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(LION) Lionsgold ltd Share Chat

Discussion in 'General Share Chat (LION)' started by BrassTacks1, Feb 29, 2016.

  1. BrassTacks1

    BrassTacks1 Paid-up Member Moderator

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    Have just taken a punt on KGLD and shall post any research I find.
     
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  2. Monkeyman

    Monkeyman Demi God of BlueShare

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    BrassTacks1 likes this.
  3. Monkeyman

    Monkeyman Demi God of BlueShare

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  4. Monkeyman

    Monkeyman Demi God of BlueShare

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    What was your buy today if u don't mind me asking most were showing as sells.
    I have been told not a lot of stock about
     
  5. BrassTacks1

    BrassTacks1 Paid-up Member Moderator

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    Just a £2k punt
     
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  6. BrassTacks1

    BrassTacks1 Paid-up Member Moderator

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    Here's Monkeyman's link on KGLD from Sharepicking:


    KOLAR GOLD (KGLD) RESEARCH NOTES

    Kolar Gold (KGLD)



    Overview
    Market Cap: £1.22M

    Current SP: 1.15p

    Shares in issue: 106,293,537

    Not in public hands: 22.1%

    [​IMG]

    • Nick Spencer (CEO) purchased 340,000 ordinary shares in the company at an average price of 3.12p on July 23rd 2014 – Purchase price 1.9p above current SP – incentive to perform
    • No outstanding warrants as of 30 March 2015
    Conclusions
    Estimated valuation
    • GMSI investment worth est £2.83m (Dec 2014)
    • Cash in bank of £1.97m (March 2015) less assumed further investment in GMSI of £207,000 in March & May 2015
    • Estimated value as of Nov 2015 = 2.83 + 1.97 – 0.21 – 0.5 (est. 2015 operating cost) = > £4m
    • Current value > £2.5m ABOVE current MC with potential to realise MUCH more should any of the proposals (below) go ahead
    • Broker note in Dec 2013 from N+1 Singer stated that it is difficult to quantify the impact of the proposed DGM AIR merger so has estimated Kolar’s value at £17m or about 16p per share – This may be an underestimate but even at 16p this is x 13.9 today’s SP
    • Happy to take a chance on this potential multi-bagger given current risk / reward scenario
    Notes from website
    • “Kolar Gold (KG) is a gold exploration and development company… focused primarily on the Kolar Gold Field region to the east of Bangalore in India”
    • “Mining at Kolar Gold Field’s has operated for over 120 years and produced approximately 25M oz of gold at an average grade of 15.9 g/t. BGML (Bharat Gold Mines Ltd.) mined near vertical lodes over a strike length of 7.3 km to a maximum depth of 3200 metres and developed 1400 km of tunnels and 100 shafts” – prolific over time
    • “The mine became uneconomic in the late 1990’s due to poor management, exploration, underinvestment, and the focus on labour-intensive deep underground mining leading to the abandonment of mining operations in 2001″
     
  7. BrassTacks1

    BrassTacks1 Paid-up Member Moderator

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    cont.

    Location
    • “The Kolar Belt covers a 3km – 6km wide by 80km long Greenstone Belt”
    • “Exploration to date has established evidence for extensions and repetitions of the known gold lodes associated with main Kolar Gold Field and other mines in the Kolar Belt with a total of 34 known prospects, deposits or mines; 32 of which are within Kolar Gold optioned tenements or applications”
    [​IMG]

    Company
    • “Highly qualified board and senior management team with extensive experience in the exploration, evaluation and development of gold projects, together with a wealth of capital markets and board level expertise”
    • Senior manager on site is Philip Dingle who “worked for BGML in the Kolar Gold Fields from 1976 to 1997 as a Mining Engineer and as General Foreman. Between 1997 and 2003 he also worked in senior positions of Project Manager and Mines Manager with the Mine Construction (India) Limited and Thunghabhadra Minerals Ltd.” 30+ years in operating and managing underground and open pit mining
    Partners
    Geomysore Services India Pvt Ltd (GMSI) – Technical Partner (Leases)
    Junior gold exploration company

    • Large portfolio of gold tenements – Engaged in exploration since 2000
    • Explored 18,000km² of the area and identified 34 mineralized blocks
    • Kolar entered into GMSI Agreements to secure rights over a number of the Kolar Gold Projects
    • Exercise of Kolar Gold’s options will be subject to Government approval
    SUN Group – Mining Partner
    • Agreed to provide services to KG in return for Ordinary Shares. Shiv Khemka, VC of Sun, is a non-exec director of KG
    • Investor & PE fund manager in Russia, India and emerging markets – know the market
    • Long-term 20% shareholder in GMSI and the gold exploration and development potential of India
    • 11% shareholder in Kolar Gold (Largest holder) – high interest in positive outcome for Kolar and for GMSI
    • Experience in mineral exploration & production, capital markets and M&A in emerging markets
    Mining Associates – Independent Consultant
    Specialist geological and mining consultancy based in Hong Kong

    Ausenco – Engineering Partner
    Engineering services for big clients including BHP Biliton, Glencore, Anglo-American

    History
    • “Gold production in India is currently around 95,000 – 130,000 oz / annum from both primary gold production and by-product secondary gold. Hutti Gold Mines Company Limited is the only significant primary gold producer with an annual output of some 95,000 oz” – proposals below would create a leading player in the Indian gold market – possibly THE leading player
    Exploration
    • “Detailed surface exploration, target definition and testing is required and has been commenced in South Kolar”
    • “Gold mineralisation within the Greenstone Belts of India is widespread but economic deposits are volumetrically small and discrete in part due to the lower level of exploration activity. A great deal of persistence, soundly based geochemical, geological and structural targeting, use of geophysics where appropriate and drilling under cover and at depth will be required to define significant economic mineral resources”
    • “Drill targets have previously been identified”
    “The objectives of the current work on the South Kolar exploration lease will be as follows:

    • To confirm the validity of historical drilling results by drilling confirmatory drill holes
    • To provide sufficient drilling to allow a JORC compliant resource at inferred / indicated status for known gold mineralisation at Mallappakonda and Chigargunta NE
    • To undertake exploration drilling to identify extensions of existing deposits and new zones of gold mineralisation either along strike or within new areas of prospective geology”
    Target Acquisitions
    Chigargunta Mine
    • Lapsed Mining Lease previously held by BGML
    • GMSI has a Mining Lease Application (GML 6) over the mine site and this Mining Lease Application is part of the Agreements between Kolar Gold Limited and GMSI
    • Application still in process and the future ownership of this mine is not yet determined
    • Past production is estimated at 50,000 oz of gold from six shafts.
    “A single lease of over 5,000 ha in the centre of the KGF was granted in 1993 for 20 years… The mine was closed in 2001. These BGML leases are currently subject to a legal process involving the Government of India (GOI), local government and the Indian courts which will determine whether the BGML Assets go out to tender. The Directors believe that the legal process will result in a tender for sale of the BGML assets, and if so… intend to continue to pursue the acquisition”

    Exploration Target
    Central Kolar BGML Mine
    • 2M to 10M oz gold across all areas, underground, open pit and tailings
    What’s in Kolar Gold for shareholders in 2015 / 16?
    GMSI
    • December 2013 – Deccan Gold Mines (DGM), listed on the Bombay Stock Exchange – MC $22m, announced that its board had given an in-principle approval for an amalgamation of DGM and Australia India Resources (AIR) – the largest shareholder in GMSI.
    • DGM are the only gold-miner listed on the BSE
    • DGM has a number of gold mining assets, key amongst them being the Ganajur Prospect Licence, which has 308k ounces of JORC Resource confirmed and a final stage mining lease application pending.
    • Upon completion of the proposed amalgamation DGM will own and control AIR’s interests in GMSI.
    • DGM has given in-principle approval for the acquisition of the remaining 62.45% equity interests in GMSI not held by AIR, including Kolar Gold’s shareholding in GMSI.
    • Since the announcement of the proposed merger, GMSI and DGM have been preparing their respective companies’ valuations and proposed share swap ratios together with the scheme for approval by the Indian court. It is Kolar Gold’s understanding that the scheme is almost fully prepared.
    • Kolar Gold understand the merger would require new funding to be raised to finance the activities of the enlarged group. The Board of Kolar Gold believes that the proposed merger between GMSI and DGM and the associated fund raising will create a unique, significant and potentially well capitalised listed gold mining and exploration player in India.
    • If the transaction is completed Kolar Gold will own a proportional stake in the merged, listed entity. It is likely that Kolar Gold, together with other major GMSI shareholders, will have the opportunity to invest in the merged DGM/GMSI entity.
    • Shareholders should note, however, that the Board of Kolar Gold has not received any firm proposal for it to consider in relation to the proposed merger.
    • Kolar Gold has given no commitment or undertaking that it will participate in the DGM/GMSI funding from its existing cash resources.
    In summary this means DGM will merge with AIR, giving DGM an approx 37.55% stake in GMSI and it wants the other 62.45% too. Kolar would then become a substantial shareholder in DGM.

    Half-year results – 30th March 2015
    The company had:

    • Shareholding in GMSI of 25.9%, reducing to 23.77% following the finalisation of a drilling program where the drillers are paid in shares (expected Q3-15)
    • The right to subscribe for up to an additional 88,681 shares, at INR 1444.50 each (~£1.3m) until 25th November 2015. If all subscriptions are made this would increase the Company’s stake in GMSI to 30.2%
    • Note – subscription date is NOV 2015! – Would expect Kolar to subscribe – RNS this month? If the merger was then to go ahead then what was a 30% stake in GMSI would hope to be worth far more as an investment in DGM
    • On publication of the report below (30 March 2015) the merger and listing on the BSE is expected to take place in THIS CALENDAR YEAR
    [​IMG]

    • Right of First Refusal, in association with BGML ex-employees, to acquire the BGML mining assets through a tender process to be held by the owner, the Government of India
    [​IMG]

    • Cash balances of £1.97m more than MC in cash alone (less subscriptions in GMSI and working expenditure in 2015)
    [​IMG]

    Nick Spencer –

    “Our three objectives remain:

    • Firstly to support and assist the resource drilling at the GMSI Jonnagiri gold mining lease. There are now 3 drill rigs operating in order to upgrade and extend the current gold resource with the aim to develop India’s first private gold mine operation
    • Secondly we are increasing our efforts to engage with the new Government of India to explain the urgent need for India to develop domestic gold mines and therefore to issue the BGML mine sale tender and revival
    • Lastly, discussions are continuing between GMSI and DGM to amalgamate the two companies, their respective projects and resources, by way of a scheme of arrangement, and for the combined group to be listed on the Bombay Stock Exchange. GMSI is also considering alternative strategies for listing on the BSE – Game changer!
    Achieving any of these objectives will enable a significant gold mining asset to be developed in India.”

    [​IMG]

    See chairman’s note above regarding potential fund raise

    ……………

    These are my own research notes. They should not be considered as advice and the information within should not be relied upon. Please do your own research.

    Disclosure – On the date of publication of this post I own shares in this company
     
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  8. BrassTacks1

    BrassTacks1 Paid-up Member Moderator

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    Also MM's link from the Times of India:

    Vedanta Ltd wins first ever auction of an Indian gold mine
    Rashmi Drolia, TNN | Feb 27, 2016, 12.12PM IST
    Chhattisgarh on Friday night earned the distinction of auctioning its first gold mine in India with Vedanta Private Limited quoting the highest bid of 12.55 per cent of IBM (Indian Bureau of Mining) price of Rupees 74,712/ troy ounce (1 troy ounce = 31.10 gram) to win the gold mine against three other bidders.

    The successful auction of gold mine of Baghmara at Sonakhan in Balodabazaar-Bhatapara district took place on February 26 for 13 hours from 11am to 11.47 pm when the final bid was stamped upon. It is the first gold mine auctioned in the country, for grant of composite license (prospecting license-cum-mining lease) since enforcement of new amendment in Mines and Minerals (Development and Regulation) Act 2015.

    The mine, with a reserve of 2700 kg, is expected to earn more than Rupees 81.40 crores to Chhattisgarh in addition to existing royalty of Rs 24.70 crores.

    Earlier, on February 18 successful auction of mining lease was granted for Karhi Chandi limestone block in Baloda Bazaar and on February 19 Kesla limestone block in Raipur district. Karhi Chandi limestone block also earned the distinction of becoming the first non-coal mining lease to be auctioned in India. Like previous two limestone auctions, Baghmara also saw aggressive bidding.

    Expressing pleasure over the move, Chhattisgarh chief minister and minister for mining Dr Raman Singh told TOI, "Chhattisgarh is blessed with mineral resources and mines, while it has been known for iron-ore, coal, bauxite and limestone, commencement of gold mine would be a huge attraction for industries and for revenue generation which would earn the state with new kind of development and name. The ease of business here is the uniqueness we offer that attracts industries to Chhattisgarh."

    Talking to TOI, Subodh Singh, state Secretary mines (IAS) said, "Baghmara gold mine will contribute towards India's target to reduce gold import. State government notified auction of four limestone blocks and Baghmara gold mine on 8th December 2015. Among the four bidders for gold mine were Krishna Global Mineral Limited, Rungta Mines Limited, Sainik Mining and Allied Services Limited and Vedanta Limited, and after submission of over 160 bids, the latter one fixed it highest on 12.55 per cent of IBM price."

    With transparent method of allocation of mineral resources with less time of just four months it is the best age of doing business in state. Auction of this mine will enhance the gold, gems business and employment potential would also be generated from exploration and mining. Interestingly, the place's name itself is Sonakhan which indicate that ancient people were aware about existing gold mine there, Singh said.

    Baghmara mine has an area of 608 ha located in eastern part of Balodabazar-Bhatapara district, and is about 130 km northeast of Raipur. The gold deposit was previously explored between 1981 and 1990 by the directorate of Geology and Mining, of erstwhile state of Madhya Pradesh.

    Singh explained that the level of exploration undertaken so far falls under the G3 category as defined in the Minerals (Evidence of Mineral Contents) Rules, 2015 and therefore it was qualified to be auctioned as a composite license. Based on the exploration and available reports 2,700 kg of gold metal content was estimated. The winner of composite license will carry out detailed exploration to take the deposit to a G2 category as stipulated in the Minerals (Evidence of Mineral Contents) Rules, 2015.

    The other two limestone mines at Mohra East and Mangsa Pauni Khauna are in the queue this year for auction while next year Chhattisgarh plans more iron-ore, bauxite, limestone mines for auction.
     
  9. BrassTacks1

    BrassTacks1 Paid-up Member Moderator

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    Kolar gets a mention :

    India’s Gold Mines Reincarnated

    February 29th, 2016 by Steven Cochran

    [​IMG]India has long been one of, if not THE, largest consumers of gold. However, with practically all of it being imported, the hit to the Indian trade balance is second only to oil. In an effort to reduce the trade deficit and encourage local industry, the Indian government is leasing out parcels containing old Victorian era gold mines, or known deposits that were never developed.

    The first big step in the return of private industry to gold mining in India occurred last week with the historic first auction of a gold mine by the Indian government. The government in New Delhi plans on auctioning at least two more gold mines this year, as well as a number of base metal and mineral mines.


    [​IMG]

    India is home to some of the world’s most ancient gold mines, proving that the yellow metal has been favored by the people in the Indian subcontinent for millennia. Some of these ancient gold mines, abandoned for centuries, can still be found. Many gold mining companies thrived during the British occupation of India, shipping the gold straight to London. By the early 1900s, declining yields and low prices forced them all to shut down. Today, the landscape in the old gold-bearing regions are dotted with abandoned Victorian-era mines, as well as simple, pre-colonization mines. Only one, state-run, gold mining company is still in operation.

    In an effort to boost the domestic economy, the Indian government embarked on a plan to offer the mineral rights to 100 different parcels of land at auction to private firms. This is the first time since their independence from Britain that the Indian government has opened mineral exploration to private companies.

    [​IMG]The first gold mining auction took place last week, when Indian billionaire Anil Agarwal’s Vedanta Resources emerged the winner in a grueling, 13-hour open auction that saw 160 separate bids from four competitors. The area, known as the Baghmara gold deposit in the state of Chhattisgarh, has been known to contain gold since the ancient times, but has never been properly worked. The winning bid was made on the basis of government surveys from 1981 to 1990.

    One of the next gold leases will be in The Kolar Gold Fields, the site of gold mining from ancient times to the modern era. The last gold mining operation, also owned by the state, was shut down in 2001 due to rising costs. Kolar was a big gold mining area in the 1800s, after the British discovered the old, ancient mines.

    This new wave of public-private mining ventures by the Modi government are aimed at revitalizing the domestic minerals and metals industries, using the technology and experience of modern mining companies. When the mines in Baghmara and Kolar start pouring gold, Indians will once again have the ability to gift native gold to loved ones and temples.
     
  10. BrassTacks1

    BrassTacks1 Paid-up Member Moderator

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    Hard to find real intel on this stock.
     
    Last edited: Mar 4, 2016
  11. BrassTacks1

    BrassTacks1 Paid-up Member Moderator

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    At least they have a NOMAD !

    29 February 2012


    Kolar Gold Limited


    ("KGL" or the "Company")


    Change of Adviser


    Kolar Gold Limited, the Indian focussed gold exploration and mine development company announces the appointment of Singer Capital Markets Limited as Nominated Adviser and Joint Corporate Broker (alongside Ocean Equities Limited) to the Company with immediate effect.
     
  12. BrassTacks1

    BrassTacks1 Paid-up Member Moderator

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    Morningstar SH details

    KGLD.png
     
  13. Greets

    Greets Small time investor

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    Brasstacks, some good research. When I looked these are what I considered the risks.

    • Potential problem with mining licences being put out to tender. KGLD might not get licence.
    • KGLD is basically a co-operative. Nothing wrong with that but if up against a company that is focused on shareholder value and not looking after the workers will they get the licences if go to tender?
    • Lack of investment
    • Seems to have been chugging along since 2004 waiting for something to happen.
    • Recent RNS released about licence issue basically said KGLD didn't know if licence would be auctioned
    • Workers working for no pay, being paid in shares. Poor Indians probably have no choice - do nothing and get nothing or do something and hope they are lucky
    • CEO bought 340,000 of shares for c£10k in 2014. Now worth c£3k. Not much of an incentive to perform.

    I made the decision not to consider investing until some positive news about possibility of KGLD being awarded the mining licence.
     
    Latest Given Reputation Points:
    BrassTacks1: 5 Points (Many thanks Greets. Why would Paul Johnson want 3%?) Mar 5, 2016
    BigP likes this.
  14. Greets

    Greets Small time investor

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    Brasstacks - Why does PJ want 3%?

    Very good question, that is the only reason I looked at KGLD.

    Unfortunately I couldn't come up with a reason.

    You wouldn't try a takeover when the mine in the past has had labour issues with miners going on strike. This contributed to the mine stopping production. Now many of the miners have shares in the company.

    In the end I decided PJ investing £30k is like me investing £1k. It's a punt but his wealth means £30k to him is the same as £1k to me.

    I am waiting and watching to see what happens.
     
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  15. BrassTacks1

    BrassTacks1 Paid-up Member Moderator

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    Thanks Greets. Very good points.

    These were Monkeyman's recent comments:

    On another note PJ also taken big stake in KGLD, this has mcap below cash
    These bombed out Natural resource Co are all looking at fintech. This is guesswork but PJ was talking about fintech and ownership of gold from mine to owner. He was talking about India a country that has lots of gold and is passed down . The link here of course is that Kolar gold KGLD has lots of Indian mines, the new CEO has tech background, PJ has bought large
     
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  16. Monkeyman

    Monkeyman Demi God of BlueShare

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    Indeed don't quoting that beyond blueshare, it is speculation and I have put 2+2 together, but it may not happen.
    My reasons for investing simply
    1) PJ buys interesting sign- great at buying at bottom and most shares he has bought at bottom have inc in value.
    2)Not many shares and I believe they are short of stock - again keep here. I believe the current offer period is why they are working out who owns the shares and where they are- again for here
    3) I know someone who has met Havinder was very impressed with his vision for change this will be highlighted after strat review
    4) if they hand money back to SH for assets worth about 3.5p

    every time I have bought share price goes up a lot
     
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  17. Monkeyman

    Monkeyman Demi God of BlueShare

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    I would also add with the government now seem to be moving forward with auctions, and gold price has increased another reason to buy
     
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  18. Greets

    Greets Small time investor

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    This clip dated 1st March 2016 states the Kolar mine is opening again.



    Can anybody understand and post the main points?
    Does it mention KGLD or is it about the auction process?

    It does seem to imply something is happening.
     
    BrassTacks1 likes this.
  19. westa2

    westa2 A Legendary Member

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    I just tried to find that story on their website but couldn't see it.

    Although the title of the stories aren't in English if you look at the address bar on a story it seems to be the headline in English.

    Also couldn't not link you to this story - thought for a second you had started working for this news agency!

    http://publictv.in/benefits-given-to-agriculture-and-health-sector-by-union-budget-2016/
     
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  20. BrassTacks1

    BrassTacks1 Paid-up Member Moderator

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    This is the latest I can find 4th March 16

    From the Asian Age

    (A crore is equal to 10m Indian rupees around $214432 US)

    After 15 years, Kolar Gold Fields may be mined again
    Mar 04, 2016 - B.R. Srikanth |

    For thousands of families of this mining town, this year’s Independence Day could well stand for independence from abject poverty as the quest for gold will resume through a joint venture forged between the state government, a company launched by former employees of Bharat Gold Mines Ltd, and a special purpose vehicle consisting of an Australian mining company and several foreign financial institutions.

    The SPV has agreed to infuse funds to the tune of Rs 1,200 crores through FDI for shallow mining of gold, besides squeezing out the metal from more than 13 million tonnes of tailings (known in local parlance as “Cyanine dumps”), a move which would renew employment for at least 1,200 former employees of BGML or their kin after a gap of 15 years. That’s not all. More than 3,000 former employees would get dues to the tune of Rs 52 crores. “I think August 15 will be an auspicious day to start mining operations because formal approvals by the single window agency and the state high level clearance committee will take a couple of months,” Mr G. Jayakumar, chief executive and director, JMJ Minerals Pvt Ltd, a firm launched by former emp-loyees of BGML, said.

    He said while the tailings alone could yield gold estimated at a whopping Rs 25, 000 crores, the new enterprise would extract between three to 12 grams of gold from a ton of the ore through shallow mining (up to 300 feet) over the next 25 years. The state government would hold a major share in the new entity as it could, under section 17 (2) of the amended Mines and Minerals (Development and Regulation) Act, reserve an area for mining exclusively through a government company or corporation. “We submitted a memorandum to chief minister Siddaramaiah in January, describing the plight of impoverished ex-employees and their families, offered to work with the state government under a PPP model and bring in substantial investment and world-class technology with the help of the SPV. He made sure that we sign an expression of interest (EoI) with the state government during ‘Invest Karnataka-2016’, and also appointed a nodal officer to help us file investment proposals,” he added.

    Mr Jayakumar said the financial and technological consortium would invest Rs 500 crores in the first phase, and Rs 700 crores in the second phase. With investments of such quantum, headcount of the new enterprise could increase to 5000 in three years, but preference would be given to ex-employees of BGML or their kin. “Reviving mining will help the government earn revenue as royalty and income on its share in the joint venture while former employees will be rehabilitated. In fact, more than 1,500 people have died so far due to starvation after the closure of BGML, and infant mortality has also increased as all medical facilities were withdrawn with shutting down of mines in 2001,” he added.
     

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