LIONSGOLD Limited expected that an economic feasibility study for the Jonnagiri Gold Project would be complete by the end of June. Jonnagiri, which has a JORC-compliant resource of 361,000 ounces, has the potential to be India’s first privately owned gold producing mine.

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Drilling at the Jonnagiri Gold Project of Geomysore Services India and Lionsgold Ltd.

Geomysore Services India, in which Lionsgold holds 20.5%, has invited expressions of interest for appointment of a contracted Mine Developer and Operator (MDO) for the project.

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.

Meantime, an independent report has valued the Indian gold exploration assets held by Geomysore, excluding Jonnagiri, at approximately US$7.95 million. The valuation by Golder Associates comprises exploration areas held by Geomysore through approved Prospecting Licences (PL), Prospecting Licences in Application (PLA) or Mining Licences in Application (MLA).

Golder assessed the exploration assets covering a total area in excess of 900sqkm. They comprise 36 PLs, PLAs and MLAs that predominantly cover greenstone belt areas in southern and central parts of India, with the main groupings found in the Kolar and Jagular regions in the states of Andhra Pradesh and Karnataka respectively.

Golder determined the total value of these 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.

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