Our Commodities Bureau in Mumbai, Business Standard, 12 July 2003 :
Deccan Gold Mines Ltd (DGML), India’s first listed gold exploration company, will make a rights issue for Rs 5 crore.
The issue will be in the ratio of 20 equity shares for every one share held by September-October 2003.
Addressing a press conference, Sandeep Lakhwara, executive director of the company, stated that letters of offers will be send to the existing shareholders after receiving regulatory approvals. The company currently has a share capital of Rs 24.50 lakh at a face value of Rs 10 each.
Post-rights issue, the capital will increase to Rs 514.5 lakh. DGML is promoted by Autralian Indian Resources (AIR), an Australia-based exploration group and is primarily held by Rama Mines (Mauritius Ltd).
RMML holds a 80 per cent stake in DGML. DGML came into existence by virtue of taking over Wimper Trading Ltd.
AIR was constituted in 1993 in Perth, Australia, with the sole purpose of undertaking gold and base metal exploration activities in some areas in India for gold and base metals.
AIR has to date invested Rs 10 crore in exploration activities in the country. All these funds have been provided through foreign sources and it will continue investing further for exploration if required.
AIR obtained the Foreign Investment Promotion Board approval to acquire a 100 per cent equity in GeoMysore Services (India) Pvt Ltd and other Indian subsidiaries which in turn hold reconnaissance permits (RPs) for large areas throughout India to undertake exploration activities.
These companies hold a total of 27 RPs and two prospecting licences spread over 9 states.
The RPs have been principally awarded for prospecting gold, nickel and diamonds for a period of three years.
The RP holder shall have the preferential right for obtaining a prospecting licence or mining lease for the tenement from the respective state government.
AIR’s strategy for GMSI is to undertake grass root exploration on gold prospects and when the prospects are sufficiently developed and have potential to lead a discovery, GMSI will transfer the prospect at a cost to DGML.
GMSI is in the process of transferring some of the advanced gold prospects to DGML at a cost.
These prospects offer the best potential to lead to discoveries but will require further exploration which will be undertaken by DGML with latest environmental-friendly mining techniques developed in countries like Australia.