BitGold Inc. (TSX-V: XAU) (“BitGold”), a platform for savings and
payments in gold, announces further information on the Acquisition
Agreement dated May 22, 2015 to purchase the operating and intellectual
property assets of GoldMoney Network Limited (“GoldMoney”), subject to
regulatory approvals and other customary closing conditions.
The acquisition is an arm’s length transaction. Consideration for the
acquisition is the issuance of 11.1 million common shares in BitGold
which will be distributed to the shareholders of GoldMoney with no new
insiders of BitGold. The reference to CAD$1.5 billion in vault assets
under administration refers to gold, silver, platinum and palladium
owned by customers and held in GoldMoney vaults on behalf of customers.
The following is a summary of the financial performance of the GoldMoney
business for the indicated periods.
|
|
Twelve Months Ended March 31
|
|
|
2011
(audited)
(£)
|
|
2012
(audited)
(£)
|
|
2013
(audited)
(£)
|
|
2014
(audited)
(£)
|
|
2015
(unaudited)(1)
(£)
|
|
Gross Value of Sales of Gold Grams and Currencies
|
|
237,065,580
|
|
431,142,576
|
|
224,740,275
|
|
193,991,824
|
|
107,294,000
|
|
Gross Value of Sales of Silver Ounces and Currencies
|
|
261,590,262
|
|
421,015,451
|
|
174,879,728
|
|
122,438,226
|
|
69,186,000
|
|
Gross Value of Sales of Platinum Grams and Currencies
|
|
12,098,260
|
|
13,108,379
|
|
6,636,868
|
|
4,304,178
|
|
3,891,000
|
|
Gross Value of Sales of Palladium Grams and Currencies
|
|
1,389,027
|
|
2,206,501
|
|
1,928,321
|
|
1,993,089
|
|
3,092,000
|
|
Storage Fee Income
|
|
3,502,525
|
|
5,509,749
|
|
5,310,756
|
|
2,464,112
|
|
2,140,000
|
|
Total Cost of Metals and Currencies Sold and Storage Fees
|
|
(504,340,686)
|
|
(854,864,415)
|
|
(404,754,157)
|
|
(321,018,155)
|
|
(182,677,000)
|
|
Net Operating Income (Gross Margin)
|
|
11,304,968
|
|
18,118,241
|
|
8,741,791
|
|
4,173,275
|
|
2,926,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Cash Flow (after movement of working capital)
|
|
5,134,916
|
|
949,280
|
|
2,176,154
|
|
(1,560,095)
|
|
(810,000)
|
|
Profit (Loss) for the financial year after tax (2)
|
|
9,503,445
|
|
7,341,584
|
|
332,516
|
|
(9,441,312)
|
|
(800,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Capital
|
|
20,229,963
|
|
26,032,483
|
|
24,725,488
|
|
13,598,365
|
|
12,906,000
|
|
Total Assets
|
|
22,393,165
|
|
26,952,015
|
|
26,270,025
|
|
14,687,579
|
|
13,660,000
|
|
Total Liabilities
|
|
1,993,816
|
|
707,529
|
|
839,608
|
|
797,319
|
|
572,000
|
|
Dividend
|
|
1,498,644
|
|
2,009,340
|
|
1,612,420
|
|
1,236,477
|
|
N/A
|
|
Notes:
(1) Based on unaudited financial information subject to audit.
(2) Profit (Loss) for the financial year includes certain
gains and losses on unhedged metal inventories which is not a recurring
business for BitGold. In addition, in 2014 certain software assets were
written down.
In addition to the operating assets and intellectual property assets to
be acquired, BitGold will assume USD$3.0 million in working capital. The
pro forma entity is expected to have approximately CAD$12.5 million in
working capital and no debt, with up to CAD$5.5 million in additional
capital to be received from the conversion of in the money warrants
outstanding. At the time of closing a special distribution will be made
to GoldMoney shareholders for the remaining GoldMoney working capital.
GoldMoney will have the right to appoint three directors for a period of
three years immediately after closing. Mr. Mahendra Naik will join the
board of directors of BitGold immediately upon the closing of the
GoldMoney acquisition, and James Turk and Hector Fleming will be
nominees for election of directors at a shareholder meeting of BitGold
to be held within ninety days of closing.
Mr. James Turk has over 40 years’ experience in international banking,
finance and investments. He began his career at The Chase Manhattan Bank
where he worked on assignments in Thailand, the Philippines and Hong
Kong. In 1983, he was appointed as manager of the Commodity Department
of the Abu Dhabi Investment Authority. After leaving that post in 1987,
he went on to hold various advisory roles in money management. In 2001
he co-founded GoldMoney and remains a director of the group. James makes
regular conference appearances around the world, provides commentary for
numerous publications and newswires as well as producing articles for
his website and GoldMoney.
Mr. Mahendra Naik, CA, CPA, is a Chartered Professional Accountant with
more than 32 years of financial accounting, mining and investment
company experience. Mr. Naik is President & CEO of FinSec Services Inc.,
a private management services company, and a director of GoldMoney. He
holds a Bachelor of Commerce degree from the University of Toronto. He
practiced as a Chartered Professional Accountant for nine years with a
major Canadian accounting firm. Mr. Naik is a director and member of the
Audit and Finance Committee of IAMGOLD Corporation, and Chairman of the
Board, Chairman of the Audit Committee and member of the Compensation
Committee of Fortune Minerals Inc., both diversified public minerals and
resources companies. In addition, Mr. Naik is a member of the
Compensation Committee of FirstGlobal Data Limited and of several large
private companies including GoldMoney Network Limited. Mr. Naik will be
appointed as Chair of the Audit Committee of BitGold.
Mr. Hector Fleming is a founder of Fleming Wulfsohn Africa Limited, a
private investment company, and has over 10 years of private equity
experience across Africa and other emerging markets. He is a director of
The Johannesburg Land Company Limited, Clover Alloys SA Limited,
GoldMoney Network Limited and Netagio Holdings Limited. Mr Fleming is a
former director of Standard Chartered Bank’s private equity coverage
team out of London with a central focus on Sub-Saharan Africa and was
previously in the banks’ private equity group, investing growth capital
from the bank’s balance sheet and third party funds into private equity
opportunities in the emerging Asian economies. He holds a BA (Hons) from
the University of Newcastle upon Tyne.
BitGold and GoldMoney will host a joint conference call on Tuesday, May
26th, further information to be released.
About BitGold
BitGold’s mission is to make gold accessible and useful in digital
payments and secure savings. The BitGold platform provides innovative
solutions to the challenge of transacting with fully allocated and
securely vaulted gold. BitGold accounts are free and convenient to open
by anyone, anywhere* in just minutes. BitGold provides users with a
secure vault account to purchase gold using a variety of electronic
payment methods. The platform will also provide transaction capability
including: instant cross-border gold payments, merchant invoicing and
processing for gold, debit card spending of gold at traditional points
of sale, conversions to a customer's external digital-wallet or bank,
and physical gold redemptions. All physical gold acquired through the
platform is owned by the customer, stored in vaults administered by The
Brink’s Company, acting through Brink’s Global Vault Services
International, Inc. (“Brink’s”), which insures gold through third party
insurance providers.
BitGold is a Canadian corporation with offices in Toronto, Canada, and
Milan, Italy. BitGold has partnered with established professionals in
bullion dealing, vault security and web security, payment processing,
and is committed to best-practice systems for compliance with all
applicable laws and regulations regarding anti-money Laundering (“AML”)
and Know Your Customer (“KYC”).
*The BitGold Platform will not initially be available to U.S.
Residents and will be unavailable to residents of sanctioned countries
About GoldMoney
GoldMoney is a gold and precious metals vaulting business founded in
2001 by James Turk and Geoff Turk. GoldMoney offers an easy way to buy
gold, silver, platinum and palladium online and safely store for
customers these precious metals in five countries. It is GoldMoney’s
vision that the benefits and dependability of gold and silver should be
easily available to everyone, while providing its customers with
assurances of integrity so they know their money is safe.
No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein. Neither
the TSX-V nor its Regulation Services Provider (as that term is defined
in the policies of the TSX-V) accepts responsibility for the adequacy of
this release.
Forward-Looking Statements
This news release contains certain “forward-looking information”
within the meaning of applicable Canadian securities laws that are based
on expectations, estimates and projections as at the date of this news
release. Any statements that involve discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions, future events or performance (often but not always using
phrases such as “expects”, or “does not expect”, “is expected”,
“anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”,
“forecasts”, “estimates”, “believes” or “intends” or variations of such
words and phrases or stating that certain actions, events or results
“may” or “could”, “would”, “might” or “will” be taken to occur or be
achieved) are not statements of historical fact and may be
forward-looking information and are intended to identify forward-looking
information. This forward-looking information is based on reasonable
assumptions and estimates of management of the Company at the time it
was made, and involves known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements
of the Company to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
information. Such factors include, among others: risk factors relating
to the acquisition of GoldMoney, being satisfaction of closing
conditions, receipt of regulatory approvals and, generally, the
completion of the acquisition on the terms as described if at all; the
Company’s limited operating history; future capital needs and
uncertainty of additional financing; the competitive nature of the
industry; unproven markets for the Company’s product offering;
volatility of gold prices & public interest in gold investment; lack of
regulation and customer protection; the need for the Company to manage
its planned growth and expansion; the effects of product development and
need for continued technology change; protection of proprietary rights;
the effect of government regulation and compliance on the Company and
the industry; network security risks; the ability of the Company to
maintain properly working systems; foreign currency and gold trading
risks; use and storage of personal information and compliance with
privacy laws; use of the Company’s services for improper or illegal
purposes; global economic and financial market conditions; uninsurable
risks; and those risks set out in the Company’s public documents filed
on www.sedar.com.
Although the Company has attempted to identify important factors that
could cause actual results to differ materially, there may be other
factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will prove to
be accurate as actual results and future events could differ materially
from those anticipated in such statements. Accordingly, readers should
not place undue reliance on forward-looking information. The Company
undertakes no obligation to revise or update any forward-looking
information other than as required by law.
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