Western Australian Miners Join Net Gold Rush
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Mining exploration company Livingstone Resources NL has joined a long list of Australian mining companies investing in Net-related companies with its acquisition of specialist ISP Netlink.
The purchase consideration is for AUS$300,000 (US$190,000) in cash, together with the issue of 11.5 million Livingstone shares and 11.5 million options, valuing Netlink at around AUS$7 million (US$4.5 million) based on prices before the announcement. A formal sale agreement is set to be completed by July 2.
Livingstone MD's Richard Chua said the company's decision to expand into IT reflected the continuing depressed commodities market, and difficult conditions for raising capital for exploration projects.
"However, our proposal can be distinguished from other recent technology-based acquisitions in that Netlink's business has a strong trading history and is already generating profits, whilst maintaining an exploration focus, retaining our gold and diamond exploration interests alongside a new IT division," Chua said.
"System planning, network integration and ISP activities provide considerable scope for growth, particularly for small businesses as they increasingly embrace the and e-commerce as a fundamental component of their daily business activities," said Chua.
Netlink's existing management will continue to operate the business and will enter into a three year management agreement with Livingstone Resources NL.