An independent report has valued the Indian gold exploration assets held by Geomysore Services India, in which Lionsgold Limited holds a 20.5% interest. The value of these assets, excluding the flagship Jonnagiri project, is estimated at approximately US$7.95 million.

The Valuation Report undertaken by Golder Associates comprises gold exploration areas held by Geomysore through either approved Prospecting Licence (PL), Prospecting Licence in Application (PLA) or Mining Licences in Application (MLA).

Golder assessed Geomysore’s gold exploration assets covering a total area in excess of 900sqkm but excluding Jonnagiri, which has a JORC-compliant resource of 361,000 ounces of gold. They comprise 36 PLs, PLAs and MLAs that predominantly cover greenstone belt areas in southern and central parts of India, with the main groupings of the licences and applications found in the Kolar and Jagular regions in the states of Andhra Pradesh and Karnataka respectively.

Golder determined the total value of these gold exploration assets at a low level of US$6.54 million, a high value of US$9.45 million and an expected value of US$7.95 million.

In reaching its conclusions, Golder relied on two specific valuation methodologies, namely a multiple of previous expenditure and comparable recent transactions on similar tenements. Golder applied a discount of between 20% and 30% to tenements under application, as opposed to granted Prospecting Licence, and an additional 20% to 30% discount was applied to those projects where resource delineation solely relied upon Geological Survey of India (GSI) and other government exploration agencies and these resources are not JORC compliant.

Lionsgold advises that the economic feasibility study in respect of Jonnagiri continues to make progress and the updated timing for completion is late June.

While the study is being finalised, Geomysore has invited Expressions of Interest for the appointment of a contracted Mine Developer and Operator (MDO) for the development and operation of Jonnagiri.

The scope of the intended MDO will include:

• Design, development and operation of the mine in accordance with the relevant Acts and Rules;

• Installation, commissioning, operation and maintenance of the gold ore processing plant and all related project infrastructures and site facilities;

• Management of overburden and tailing dumps and the delivery of processed gold to Geomysore; and

• Assisting Geomysore in land acquisition and management (including community engagement), together with obtaining statutory clearances and the development of mine infrastructure including water and power structures as required for effective operation of the mines.

In light of the financial commitment of bringing Jonnagiri into production should the decision be taken to develop a mine, Geomysore considers it the most pragmatic path forward to becoming a gold producer whilst concurrently developing their other exploration projects.

In doing so, it will prove its business model at Jonnagiri and start generating cash flow to then be deployed in the additional target areas within the Jonnagiri ML as well as development of the other gold prospects in the portfolio.

Jonnagiri has the potential to be India’s first privately owned gold producing mine. To date, Geomysore has received four EOIs by contractors looking to provide the MDO services.

Lionsgold CEO Cameron Parry said, “We are pleased to announce the results of the independent valuation report. Although Jonnagiri is the most advanced gold project and attracts the most attention from the market, it is important shareholders are also aware of the size and significant potential of other highly prospective areas within Geomysore’s portfolio of assets.

“Based on the expected value determined by the valuation report and Lionsgold’s 20.5% equity ownership of Geomysore, this valuation gives an implied attributable value to Lionsgold of US$1.63 million. Against Lionsgold’s current market capitalisation of £2.25 million, this is a material amount.

“This figure excludes the value of Geomysore’s most advanced project, Jonnagiri, and as well as our Finnish gold Joint Venture and the latent value of IndexGold, we believe this provides another element of distinct and significant value from which Lionsgold is able to benefit.”

www.lionsgold.com

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