TIDMLION
RNS Number : 0802K
Lionsgold Limited
04 July 2017
4 July 2017
Lionsgold Limited
Mining & Exploration Projects Update
Lionsgold Limited ("Lionsgold", "LION" or the "Company"), the
gold-focused exploration company with assets in India and Finland,
and significant shareholder of a physical gold holding and trading
exchange, provides the following update regarding its most advanced
projects in India and Finland, represented through its equity
interests in Geomysore Services India Pvt Ltd ("Geomysore") and
Kalevala Gold Oy ("Kalevala") respectively.
Jonnagiri Update
Further to the update on 31 May 2017, completion of the economic
feasibility study ("EFS") is now expected to be at the end of
July/early August 2017. This follows changes to the Indian tax
system that sees the implementation of a comprehensive goods and
services single tax (GST) across the country (the details of which
and the impact on the previous central excise and VAT system only
became known in late May 2017). The impact of these changes is
currently being factored in to the cashflow model of the EFS which
then requires cashflow analysis by an independent tax specialist
before the current draft of the EFS can be updated and signed
off.
In respect of the Mine Developer and Operator ("MDO")
discussions, bid documents have been sent to all parties that
registered an expression of interest, with technical bids expected
to be received in August. Once these have been received, it is
estimated that it will take two months to finalise an MDO contract
with the preferred bidder.
The impact of these revised timelines means that, subject to the
EFS resulting in a decision to mine, signing an MDO contract and
the purchasing of relevant land, the anticipated timing for gold
production to commence at Jonnagiri will move from the end of 2018
into 2019.
Kuikka Update
Preparatory work is underway ahead of the targeted bulk sampling
programme at Kuikka by our Finnish JV company, Kalevala Gold. The
proposed bulk sampling was originally anticipated to commence in Q3
this year. Part of the work required involves obtaining
environmental permitting to carry out the programme. The
environmental permitting application was submitted in May,
following confirmation that all relevant prospecting licences and
applications had been transferred to Kalevala. Whilst the exact
timeline for approval cannot be known, following recent dialogue
with the consultant handling the environmental application on
behalf of Kalevala, the Board believes it prudent to revise its
expectation that the earliest it is likely that Kalevala may obtain
environmental permitting approval is Q4 2017 and depending on
timing, this may see gold production from bulk sampling move into
2018.
Following discussions between Lionsgold and its JV partner, it
has been agreed that the optimal level of bulk sampling targeted
will be circa 5,000 tonnes and it has been agreed between the two
shareholders of Kalevala that no other third party investors will
be sought by the JV company. Lionsgold will be given time to
consider and decide over the course of Q3 how much more equity, if
any, it may choose to take up through the injection of additional
working capital upon receipt of the environmental permitting
approval.
It has further been decided to use the extra time to conduct
grade confirmation drilling on site as we refine the bulk sampling
area to reduce waste and refine production processes.
Cameron Parry, Chief Executive Officer of Lionsgold, commented:
"Following discussions with our partners in India, and recent
meetings with our permitting consultant in Helsinki and JV partners
on site in Finland, Lionsgold is able to provide shareholders with
revised timelines regarding our two most advanced projects,
Jonnagiri and Kuikka.
"Whilst we were hopeful the Jonnagiri EFS would be ready for
release by the end of June, it is now expected to be available
around the end of July/early August.
"Regarding Finland, we originally envisaged that bulk sampling
could occur at Kuikka in Q3 this year but the earliest that appears
likely now is Q4 and depending on the timing of the environmental
permit approval, gold production may move into 2018.
"Whilst these delays are frustrating, they do not affect the
fundamental qualities of the Jonnagiri and Kuikka projects, and we
remain highly confident about the potential financial result that
can be achieved for Lionsgold.
"At Jonnagiri, through Geomysore, we have exposure to 361,000
ounces (74,000 ounces, net to LION) of a JORC compliant resource at
a project with a granted 30-year mining licence. At Kuikka we have
high grade gold deposits that we expect can support small-scale
high-grade underground gold mining with manageable modular capex
requirements.
"Further, with regard to our Finnish JV the extra time has
resulted in LION and its JV partner agreeing that bulk sampling of
circa 5,000 tonnes is the optimal level of production, reducing the
overall working capital required (and any potential dilution) in
seeing Kalevala produce gold and become self-funding.
"With regards to India, Lionsgold continues to discuss ways that
work programmes can be accelerated on the ground and LION can
possibly enhance the upside potential of Geomysore's unique India
gold portfolio."
For further information, please contact:
Lionsgold Limited Tel: +44 (0) 20 7397 2880
Cameron Parry (Chief Executive Officer)
Luke Cairns (Executive Director)
WH Ireland Limited (Nominated Adviser) Tel: +44 (0) 113 394 6600
Tim Feather
Ed Allsopp
Smaller Company Capital Limited (Joint Broker) Tel: +44 (0) 20 3651 2911
Rupert Williams
Jeremy Woodgate
Beaufort Securities Limited (Joint Broker) Tel: +44 (0) 20 7382 8300
Elliot Hance
Tavistock (Financial PR) Tel: +44 (0) 20 7920 3150
Emily Fenton
Edward Lee
About LIONSGOLD
Lionsgold is a London Stock Exchange AIM market quoted,
gold-focused exploration company, with gold assets in India and
Finland and a significant holding in a physical gold and silver
online vaulting and trading platform.
Lionsgold's three core focuses are:
-- Strategic partnership with leading India gold exploration and
mine development company, Geomysore, in which Lionsgold owns
20.5%;
-- Physical gold holding and trading fintech platform for the
UK, India and other jurisdictions; and
-- Gold exploration and production in Finland.
This information is provided by RNS
The company news service from the London Stock Exchange
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