Asidokona Mining Resources, the owner of Tolukuma mine, has put out a press release [see below] trying to calm fears over the proposed sale of the mine to a Singapore nightclub company and denying any profiteering.
Asidokona is a Singapore company owned by financial speculator Philip Soh Sai Kiang (also known as Soh Sai Kiang, Mr Soh and Mr Kiang). Asidokona is the sole shareholder and owner of Tolukuma Gold Mines Ltd which it bought from Petromin for around K80 million in November 2015.
Asidokona is now proposing to sell Tolukuma Gold Mines to another Singapore based company, LifeBrandz for US$212 million. But this will not signal the end of the involvement for Asidokona and Soh Sai Kiang, as LifeBrandz will pay for the purchase of Tolukuma Gold Mines by issuing shares in LifeBrandz to Asidokona. Asidokona will then become the largest shareholder in LifeBrandz which will in turn own TGM.
Asidokona denies any “exchange of cash or profiteering by the shareholders of ASK” but the simple truth is they are making a huge profit – selling a mine they bought from Petromin for K80 million to LifeBrandz in exchange for shares worth US$212 million (around K670 million), shares which they will then be free to sell for cash.
Rather tellingly, Asidokona says two of the main benefits of the sale will be be the short term funding of the mine and the recommencement of mining operations – a tacit admission that Petromin sold the mine to a company without the resources to fund the ongoing operations or reopen the mine!
Asidokona has not made any mention of what it will do about the pollution of the local river system with heavy metals, which has been described as a genocide for local people.
Interestingly, the press release also makes no mention of Soh Sai Kiang and his ownership of Asidokona or any mention of the value of the shares in LifeBrandz, $212 million, he will be receiving. It also makes no mention of who the other owners of LifeBrandz are.
Obviously there are some things Asidokona and Soh Sai Kiang would rather keep from the people of Central Province…
Tolukuma Mine acquisition strengthened by LifeBrandz input
Asidokona media release | PNG Loop | July 16, 2016
The proposed acquisition of the Tolukuma Mine in the Goilala District of Central Province has brought in an interested party to the table.
Lifebrandz Ltd (“LB”), a company listed on the Stock Exchange of Singapore (“SGX”), announced on July 13, 2016, it has entered into a Non-Binding Term Sheet (“Term Sheet”) with Asidokona Mining Resources Pte Ltd (“ASDK”), for the proposed acquisition of Tolukuma Gold Mines Ltd (“TGM”).
The Term Sheet also includes the requirement for LB to provide funds to TGM for its operations prior to the completion.
TGM is a wholly-owned subsidiary of ASDK. The announcement concerns a proposed acquisition and there has not been any sale or transfer of ownership in TGM, nor has there been any exchange of cash or profiteering by shareholders of ASDK.
The Term Sheet concerns an all share deal where LB will acquire TGM (the “Proposed Acquisition”). The Proposed Acquisition is subject to certain conditions, key being the recommencement of mining operations and the exploration programme currently underway at TGM.
If the conditions are met, the value of TGM will far exceed the value of LB and the resultant effect, should the Proposed Acquisition proceed, is that the shareholders of ASDK will become the majority shareholders of LB as the consideration will be paid for in new shares issued by LB.
Hence, TGM will be owned by a listed company that in itself will be majority owned by the current (and potentially future) shareholders of ASDK.
The nature of the Proposed Acquisition is commonly known as a Reverse Take-Over Exercise (“RTO”) and will still be subject to the necessary regulatory and supervisory authorities in Singapore.
The Proposed Acquisition is expected to be completed by June 2017.
EFFECTS OF THE PROPOSED ACQUISITION
The Proposed Acquisition will have the following effects:
1. Access to additional funding to TGM to support its operations in the short term and prior to completion of the Proposed Acquisition.
2. Recommencement of mining operations, creating stable employment for the Golaila community, income for the company, as well as royalties to landowners and the PNG government.
3. Upon completion, TGM will be owned by a listed company, meaning greater access to further capital for expansion. TGM intends to convert its surrounding exploration licences to Mining Leases and commence mining operations there.
4. TGM will be propelled onto the international financial stage, with PNG Nationals as senior executive management.
5. PNG will benefit from additional foreign direct investment, tax income, and royalities from expanded operations.
6. As a listed company in Singapore, transparency and integrity are key governance metrics which TGM will strictly abide by.
About Tolukuma Gold Mines Ltd
Tolukuma Gold Mines Ltd (“TGM”) is a company incorporated in Papua New Guinea (“PNG”) and the holder of mining lease No. 104 issued under the Mining Act 1992 of PNG (“Mining Lease 104”), located in the Golaila District of the Central Province. TGM has been in operation since 1995 and was acquired by Asidokona Mining Resources Pte Ltd on 30 November 2015. TGM also holds five (5) exploration licenses and one (1) exploration license under application.