The NI 43-101-compliant feasibility study for Lionsgold’s Jonnagiri Gold Project in Andhra Pradesh India has demonstrated a robust project that can be developed into India’s first privately-owned gold mine. Lionsgold holds an interest in the project through its 21.15% stake in Geomysore Services India Pvt Ltd.
Based on a 151,020 ounce probable gold reserve the project shows a net present value of US$28.2 million, applying an 8.48% discounted cash flow rate. The internal rate of return for the base case is 24% pre-tax and 17.8% post-tax. The further addition of low-grade stockpiles and the inferred resources takes the NPV up to US$34.9 million.
Geomysore holds exploration rights covering in excess of 900sqkm in India including a granted 30-year mining lease at Jonnagiri covering 6sqkm.
Concurrently to negotiations relating to land acquisition at Jonnagiri, Geomysore has embarked on an internal scoping study on their South Kolar Project, which is in the southern part of the Kolar Gold Field also in the state of Andhra Pradesh.
South Kolar is an area covered under two Mining Lease Applications, covering approximately 10sqkm each, and Geomysore has signed a Memorandum of Understanding with the government of Andhra Pradesh to develop the areas into commercially viable mines.
Lionsgold’s CEO Cameron Parry said, “Mine development at Jonnagiri is subject to agreement for land acquisition with relevant landowners. Should commercial agreement be reached, subject to financing, the building of a mine at Jonnagiri could commence as early as the second quarter of 2018.
“The build is planned to take 24 months and at full production the Jonnagiri mine is forecast to produce around 25,000 ounces of gold annually, which would contribute more than a quarter of India's gold production based on current domestic output.
“Concurrent with trying to progress to a mine at Jonnagiri, an internal scoping study in respect of Geomysore’s South Kolar Project has commenced and is currently targeted as the next gold mine to be developed by Geomysore from its portfolio of over 30 licences and applications throughout India with priority rights.”