LionGold Corp has increased its annual gold production target for 2014 from 120,000 ounces to 200,000 following further acquisitions. The Singapore-listed company’s recently released annual report for the 2013 financial year ending March 31 state’s that the group’s mining portfolio now includes 5.5 million ounces of gold resources, of which nearly 900,000 ounces are classified as reserves.
During the 12 months covered by the report LionGold acquired interests in six gold companies with a combined transaction value of Sin$190 million. A substantial stake in a second Australian gold producer, Unity Mining Limited, has since been purchased, in May 2013.
As an active acquirer of gold assets, the steep fall in the prices of many gold mining companies from the start of 2013 improves expansion opportunities for the group. In support of the rapid build-out of the gold business, the divestment of the non-core ‘green energy’ assets was almost completed in the 12 month period.
Maiden commercial gold sales reached Sin$33.5 million in the period with the successful production ramp up at Castlemaine Goldfields’ Ballarat Mine in the Australian state of Victoria.
Investors have responded positively to the group’s gold-focused strategy. Proceeds of more than Sin$100 million were generated over the year through the private placement of new equity and issue of convertible instruments. LionGold’s market capitalization rose by 37% to over Sin$1 billion, and the return to shareholders was 8.7% in Singapore Dollars and 7.4% in US Dollars. In US Dollar terms, this compares favourably with -4% and -34% for gold and junior miner gold companies, respectively, in the FY2013 period.
For LionGold’s existing operations in the financial year ahead, the Ballarat Mine is poised to achieve its 40,000 to 50,000 annual gold production target at an average cash cost of US$850 per ounce. At Signature Metal’s Konongo Gold Project in Ghana, the exploration program has been accelerated, and a life of mine plan and metallurgical study are under way. The mine plan for Minera Nueva Vista’s Amayapampa Project in Bolivia will soon be finalized, and production from a starter pit is expected in early FY2015. The acquisition strategy will now focus more specifically on prospects that are in production, or within 12 months of production, with reserve ounces and potential to expand the average life of mine.
To address the challenges ahead, a strong leadership team has been brought in to manage and grow the gold mining business, led by Group Chief Executive Officer and Managing Director, Nicholas Ng. The technical team has also been significantly expanded to integrate and progress the newly acquired gold assets, and two veteran mining professionals were appointed to the Board.