Theta Gold Mines Ltd (ASX:TGM) (OTCQB:TGMGF) has invested A$700,000 in Bullion Asset Management Services Pte Ltd (BAM), a Singapore-based technology company focused on financing, tokenisation of physical gold bullion and precious metals trading.
The initial investment will make Theta Gold a top-five shareholder in BAM, with about 5% in BAM, together with the three largest shareholders, Decentralised Capital Pte Ltd, a related entity of Aura Group, and Jaggards Trading Pty Ltd, Australia’s oldest bullion and rare coin merchant, and DigitalX Ltd (ASX:DCC) (OTCMKTS:DGGXF) (FRA:VSL), a technology and digital asset management company.
This investment, via an all-scrip issue of Theta Gold shares, represents about 1.5% of its current issued capital (if all options are exercised) and brings to Theta a strategic partner in Asia that is at the forefront of bullion and precious metals trading and tokenisation.
Exposure to growing business
Theta Gold Mines chairman Bill Guy said: “This is a unique investment opportunity for Theta and gives us exposure to a rapidly growing bullion management business backed by Australia’s oldest and most reputable bullion and numismatic merchant, Jaggards, and ASX-listed blockchain technology expert and digital asset fund manager DigitalX.”
Theta Gold may opt-in to invest up to 50% of BAM’s future gold mining acquisitions (advance gold projects or operating mines) at any time up to December 31, 2025.
Transaction details
TGM will subscribe for A$700,000 worth of shares in BAM at an issue price of US$1.00 per share by the issue of Theta Gold shares at an issue price equal to the volume weighted average price for trades done on the Australian Securities Exchange for the 30 traded days prior to the issue date of the shares.
The initial subscription is expected to be settled on January 29, 2021, and the Theta Gold shares will be subject to a six-month voluntary escrow.
As part of the deal, Theta has the option to:
➢ Acquire a further 10% of BAM on or before January 17, 2022, taking its shareholding in BAM to around 15%
- First Option - Following the initial subscription, Theta Gold has the option to subscribe for a further A$700,000 worth of BAM shares, on or before April 17, 2021, at an issue price of US$1.00 per share by the issue of further Theta Gold shares at an issue price equal to the 30-days-VWAP prior to the issue date. The Theta Gold shares issued under the First Option will be subject to nine-months voluntary escrow.
- Second Option - Subject to Theta Gold exercising the First Option, the company has been granted a second option to subscribe for a further A$700,000 worth of BAM shares, on or before January 17, 2022, at an issue price of US$1.25 per share by the issue of further Theta Gold shares at an issue price equal to the 30-days-VWAP prior to the issue date.
➢ Appoint a non-Australian resident director to the board of BAM after January 17, 2023, if its shareholding in BAM exceeds 10% at that time;
➢ Co-invest in up to 50% of any future gold mining asset acquisitions (advance gold projects or operating mines) by BAM before December 31, 2025.
Theta Gold shares will be issued under the company’s placement capacity pursuant to Listing Rule 7.1.
Bullion Asset Management
BAM’s core business is to create a one-stop shop in financing, tokenisation and trading of gold and other precious metals. It delivers digital ownership of highly secure physical bullion to provide market participants with a low cost and liquid storage solution for the management of bullion and other assets.
BAM will service precious metal miners/developers, fund managers, gold bullion and precious metal dealers, digital asset investors and the decentralised finance sector.
All gold is vaulted, insured, audited, allocated and redeemable, and direct ownership is instantly transferable.
BAM has plans to launch other commodity backed products, including silver and other precious metals.
Its wholly-owned subsidiary, xbullion Holdings Ltd launched its very first 100% physical-gold-backed digital token GOLD in September 2020 on the Ethereum blockchain .
GOLD currently is already available for trade against numerous currencies including the Australian dollar, Singapore dollar, US dollar, and the Thai baht.
