Lionsgold Regulatory News (LION)

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 £157,525.28 for 649 new shares at £242.72 per share (together with Mr. Parry's subscription, the "Subscription Funds").

· Concurrently TRAC to convert outstanding debts owed to LION (£16,769) and to TRAC's CEO (£4,620) 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 £27,912.80 from Cameron Parry, TRAC shall have approximately £220,000 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 £4,051 and reported an unconsolidated loss before tax for the year then ended of £18,488. As at 31 March 2016, The Real Asset Co. Limited, TRAC's wholly owned subsidiary, had an unconsolidated net asset deficit of £51,417 and reported an unconsolidated loss before tax for the year then ended of £21,437.

Following the new shares being issued, TRAC shall become a majority controlled subsidiary of Lionsgold.

For further information, please contact:

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.