TIDMLION
RNS Number : 9744Y
Lionsgold Limited
11 December 2017
11 December 2017
Lionsgold Limited
("Lionsgold", "LION" or the "Company")
Final Results
Lionsgold (LON: LION), the AIM quoted company focused on the
exploration, production and retail application of physical gold,
including the development of the Goldbloc digital currency, is
pleased to announce its audited final results for the financial
year 01 July 2016 to 30 June 2017.
For further information, please visit www.lionsgold.com or
contact:
Lionsgold Limited Tel: +44 (0)203 778 0578
Cameron Parry (Chief Executive Officer)
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
Elliot Hance
Tavistock (Financial PR) Tel: +44 (0) 20 7920 3150
Edward Lee
Chief Executive Officer's Report
I am pleased to make my report on the financial year 01 July
2016 to 30 June 2017. This was a period of resetting the Company's
operations and strategic direction from the original proposition
that the Company's mid-2011 IPO was based upon. Two months into the
period under review, on 28 July 2016 there was an injection of new
management and funding in the Company (formerly named Kolar Gold
Limited), being myself as CEO and Luke Cairns as Executive
Director, and GBP900,000 in gross proceeds raised. The then
Chairman and other non-executive director who had held those board
positions since the listing of Kolar Gold Limited on AIM in June
2011, stepped down at the end of September 2016 and at the end of
December 2016 respectively. Amidst those changes, M. Hanuma Prasad
was appointed as a new Non-Executive Director on 23 November
2016.
Following the appointment of the new management and operational
review, the Group set about establishing a new three-fold
strategy:
-- Strengthen the partnership with one of India's leading gold
exploration companies, Geomysore Services India Pvt Ltd
("Geomysore");
-- Provide a physical gold holding and trading Fintech platform
for India and other markets; and
-- Achieve jurisdictional diversification through gold
exploration and mine development in Finland.
Under this new strategy and following the changes above, the
Company was rebranded and on 27 February 2017 commenced trading
under the new name Lionsgold Limited with the new TIDM of
"LION".
Review of operations for the financial year ended 30 June
2017
The last financial year was one of transition which resulted in
the departure of several directors and the contraction of costs and
activity to reflect the resources available. From this reduced
operational base Lionsgold then proceeded to implement the new
strategy of the Group.
The three business divisions of the Company - India Gold,
Fintech Gold and Finland Gold - were carried out through the
Group's activities and interests in Geomysore Services India Pvt
Ltd, the UK incorporated TRAC Technology Limited and Finnish JV
company, Kalevala Gold Oy.
Geomysore
Lionsgold has a 21.15% per cent shareholding in Geomysore as at
the date of this report. As at 30 June 2017, the Company valued its
investment in Geomysore at GBP2.93 million (30 June 2016: GBP3.01
million).
During the period under review, Geomysore continued to progress
with further exploration drilling, resource modelling and appraisal
work to assess the feasibility, scale and timing of constructing a
producing gold mine at Jonnagiri, for which Geomysore has been
granted a 30 year mining licence to mine 365,000 tonnes of gold ore
per year.
Based on data available as at 30 June 2016, Golder Associates
Pty Limited 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 previously identified
at the East Block and as announced in our interims on 30 March
2016. Full details on this resource increase can be found in the
announcement dated 21 October 2016.
The Feasibility Study ("FS") on Jonnagiri was completed post
period end. The preliminary FS results were released to market on
15 August 2017 with the final results of the Feasibility Study
released on 16 November 2017, demonstrating a robust project that
could potentially be developed as India's first privately owned
gold mine.
Geomysore holds exploration rights covering in excess of
900km(2) in India including a granted 30-year mining lease at
Jonnagiri covering 6km(2) . The Jonnagiri Gold Project is situated
in the state of Andhra Pradesh. Concurrently with negotiations
relating to land acquisition at Jonnagiri, post balance date it was
announced on 16 November 2017 that Geomysore has embarked on an
internal scoping study on its South Kolar Project ("South Kolar")
situated in the Southern part of the Kolar Gold Field also located
in the state of Andhra Pradesh. South Kolar is an area covered
under two Mining Lease Applications, covering approximately 10km(2)
each, and Geomysore has signed a Memorandum of Understanding with
the government of Andhra Pradesh to develop the areas into
commercially viable mines.
On 31 May 2017, the Company released the findings of the
independent valuation of Geomysore's assets. Golder Associates
assessed Geomysore's gold exploration assets (excluding Jonnagiri)
covering a total area in excess of 900km(2) . They comprise 36
Prospecting Licences, Prospecting Licence Applications and Mining
Lease Applications 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 the gold exploration assets,
excluding Jonnagiri, as follows:
Low Value (US$) High Value (US$) Expected Value
(US$)
6.54 million 9.45 million 7.95 million
Jonnagiri Gold Mine Feasibility Study Summary
The Jonnagiri Feasibility Study results were released to market
post balance date on the 16 November 2017. The findings are NI
43-101 compliant and the Feasibility Study used a domestic market
gold price being the three year average of Indian Bullion Jewellers
Association ("IBJA") Price, INR2,806 per gram (equivalent of
USD$1,301/oz based on USD$1 = INR67.08). Gold recovery has been
estimated at 92.4% through a Gravity - CIL (carbon in leach)
processing circuit.
The base case production profile is based solely on the 151,020
ounces of Probable Reserve from the Indicated Resource ("Base
Case"). In parallel to the Base Case, a total production model was
developed where all available ore was processed, being the Probable
Reserve, the debris (unclassified material), part of the Inferred
Resource and some low grade material to be used in the event the
plant was at times underutilised ("Total Production Case").
The Jonnagiri mine will use conventional open pit mining with
gold recovered by standard gravity and Carbon In Leach processing
to produce a dore on site. Inputs to the feasibility study are
presented as per Table 1 below.
Table 1 -Base Case inputs in the Feasibility Study
Life Of Mine
---------------------
Ore processed 2.8Mt
----------------- ---------------------
Ore throughput 500kt/a (1.5kt/d)
----------------- ---------------------
Gold grade 1.68g/t gold
----------------- ---------------------
Expected gold
recovery 92.4%
----------------- ---------------------
Stripping Ratio 4.6:1
----------------- ---------------------
Gold produced 139.5koz gold
----------------- ---------------------
Capex to first INR2,622m (US$39.1m)
Production*
----------------- ---------------------
Operating Cost US$25.2/t ore
** milled
----------------- ---------------------
Cash Cost (inc. US$571/oz
royalty)
----------------- ---------------------
* Includes capitalised operating
costs of US$1.8m
** Includes: Mining, Plant, Onsite
G&A and head office costs
The key outputs of the Project as reported in the FS Base Case,
based on mining only the Probable Reserve of 151,020 ounces of
gold, are as per Table 2 below (based on USD$1 = INR67.08).
Table 2- NPV calculation - Base Case
Pre Tax Post Tax
-------- ---------
US$M US$M
------------ -------- ---------
NPV(5%) $39.9 $23.1
------------ -------- ---------
NPV(8.48%) $28.2 $14.6
------------ -------- ---------
NPV(10%) $23.9 $11.6
------------ -------- ---------
IRR 24.0% 17.8%
------------ -------- ---------
In parallel to the Base Case schedule which processed only the
Probable Reserve (Indicated Resource), a Total Production Case
model was developed where all the available ore was processed,
subject to tailings dam capacity. The ore processed will be the
Probable Reserve, the debris (unclassified material), part of the
Inferred Resource and if the plant was underutilised, the low grade
material to 'fill the plant'. The Total Case scenario adds value to
the Base Case without spending additional capital for the project.
The IRR for the Total Case indicated an even more robust project.
The key outputs of the financial analysis for such assumptions are
shown in Table 3 below (based on USD$1 = INR67.08).
Table 3- NPV calculation - Total Case Production
Pre Tax Post Tax
-------- ---------
US$M US$M
---------- -------- ---------
NPV5% $47.6 $28.3
---------- -------- ---------
NPV8.48% $34.9 $19.2
---------- -------- ---------
NPV10% $30.3 $15.9
---------- -------- ---------
IRR 28.0% 20.9%
---------- -------- ---------
Geomysore is currently engaged in negotiations with relevant
landowners to purchase approximately 350 acres of land required for
the development of the East Block open pit mine and other
associated infrastructure, for example: Processing Plant, Tailing
Storage Facility, Waste Rock Dumps and Water Reservoir.
Subject to agreement for the relevant land acquisition, and
subject to financing, the building of a mine at Jonnagiri could
commence as early as Q2 2018. The build is planned to take 24
months and at full production the Jonnagiri mine is forecast to
produce around 25,000 oz of gold annually, which would contribute
more than a quarter of India's gold production based on current
domestic output.
TRAC Technology Limited
On 1 November 2016, the Company announced that it had agreed
terms for a joint venture with TRAC Technology Limited ("TRAC") to
launch an online gold and silver trading and storage platform for
the Indian market (the "JV").
During the financial year the Company's initial shareholding of
27.3% was grown to become 37.7% as announced on the 3 May 2017.
Post balance date Lionsgold's shareholding in TRAC has increased
to 55% with the Group CEO, Cameron Parry, co-investing and buying
5% of TRAC directly and becoming Non-Executive Chairman of
Lionsgold's fintech subsidiary.
The Group's increased equity position to majority shareholder
was completed with the aim of rolling out a suite of
alternative-banking gold-based products, including a direct debit
card and mobile phone banking-style app, as well as developing a
gold-backed currency planned for release during 2018.
Following collaboration between TRAC's CEO and TRAC's Chairman,
and working with select digital marketing and technology providers,
on 18 October 2017, the vision for the digital gold currency
Goldbloc was announced. Goldbloc's aim is to provide the
convenience and utility of a fiat currency bank account, but
representing direct ownership of physical gold by the Goldbloc
holder. Each Goldbloc unit will represent 1/1,000(th) of a gram of
physical gold (approximately GBP0.03 based on the current gold spot
price) and shall be divisible to two decimal places. Goldbloc
evolved from TRAC's offering of an online physical gold holding and
trading platform to become a physical gold digital currency, in a
bank account.
The full commercial version of Goldbloc is currently scheduled
to be available, with physical debit card(s) attached to the
Goldbloc holder's account, from Q2 2018.
Kalevala Gold Oy
During the financial period, on 13 October 2016, the Company
announced that it had entered into a Memorandum of Understanding
("MOU") to establish a Joint Venture ("JV") to develop high grade
gold exploration and mining assets within licences in Finland
covering an area of approximately 24km(2) .
The Finnish JV company was incorporated Kalevala Gold Oy, and
the Group CEO joined the board with two representatives from the JV
partner's company.
Whilst sampling and drilling was carried out during the
financial year, part of the work required to progress development
of the assets involves obtaining environmental permitting to carry
out a bulk sampling programme at one of the JV projects, Kuikka.
The environmental permitting application was submitted in May 2017,
following confirmation that all relevant prospecting licences and
applications had been transferred to Kalevala. Whilst the exact
timeline for approval cannot be known, the Board believes it
reasonable to expect that Kalevala may obtain environmental
permitting approval in Q2 2018 and depending on timing, this may
see gold production from bulk sampling in Q3 of 2018.
In the interim at Kuikka, the results of the confirmation grade
drilling program further demonstrate a high grade gold deposit and
further delineate the shape and size for the most effective bulk
sample cut. With regard to processing the ore, our pilot plant and
equipment is in place and awaiting completion of commissioning
using a planned 200 tonnes sample.
Post period end, additional exploration targets were identified
and new prospecting licence granted, and Kalevala now holds more
than 300km(2) under licence representing over 90% of what the board
believes to be the highly prospective Suomussalmi Greenstone
Belt.
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 Sivakumar resigned
from the Board.
On 30 September 2016 Harvinder Hungin resigned 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.
Stephen Oke, who was a non-executive director since the June
2011 IPO, resigned from the Board on 31 December 2016.
Post balance date, on 23 November 2017, Luke Cairns stepped down
as Executive Director and David Price was appointed as
Non-Executive Chairman.
Key financials
The loss after tax for the year was GBP862,256 compared to
GBP930,778 for the year to June 2016.
As at 30 June 2017, the Group's cash balances were GBP565,128
(2016: GBP404,806). During the financial year, the Company
undertook a placing of 81,818,182 new ordinary shares at a price of
1.1p per share raising GBP900,000 before fees and expenses and
placing of 50,000,000 new ordinary shares raising GBP550,000 before
fees. Post the financial year end the Company completed a placing
of 93,750,000 new ordinary shares raising GBP750,000 before fees,
part of which is subject to approval at AGM.
The Group is continuously monitoring the rate of cash usage to
ensure a balance between investment, achieving major milestones and
having sufficient working capital to remain a going concern.
Outlook
Lionsgold has, post balance date, grown in scope and size
leading up to the end of the 2017 calendar year. Since October
2017, Lionsgold has released details regarding the development of
its digital gold currency, Goldbloc, the granting of an E-Money
licence by the FCA (Financial Conduct Authority), the engagement of
former Rio Tinto Chief Executive of Energy & Minerals, Mr Alan
Davies, as part-time Global Strategy Consultant, the appointment of
Mr David Price to the board as Non-Executive Chairman, and
announced a financing offered directly to specific high net worth
individuals with strategic relevance to the Company, securing the
necessary cash for LION to maximise opportunities anticipated in
2018. In addition, Lionsgold announced that its Finland JV company
had received permission for its pilot plant testing (200 tonnes),
and the final Feasibility Study results were released in regard to
the Jonnagiri Project in India as well as releasing the location of
the next gold mine targeted from its India partner's portfolio -
the South Kolar Project.
It has been a busy time since the change in management at the
end of July 2016 and the Lionsgold Board believes we are heading
into a very exciting year for the Group.
On behalf of my fellow directors I would like to thank all
shareholders and stakeholders for supporting Lionsgold during this
period of transition and transformation whilst welcoming all new
shareholders to the register. We look forward with confidence to
growing the value of our various interests and the Company.
Cameron Parry
Chief Executive Officer
Lionsgold Limited and its controlled entities
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2017
Group
Note 2017 2016
GBP GBP
Continuing operations
Salaries and wages - (263,073)
Other administrative expenses (699,569) (629,038)
Accretion of investment
in associate - 2,994
Loss from operating activities (699,569) (889,117)
---------- ----------
Finance income 799 5,799
Finance costs (75,878) (3,477)
Net financing income (75,079) 2,322
---------- ----------
Share of loss of associate (87,608) (39,635)
Loss on disposal of fixed
assets - (4,348)
Loss before tax (862,256) (930,778)
Income tax - -
---------- ----------
Loss for the year (862,256) (930,778)
Other comprehensive loss
Items that may be reclassified
subsequently to profit
or loss
Foreign exchange translation (2,885) (5,979)
---------- ----------
Total comprehensive loss
for the year (865,141) (936,757)
========== ==========
Basic and diluted earnings
per share (p) 2 (0.44) (0.88)
Lionsgold Limited and its controlled entities
Consolidated Statement of Financial Position
as at 30 June 2017
Group
2017 2016
GBP GBP
Non-current assets
Investment in associate 2,926,054 3,013,662
Investments 539,945 -
Total non-current assets 3,465,999 3,013,662
------------ ------------
Current assets
Trade and other receivables 3,537 3,736
Prepayments and other assets 831 26,218
Term deposits 71,435 285,648
Cash and cash equivalents 493,693 119,158
Total current assets 569,496 434,760
------------ ------------
Total assets 4,035,495 3,448,422
------------ ------------
Current liabilities
Trade and other payables 77,624 144,996
Total current liabilities 77,624 144,996
------------ ------------
Total net assets 3,957,871 3,303,426
============ ============
Equity
Share capital - 7,440,546
Share premium 24,588,942 15,690,724
Reserves 47,743 17,672
Accumulated losses (20,678,814) (19,845,516)
------------ ------------
Total equity 3,957,871 3,303,426
============ ============
Lionsgold Limited and its controlled entities
Consolidated Statement of Changes in Equity
for year ended 30 June 2017
Share Share Share Foreign Accumulated Total
capital premium based exchange losses equity
payment translation
reserve reserve
GBP GBP GBP GBP GBP GBP
------------ ----------- ------------ ------------- ------------- ----------
Balance at 30 June 2015 7,440,546 15,690,724 3,838,027 (5,307) (22,723,807) 4,240,183
Loss for the year - - - - (930,778) (930,778)
Other comprehensive loss
- foreign exchange translation
variances - - - (5,979) - (5,979)
------------ ----------- ------------ ------------- ------------- ----------
Total comprehensive loss
for the year - - - (5,979) (930,778) (936,757)
Transfer of expired options - - (3,809,069) - 3,809,069 -
------------ ----------- ------------ ------------- ------------- ----------
Total contributions by and
distributions to owners - - (3,809,069) - 3,809,069 -
Balance at 30 June 2016 7,440,546 15,690,724 28,958 (11,286) (19,845,516) 3,303,426
Loss for the year - - - - (862,256) (862,256)
Other comprehensive loss
- foreign exchange translation - - - (2,885) - (2,885)
Total comprehensive loss
for the year - - - (2,885) (862,256) (865,141)
------------ ----------- ------------ ------------- ------------- ----------
Transfer of lapsed options - - (28,958) - 28,958 -
Issue of shares - 1,682,600 - - - 1,682,600
Cost of issue - (163,120) - - - (163,120)
Issue of warrants - (61,808) 61,914 - - 106
Reallocation of share capital
to share premium following
designation of shares to
nil par value (7,440,546) 7,440,546 - - - -
Total contributions by and
distributions to owners (7,440,546) 8,898,218 32,956 - 28,958 1,519,586
Balance at 30 June 2017 - 24,588,942 61,914 (14,171) (20,678,814) 3,957,871
--------------------------------- ------------ ----------- ------------ ------------- ------------- ----------
Lionsgold Limited and its controlled entities
Consolidated Statement of Cash Flows
For the year ended 30 June 2017
2017 2016
GBP GBP
Cash flows from operating
activities
Loss for the year (862,256) (930,778)
Adjustments for:
Depreciation - 2,050
Accretion of investment
in associate - (2,994)
Share based payment 55,107 -
Share of loss of associate 87,608 39,635
Net financing income (303) (2,338)
Foreign exchange variances (4,606) (6,140)
Operating loss before changes
in working capital and
provisions (724,450) (900,565)
Change in trade and other
receivables 199 3,213
Change in other current
assets 25,387 (9,576)
Change in trade and other
payables (67,372) (15,852)
Change in employee benefit
liability - (121,132)
---------- ------------
Net cash used in operating
activities (766,236) (1,043,912)
---------- ------------
Cash flows from investing
activities
Interest received 303 5,138
Funds movement in term
deposit account 214,213 646,346
Acquisition of investments (362,346) -
Net cash (used in)/from
investing activities (147,830) 651,484
---------- ------------
Cash flows from financing
activities
Proceeds from the issue
of shares 1,450,000 -
Cost of issue (163,120) -
---------- ------------
Net cash from financing
activities 1,286,880 -
---------- ------------
Net increase/(decrease)
in cash and cash equivalents 372,814 (392,428)
Foreign exchange gain on
cash balances 1,721 5,861
Cash and cash equivalents
at 1 July 119,158 505,725
---------- ------------
Cash and cash equivalents
at 30 June
(Excludes term deposits
of GBP71,435)
(2016: GBP285,648) 493,693 119,158
========== ============
Lionsgold Limited and its controlled entities
Notes to the financial statements
1. Basis of preparation and status of financial information
The financial information set out in this statement has been
prepared in accordance with the recognition and measurement
principles of International Financial Reporting Standards as
adopted by the EU ("adopted IFRSs"), IFRIC interpretations and the
Companies Act 2006 applicable to companies reporting under IFRS. It
does not include all the information required for full annual
accounts.
The financial information does not constitute the Company's
statutory accounts for the years ended 30 June 2017 or 30 June 2016
but is derived from those accounts. Statutory accounts for 2016
have been delivered to the registrar of companies, and those for
2017 will be delivered in due course. The auditor has reported on
those accounts; his reports were (i) unqualified, (ii) did not
include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying his report and
(iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006.
2. Earnings per share
The calculation of basic loss per share at 30 June 2017 was
based on the loss of GBP847,275 (2016: GBP930,778), and a weighted
average number of ordinary shares outstanding of 195,685,990 (2016:
106,293,537), calculated as follows:
2017 2016
GBP GBP
Loss attributable to ordinary
shareholders 862,256 930,778
======== ========
Weighted average number
of ordinary shares
'000 '000
Issued ordinary shares
at 1 July 106,294 106,294
Effect of shares issued
during the year 89,392 -
-------- --------
Weighted average number
of shares at 30 June 195,686 106,294
======== ========
Diluted loss per share
Options and warrants granted to the Directors, staff and
external consultants are considered to be potential ordinary shares
and have not been included in the determination of diluted loss per
share as the effect of exercise would be non-dilutive. The options
have not been included in the determination of the basic loss per
share.
2017 pence 2016 pence
per share per share
Basic and diluted loss per
share (0.44) (0.88)
----------- -----------
3. Annual Report and Annual General Meeting
Copies of the 2017 Annual Report and Accounts will be posted to
shareholders shortly and will be available on the Company's website
at www.lionsgold.com. Further copies may be obtained by contacting
the Company Secretary at Lionsgold, Ground Floor, Dorey Court,
Admiral Park, Saint Peter Port, Guernsey GY1 2HT.
The annual general meeting is to be held at the registered
office on Thursday 28 December 2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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