kilos or more of gold be produced from our planned 10,000 tonne gold ore bulk sampling campaign in the third quarter this year, Kalevala will generate material revenues, based on today's gold price with the potential for such sums to be reinvested into further exploration or the possible return of capital to Kalevala shareholders through dividends," said Kolar CEO Cameron Parry.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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