TIDMLION
RNS Number : 9409G
Lionsgold Limited
09 November 2018
Lionsgold Limited
("Lionsgold", "LION" or the "Company")
Mining and Exploration Assets Update
Lionsgold (LSE: LION), the gold company focused on the
exploration, production and retail application of physical gold,
including the development of physical gold as a currency, is
pleased to provide the following update in relation to its gold
exploration and mining interests.
Over the course of 2018, Lionsgold has continued to support its
partners in both India and Finland; one being a leading Indian gold
exploration company, Geomysore Services India Limited
("Geomysore"), and the other Lionsgold's Finnish Joint Venture
("JV") company, Kalevala Gold Oy ("Kalevala").
Cameron Parry, Chief Executive Officer, commented: "It has been
a constructive year in relation to our two most developed projects,
being Jonnagiri in India, and Kuikka in Finland. The teams on the
ground have each achieved significant progress, albeit at times
under challenging circumstances.
At Jonnagiri, lengthy neogiations with some 600 landowners have
advanced to Geomysore now having completed lease agreements and
payments for approximately 1,300 acres with circa 150 acres to
conclude. In addition, Geomysore has now received consent letters
for the purchase of approximately 227.5 acres at commercially
acceptable prices, out of the 350 acreas intended to be acquired to
commence the mine build - noting that of the balance remaining, 27
acres is government land and Geomysore owns 6 acres, thus there is
90 acres left to secure.
In Finland, the licence application process continues with
regard to a 5,000 - 7,000 tonne bulk sample being taken at Kuikka
and processed, whilst concurrently application is progressing for
small scale underground mining of the high grade deposit at Kuikka.
In relation to the 200 tonnes of gold ore approved for equipment
testing use, after overcoming some personal health issues
encountered by the two team leaders, Kalevala is now in the process
of melting and pouring the gold concentrate at their facility near
Joensuu and members of the Lionsgold team are visiting next week to
observe the process and discuss plans for 2019.
Lionsgold has continued to provide its share of funding support
during the course of this calendar and has increased its
shareholding in Geomysore to 21.92% and increased its shareholding
in Kalevala to 32.4%. We are pleased and proud of our partners in
India and thankful to the team in Finland for all of their efforts
this year and what they have achieved. We look forward to
continuing our work together in the new year."
India Gold Summary
Lionsgold has a diversified set of interests in exploration and
mining projects in India through its 21.92% shareholding in
Geomysore Services India Pvt Limited. Geomysore holds exploration
rights covering in excess of 900km(2) in India including a granted
30-year mining lease ("ML") at Jonnagiri covering 6km(2) . The
Jonnagiri Gold Project ("Jonnagiri Mine") is situated in the state
of Andhra Pradesh and is Geomysore's most advanced project. An NI
43--101 compliant Feasibility Study was completed in late 2017
("Feasibility Study") resulting in a decision to mine. The team are
focused on securing and structuring the required finance to
facilitate the purchase of the ML area and development of mine and
associated infrastructure, to see the Jonnagiri mine be the first
privately owned and operated gold mine in India. At full production
Jonnagiri is forecast to produce approximately 25,000 ounces of
gold per annum.
As detailed in the Feasibility Study, the Jonnagiri Mine Base
Case production profile is based on the 151,020 Probable Reserve
gold ounces currently and shows a Net Present Value of USD$28.2
million (pre-tax) (based on USD$1 = INR67.08 at time of the study)
applying an 8.48% discounted cash flow rate. The Internal Rate of
Return (IRR) for the Base Case is 24.0% pre-tax and 17.8%
post-tax.
Further detailed in the Feasibility Study, the Jonnagiri Mine
Total Production Case, which includes the processing of low grade
stockpiles and the Inferred Resource within the optimised pit
shell, produces an NPV of USD$34.9 million (pre-tax) applying an
8.48% discounted cash flow rate. The IRR for the Total Production
Case is 28.0% pre-tax and 20.9% post-tax.
In addition to Jonnagiri, Geomysore's portfolio contains
numerous exploration and development targets and its South Kolar
Project ("South Kolar"), situated in the Southern part of the Kolar
Gold Field (which historically produced 25 million ounces of gold
over 100 years of operation), located in the state of Andhra
Pradesh, represents the next target contemplated for mine
development. The South Kolar target has been refined to an area
covering approximately 10km(2) , and Geomysore has signed a
Memorandum of Understanding with the government of Andhra Pradesh
to progress development of the area into commercially viable mine
and Geomysore is currently pursuing its Mining Lease Application
with the Ministry of Mines in New Delhi.
Finland Gold Summary
Lionsgold's Finnish JV company, Kalevala, holds approximately
1,500km(2) of gold prospective ground in Finland, including over
90% of the Suomussalmi Greenstone Belt and significant coverage of
the Kuhmo Greenstone Belt. Located immediately south of the
Suomussalmi Greenstone Belt where Kalevala's Kuikka Gold Deposit is
hosted, the Kuhmo Greenstone Belt is the largest Archaean
greenstone belt in Finland, being up to 10km wide and more than
100km from north to south.
The Kuikka Gold Deposit ("Kuikka") is located within the Syrjälä
Project area on the prospective Suomussalmi Greenstone Belt.
Originally defined by 4,359m of diamond core drilling undertaken by
the Geological Survey of Finland (GTK) and the Finnish company
Outokumpu Mining, Kuikka was subject to a further 937 metres of
infill RAB drilling carried out by Lionsgold JV partner Mineral
Exploration Network (Finland) Ltd ("MENF") in 2016.
During 2017 work at Kuikka concentrated on detailed planning,
mapping and further grade confirmation drilling as part of the
environmental permitting and optimisation of the bulk sampling
programme. An additional 22 inclined RAB drill holes were drilled
to help refine understanding of the morphology of the central vein
and parallel gold mineralisation, to a depth of up to 10m, within
the envelope of the planned bulk sample. This work was completed
ahead of equipment testing that took place in 2018 on 200 tonnes of
gold ore and a targeted box-cut bulk sampling programme. A
small-scale high-grade underground mining will be potentially
permitted to occur in 2019.
The technical information in this statement which relates to the
Feasibility Study on Jonnagiri is based on information compiled by
Mr Gordon Cunningham who is a full-time consultant with Turnberry
Projects Pty Ltd (Johannesburg, South Africa), a Professional
Engineer with the Engineering Council of South Africa and a Fellow
of the South African Institute of Mining and Metallurgy. Mr
Cunningham, as lead FS consultant, consents to the publishing of
the information in relation to the FS in the form and context in
which it appears.
Enquiries:
Lionsgold Limited Tel: +44 (0)20 8065 0215
Cameron Parry (Chief Executive Officer)
WH Ireland Limited (Nominated Adviser) Tel: +44 (0)207 220 1666
James Joyce/Chris Viggor
Smaller Company Capital Limited (Broker) Tel: +44 (0)20 3651 2911
Rupert Williams / Jeremy Woodgate
About LIONSGOLD Limited (LSE: LION)
Lionsgold is a London Stock Exchange AIM market quoted,
gold-focused company involved in the exploration, production and
retail application of physical gold, with gold assets in India and
Finland and a wholly owned financial technology company developing
physical gold as a currency.
Lionsgold's three core focuses are:
-- Strategic partnership with leading India gold exploration and
mine development company, Geomysore, in which Lionsgold holds
22%;
-- Developing physical gold as a currency under its wholly owned
financial technology subsidiary and 12.5% holding in banking
platform developer Railsbank Technology Ltd, to enable customers to
utilise their own physical gold with the convenience of everyday
banking via the international banking system; and
-- Gold exploration and production in Finland via 32% ownership of Finnish joint venture.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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