Lionsgold Limited Interim Financial Statements (9337A)

TIDMLION

RNS Number : 9337A

Lionsgold Limited

30 March 2017

Lionsgold Limited

 
           Half Year Report 
  for the six months ended 31 December 
                  2016

Lionsgold Limited ("Lionsgold" or the "Company"), formerly known as Kolar Gold Limited, the India-focused gold exploration company with additional exploration assets in Finland and an interest in a physical gold online trading platform, announces its unaudited results for the six months ended 31 December 2016.

Highlights for the period:

-- Refinancing and refocussing the Company through GBP900,000 placing and introduction of new management and entirely new board of directors;

-- Positive review of existing interests in India through 20.5% holding in leading India gold exploration and mine development company, Geomysore Services (India) Private Limited ("Geomysore"), including significant upgrade in JORC compliant resource at the most advanced project, Jonnagiri;

-- Jurisdictional diversification achieved through investment into Finnish gold exploration project (commencing with a 15.4% interest in Kalevala Gold Oy ("Kalevala") and increasing stake to 28.3%);

-- 50/50 Joint Venture with TRAC Technology Limited ("TRAC") to launch physical gold holding and trading platform for retail users in India;

   --      Strategic equity position acquired in TRAC of 27.3%; 
   --      Clearing of legacy expenses incurred under previous decentralised management; 
   --      Loss after tax for the period of GBP452,979 (2015: GBP533,065); and 
   --      Post period end, rebranding and change of name to Lionsgold Limited.

Cameron Parry, Chief Executive Officer of Lionsgold Limited, commented:

"The first six months of this financial year has seen a great deal of activity for the Company as the new Board undertook steps to broaden the operational scope of the Company whilst looking to open up our interests in India. We now have three complementary gold-focused divisions all of which have important milestones pending over the coming months.

"Our India partners, Geomysore (of which Lionsgold owns 20.5%), are close to the conclusion of the economic feasibility study which takes us to the 'decision to mine' stage around the end of May this year. Lionsgold has also commissioned a valuation report on the entirety of Geomysore's licences and licence applications in India which we expect to complete in early April. Our Finnish operating company, Kalevala Gold Oy, continues to progress preparatory work in the lead up to bulk sampling and resulting gold production in Q3 2017. In addition, we are on the cusp of going live with our newly branded physical gold and silver online holding and trading platform initially targeting the India market.

"We look forward to providing further updates on each of our divisions in the coming weeks and months."

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 
 Ellliot Hance 
Tavistock (Financial PR)                        Tel: +44 (0) 20 7920 3150 
Emily Fenton 
Edward Lee

Review of Operations

The six-month period ended 31 December 2016 was one of great activity for the Company following the placing of shares to raise GBP900,000 in July 2016 and the concurrent changes in the board with the appointments of new CEO Cameron Parry and executive director Luke Cairns. Under the new leadership, the Company set out to adopt a three-fold strategy: build on the existing relationships and value in India ("India Gold"); achieve jurisdictional diversification and near-term gold production via projects sourced in Finland ("Finland Gold"); and adapt and establish an online gold-trading platform via JV targeting the Indian market, supplemented by a strategic equity position in JV partner TRAC Technology Limited ("Fintech Gold").

India Gold

Lionsgold has a 20.5 per cent shareholding in Geomysore Services (India) Private Limited ("Geomysore") as at the date of this report following the investment of $2.4m by Thriveni Earth Movers Private Limited to fund the completion of the internal economic feasibility study ("EFS") currently scheduled the end of May this year.

During the period under review, Golder Associates Pty Limited ("Golder") estimated a JORC compliant indicated and inferred gold resource of 351,000 ounces in aggregate at the East and West blocks (234,000 and 117,000 ounces respectively) which was a significant increase from the approximate 150,000 ounces identified at the East Block and as announced in Company's half yearly report on 30 March 2016. Full details on this resource increase can be found in the announcement dated 21 October 2016.

Post the period under review and following the increased drill data resulting from the EFS drill programme Golder revised its estimates to a JORC compliant gold resource (the "Resource") of 214,000 ounces (Indicated) and 147,000 ounces (Inferred) in total at the East and West blocks (up from 103,000 ounces Indicated and 248,000 ounces Inferred as previously announced on 21 October 2016). Whilst the Resource increase in aggregate is marginal (up from 351,000 ounces to 361,000 ounces), significantly, 111,000 ounces of the Resource at the East Block has materially shifted from Inferred to Indicated category. No additional drilling was undertaken at the West Block. Full details are set out below.

In addition, Golder has reported on the test drilling results in the South Block of Jonnagiri which demonstrate highly prospective intersections at shallow depth.

The best drill intersections include:

   --      8m @ 2.67 g/t from surface, 
   --      2m @ 6.84 g/t from 26m, 
   --      5m @ 3.52 g/t from 3m, 
   --      5m @ 4.24 g/t from 6m, 
   --      3m @ 5.98 g/t from 3m, and 
   --      3m @ 7.84 g/t from 10m.

These intersections represent both detrital and primary ore, which is found in the vicinity of ancient mine workings. The next step for exploration at the South Block is a further programme of diamond core and reverse circulation drilling (approximately 4,000 metres in aggregate) with a view to establishing a JORC compliant resource to add to the East and West Block deposits.

Geomysore also has a number of other gold licences and applications in India at different stages of development in some very prospective areas including North, East and South Kolar Belt, but all resources are currently focussed on the EFS at Jonnagiri.

Prior to the final outcome of the EFS, Lionsgold commissioned Golder to undertake a valuation report of Geomysore's exploration assets in India, the results of which are expected in the coming weeks. This independent report, together with the results of the EFS and, subject to the decision to mine, any subsequent funding arrangements to build mining operations at Jonnagiri, will assist the Board in its discussions as to whether it may seek to increase its interest in Geomysore and mechanisms by which it might achieve this.

Finland Gold

In October 2016 the Company announced a Memorandum of Understanding ("MOU") under which Lionsgold had the ability to take an interest of up to 50 per cent of a new Finnish operating entity to which various gold exploration licences were being assigned. Under the MOU in the period under review the Company made an initial payment of EUR150,000 in cash. Post period end Kalevala Gold Oy ("Kalevala") was incorporated and, following the issue of 8.5m new ordinary shares in Lionsgold at an implied price of 1.6p per share, the Company took its interest into Kalevala to 15.4%.

Under the MOU, the Company has committed to invest a further EUR350,000 to take its interest to 28.3%. It was initially envisaged that this would have been paid by 28 February 2017 but payment is being requested in tranches as needed with the first EUR50,000 paid in February of this year. Lionsgold has the option to then increase its stake in Kalevala up to 50 per cent by the end of H2 2017 subject to a further investment of up to EUR1m.

Once all assigned, Kalevala will hold gold exploration licences covering 24km(2) in central east Finland. Subject to the level of funding, Kalevala is targeting up to a 10,000 tonne gold ore bulk sampling programme in Q3 of 2017 targeting production of 100kg of gold.

Fintech Gold

In November 2016, the Company announced that it had initiated a 50/50 Joint Venture ("JV") with TRAC Technology Limited ("TRAC") to launch an online gold and silver trading and storage platform targeting the Indian market. In conjunction with this Lionsgold acquired 27.3% of TRAC for a total consideration of $100,000 satisfied by payment of $50,000 in cash and the remainder through the issue of 2.6m new ordinary Lionsgold shares with an implied price of 1.6p per share.

Under the JV Lionsgold is to provide the first GBP50,000 to develop and launch the platform for the Indian market utilising TRAC's existing and proven gold trading platform: www.therealasset.co.uk. In the past few months the JV has developed its new brand and the site is nearing completion with a view to going live in early April. Whilst the new site will be targeting Indian customers, throughout its development the Company, together with TRAC, has taken the decision to make the platform open to customers from the UK introduced by Lionsgold.

Further announcements will be made as and when the site is ready to go live with a view to commencing trading and generating revenues immediately.

Board changes

On 28 July 2016 Cameron Parry was appointed to the Board as the Chief Executive Officer (CEO), Luke Cairns was appointed to the Board as an executive director and Vaidyanathan Venkateswaran Sivakumar resigned from the Board.

On 30 September 2016 Harvinderpal Singh Hungin stepped down as the Chairman and as a non-executive director.

On 23 November 2016 Dr. M. Hanuma Prasad was appointed to the Board as a non-executive director.

On 31 December 2016 Stephen Oke stepped down from the board as a non-executive director

Key financials

The loss after tax for the period was GBP452,979 compared to GBP533,065 for the half year to 31 December 2015.

As at 31 December 2016, the Group's cash balances were GBP612,383 (31 December 2015: GBP890,439).