Shares in Lionsgold Limited (LON:LION) roared into action on Wednesday after the explorer agreed terms which will see it become the majority owner of gold-focused financial tech company, TRAC Technology.
Lionsgold already had a 37% interest in the physical gold holding and trading exchange, but after today’s announcement its stake will increase to 55%, with chief executive Cameron Parry also snapping up a separate 5% holding.
READ:Lionsgold sees timelines in Finland and India pushed out
The AIM-quoted firm will dig into the funds it raised last month to pay £157,500 for 649 new shares at £242.72 apiece, while TRAC will convert £16,800 worth of debts owed to the company into equity.
Parry – who will become TRAC’s non-executive chairman when it all goes through – will pay just shy of £28,000 for his stake.
TRAC’s founder, Ralph Hazel, will stay on board as chief executive.
“We are delighted to report that Lionsgold has acquired a majority shareholding, in the gold-focused financial technology company behind ‘The Real Asset Company’ and ‘IndexGold’ brands, TRAC Technology Ltd,” said Parry.
“This transaction sees TRAC become a trading subsidiary under LION's group structure and is an important piece for delivering our vision of a gold exploration, production and application 'mine to market' business model.”
After the subscription today, TRAC will have around £220,000 in working capital which it will use to roll out a suite of alternative-banking gold-based products later this year.
This includes a pre-paid debit card linked to clients’ gold accounts and a banking-equivalent smartphone app, while a gold-backed cryptocurrency is planned for release in 2018.
LION shares jumped 7.5% to 1.08p.