Lionsgold ups stake in TRAC, to launch new gold-based banking products

JOHANNESBURG (miningweekly.com) – Aim-listed explorer Lionsgold has acquired a majority shareholding in gold-focused technology firm TRAC Technology, which is seen as an important piece for delivering on the company’s ‘mine-to-market’ business model.

TRAC – the UK company behind ‘The Real Asset Company’ and ‘IndexGold’ brands – will now be a trading subsidiary under LION’s group structure.

"TRAC is currently a small business with established banking and regulatory associations that provide the foundation of an exciting opportunity for LION, and while 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,” CEO Cameron Parry commented on Wednesday.

TRAC, which would retain the services of its founder Ralph Hazel, aimed to roll out as suite of alternative-banking gold-based products during the second half of the year, including a direct debit card and mobile phone banking-style app, as well as developing a gold-backed cryptocurrency planned for release during 2018.

TRAC would initially focus on increasing traction in the UK market, after which it would aim to leverage off Lionsgold's India network of contacts with a view to delivering certain products to the India market.

Having acquired initially a 27.3% shareholding in TRAC as announced in November, in conjunction with entering into a joint venture (JV) targeting the India market in May, 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 increase its holding to 37.7%. Lionsgold has now agreed to inject new working capital into TRAC while converting some debt owed to equity and seeing LION increase its shareholding to a 55% ownership position. 

Concurrently, Parry has agreed to acquire 5% of TRAC and to join the board of TRAC as nonexecutive chairperson to lead corporate strategy.

Together with the balance of unspent funds available from capitalising the India JV and the new funds from Lionsgold and Parry, TRAC has about £220 000 in working capital.