10 Jun 2011 07:00
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, REPUBLIC OF SOUTH AFRICA, REPUBLIC OF IRELAND OR JAPAN
10 June 2011
TOUCHSTONE GOLD LIMITED
Admission to Trading on AIM - First Day of Dealings
Touchstone Gold Limited ("Touchstone" or "the Company"), the gold exploration and development company focused on its 100%-owned Rio Pescado Project in Colombia, is pleased to announce the admission of its share capital to trading and the first day of dealings in its Ordinary Shares on the AIM market of the London Stock Exchange at 8.00am today. The Company's AIM symbol is TGL.
The Company has raised gross proceeds of £10 million through a placing of 37,037,038 Ordinary Shares primarily to institutional investors representing 35.7 per cent. of the Company's Enlarged Share Capital at Admission. The market capitalisation of the Company at the Placing Price of 27 pence per Ordinary Share is £28 million.
Collins Stewart Europe Limited is the nominated adviser and broker to the Company.
Overview
§ Touchstone Gold is a gold exploration and development company and the 100% owner of the Rio Pescado Project in Colombia, comprising four concessions over a total area of 39km² in the highly prospective Segovia Gold Belt.
§ Initial exploration work on the Rio Pescado Project has already defined a number of shallow, flat lying, gold-bearing quartz veins leading the Directors to believe there is potential for a large near-surface resource.
§ Exploration work and drilling to date has focused on less than 10 per cent. of the Rio Pescado Project and the Directors believe there is potential for further discovery in the concession area.
§ Net proceeds raised by the Placing will be used to progress the definition of indicated and inferred resources on the initial target area and to explore the larger land package with a view to defining additional exploration targets.
§ The Directors and senior management have significant experience of both the mining and finance sectors with a proven track record for building substantial gold and other mining companies.
Commenting on the placing and admission to AIM, Bob Buchan, the Company's Chairman, said:
"We are delighted with the support institutional investors have given to the Placing which will provide us with a solid platform to pursue our growth plans. We have a large land package in one of the world's most prospective and productive gold mining districts. Over the next year, we intend to conduct extensive systematic exploration and development of the Rio Pescado Project as we look to build a significant and profitable gold mining operation."
Enquiries:
Touchstone Gold Limited +44 (0) 207 399 4380
David Wiley, Chief Executive
Fraser Buchan, Executive Director
Waseem Shiraz
Collins Stewart Europe Limited +44 (0) 207 523 8350
John Prior
Adam Miller
Sebastian Jones
Merlin Financial PR + 44 (0) 207 726 8400
David Simonson
Ian Middleton
Fiona Crosswell
All defined and technical terms contained in this announcement have the same meaning as in the Admission Document published by Touchstone Gold Limited on 7 June 2011, which is available on the Company's website.
Further Information on Touchstone Gold Limited
Introduction
Touchstone Gold Limited is a mineral exploration company incorporated in the British Virgin Islands with offices in Toronto, Canada and Medellin, Colombia. Since its establishment on 29 June 2009, the Group has been active in Colombia, South America, and is currently the holder of four concessions over a total area of 39km² in the Segovia Gold Belt of Antioquia Department in north, central Colombia. The four registered permits are Las Pepas (MCA No. 5969 and MCA No. 6055), El Seis (MCA No. 7013) and El Siete (7014), which are collectively known as the Rio Pescado Project.
Touchstone commenced exploration activities at the Rio Pescado Project in August 2009 with an initial drilling programme constituting 22 diamond drill holes for a total of 1,517 metres. This programme identified significant gold mineralization hosted within quartz bodies up to 28 metres in true thickness. A second stage of drilling and additional field exploration activities commenced in 2010 and continues to the present time. As of 13 May 2011, an additional 96 drillholes for a total of 5,283 metres have been completed. This later drilling has extended the previously identified mineralization and identified further zones and styles of gold-bearing mineralization.
Exploration work and drilling to date has focused on less than 10 per cent. of the Rio Pescado Project and the Directors believe that there is potential for further discovery in the concession area.
The Directors have extensive experience in both the mining and finance sectors and are experienced in the evaluation of mining assets, in raising funds on international capital markets, in evaluating acquisition and investment prospects and in the day to day management of public companies. The Directors believe that their expertise and experience will benefit the Company in the development of the Company's business.
Background
The Company has made a new gold discovery in Colombia, which the Directors believe has the potential to be a significant mining operation. The Group has raised funds to further develop its concession areas on and adjacent to this initial discovery, through continued systematic exploration, with the objective of discovering significant gold resources that can be developed into a profitable gold mining operation.
The Board seeks to increase shareholder value by the systematic exploration and development of the Group's existing assets as well as the acquisition of suitable exploration and development mineral projects. The Directors believe that existing gold discoveries at the Rio Pescado Project can be increased by further drilling on existing prospects and by exploration for additional gold targets over the remainder of the tenements.
Key Strengths
The Directors believe that the Group's key strengths are:
• a large land package in a highly prospective gold district with historical production of over 30 million ounces of gold;
• current exploration work by Touchstone has identified the potential for a significant open-pittable high grade gold resource, with other targets identified for exploration on the less than 10 per cent. of the area under concession that has currently been explored; and
• a highly experienced management team with a proven track record for building substantial gold mining companies.
Strategy
The Company's long-term intention is to create a significant gold exploration and production group. To achieve this, the Group's intended strategy in the short to medium term is:
• to conduct infill drilling, step-out drilling, and resource definition drilling on the three existing targets at Las Pepas with a view to reporting a maiden NI 43-101 and JORC compliant resource;
• to conduct further exploration drilling on several identified exploration targets to assess mineralization potential in addition to further exploration work in the concession areas; and
• to identify further drill targets through geological mapping, initial exploration drilling and geophysics.
In addition to focusing on development of its existing concessions the Group may utilise both its presence in and knowledge of Colombia and contacts in the mining sector as a platform to seek further growth opportunities via joint venture arrangements and/or acquisitions of other gold projects which could add value to the Group.
Use of Proceeds and Reasons for Placing and Admission
The Company requires additional funding in order to progress to the definition of indicated and inferred resources on the initial target area and to explore the larger land package with a view to defining additional exploration targets.
The Company intends to use the net proceeds of the Placing, expected to be approximately £8.8 million, for:
• exploration and development (including geological mapping, geophysical surveying, soil sampling, trenching, drilling, initial metallurgical work, professional technical staff and logistical support) at an estimated cost of £7.4 million; and
• general and administration costs (including payroll, compliance, licence fees, concession transfer payments, rent, travel and insurance) at an estimated cost of £1.4 million.
In addition to the initial fundraising from the Placing, the reasons for Admission are as follows:
• to enable the Company to access institutional capital to broaden its investor base;
• to maintain a high level of transparency and corporate governance; and
• to assist in recruiting, retaining and incentivising staff and employees.
The Board
The Board comprises five Directors in respect of whom brief biographies are set out below.
Robert Buchan (Non-Executive Chairman)
Mr. Buchan, age 63, has 35 years of experience in the mining sector. Mr. Buchan is currently the Executive Chairman of Allied Nevada Gold Corp., Chairman and Chief Executive Officer of Elgin Mining Inc., and from 1993 to 2005 he served as the CEO of Kinross Gold Corporation.
Mr. Buchan started Kinross in 1993 with production of 25,000 oz and, through exploration and acquisition grew the company to become the sixth largest gold producer in the world, producing 1.6m oz from 12 operations, when he stepped down as CEO in 2005.
Dave Wiley (Chief Executive Director)
Mr. Wiley, age 41, is a Co-founder and Partner of Toronto based merchant banking firm Raven Hill Partners which has a focus on natural resources and mining. Mr. Wiley was also founding President and CEO of Merc International Minerals, where he was responsible for growing the company's Northwest Territories land position and initiating an exploration programme. In addition, Mr. Wiley co-founded and was formerly the President and CEO of Elgin Mining where he was instrumental in taking the company from a start-up private enterprise to a publicly listed company on the Toronto Stock Exchange. From 1996 to 2001, he was President and Chief Investment Officer of The Inferential Investment Trust, a New York City based fund of private companies and publicly traded securities.
Fraser Buchan (Executive Director)
Mr Buchan, age 27, currently serves as the CEO of Angus Mining (Namibia), a junior gold exploration and development company. Prior to this, Mr Buchan was the VP of Corporate Development for Elgin Mining Inc., (formerly Phoenix Coal Inc.), and an associate of Institutional Sales with GMP Securities, a Canadian investment dealer. Mr. Buchan earned a BA in Economics from McGill University.
Ilyas Khan (Non Executive Director)
Mr Khan, age 48, is the founder of investment holding company TW Indus, which, amongst other things is the major shareholder of Hong Kong and London based privately owned merchant banking group Stanhill Capital Partners. Mr Khan is also Executive Chairman of NYSE listed Evergreen Energy, a clean energy business that holds the patent for a technology that significantly improves the performance of low rank coals. He is also a founding shareholder of AIM listed Zoltav Resources. He was appointed in June 2009 as Chairman of the NGO and charity, Leonard Cheshire Disability (LCD), headquartered in Britain, and with a presence in 52 countries. LCD is the world's largest NGO that works for disabled people.
Lord Clanwilliam, Patrick James Gillford (Independent Non Executive Director)
Patrick, age 50, started his business career with Hanson Plc. and was seconded to the Home Office to advise the Rt. Hon Douglas Hurd CBE, then Home Secretary. Later he returned to Hanson as Manager of Public Affairs until joining one of the UK's leading firms of lobbyists. From 2002 to 2005 he was the non-executive Chairman of the Board at Cleveland Bridge UK Ltd, Europe's leading bridge and large steel construction company. He is also on the Advisory Board of Cedar Partners, a fund of funds with over $2 billion under management, and a member of Board of Polyus Gold, Russia's largest gold producer.
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