Two years ago what is now Singapore-listed LionGold (SGX: SIGO) was called “Think Environmental Co.,” and it held investments and managed businesses in the renewable energy sector.
The company had stakes in everything from a central effluent-treatment plant in Dhaka, Bangladesh, to a waste-to-energy biomass conversion project in Henan, China.
But new directors and cornerstone investors in 2011 tore up the business plan — stepping from green energy into greenfield gold projects — and since March 2012, have picked up gold assets in Canada, Australia, Ghana and Bolivia by acquiring eight mining companies.
LionGold is targeting 200,000 oz. gold production by the end of 2014, and it says it has already secured 7.5 million oz. gold resources, of which 900,000 oz. are classified as reserves.
In October 2013 LionGold paid $7.4 million in cash for TSX-listed Acadian Mining (at 12¢ per share), giving it an inexpensive foothold in North America. Acadian’s two flagship projects in Nova Scotia — Beaver Dam and Fifteen Mile Stream — hold a combined resource of 1.33 million oz. gold. The two projects are 20 km along strike from each other.
Beaver Dam, at a cut-off grade of 0.3 gram gold per tonne, has indicated resources of 9.1 million tonnes grading 1.50 grams gold per tonne for 446,000 contained oz. gold, and inferred resources of 10.4 million tonnes averaging 1.50 grams gold for 504,000 contained oz. gold. At Fifteen Mile Stream, inferred resources stand at 6 million tonnes grading 1.60 grams gold for 383,000 contained oz. gold, at a cut-off grade of 0.7 gram gold.
The Singapore-based company believes open-pit mining could start at both sites as early as 2015.
LionGold — a play on Singapore’s nickname as the Lion City — could not be reached for comment by press time, but in a press release described the Acadian transaction as “consonant with a longer-term plan to create a North American hub of gold-mining operations.”
So far Acadian Mining is LionGold’s first foray into Canada. Its previous acquisitions have been confined to South America, Australia and Africa.
In April 2012, it acquired 77% of Signature Metals (ASX: SBL; US-OTC: SGTMF), which owns Owere Mines. Owere Mines in turn owns 70% of the Konongo gold project in Ghana. Historic gold production at Konongo rang in at 1.6 million oz. at 11.8 grams gold per tonne, LionGold says, and management believes there is untapped potential for a lot more.
A scoping study on Konongo is expected before year-end. The project contains 16 old deposits along a 12 km strike length, and is 80 km from AngloGold Ashanti’s (NYSE: AU) Obuasi mine. Joint-Ore Reserves Committee (JORC) compliant resources for Konongo total 1.47 million oz. gold in the indicated and inferred categories, based on 23.4 million tonnes at a grade of 1.95 grams gold per tonne.
In October, LionGold acquired 100% of Castlemaine Goldfields and its five concessions in the gold belt of central Victoria, Australia, one of which, called Ballarat, is already producing gold. In 2011, underground mining and ore processing was restarted at the Ballarat tenement, 115 km northwest of Melbourne, and the operation is on target to ramp up to an annualized production rate of 40,000 to 50,000 oz. gold in the 2014 fiscal year. Facilities at Ballarat include a fully recommissioned, 600,000-tonne-per-year mill, gravity-and-leach circuits, a reverse-osmosis water treatment plant and an assay lab.
On the Castlemaine tenements, the Chewton deposit has a JORC-compliant inferred resource of 2.15 million tonnes grading 8.3 grams gold for 574,000 contained oz. gold, and at the Remnant Wattle Gully deposit, an inferred resource of 610,000 tonnes grading 5.7 grams gold for 112,000 oz. gold.
More recently, LionGold signed an ore-processing agreement with A1 Consolidated Gold (ASX: AYC) and took a 15% strategic investment in the company. Under the arrangement, the Ballarat gold mine will process up to to 150,000 tonnes per year from the A1 gold mine over three years. The agreement could double the current throughput at the Ballarat gold plant, which had been processing between 150,000 to 200,000 tonnes a year.
LionGold also acquired 100% of Minera Nueva Vista S.A. and its Amayapampa project in Bolivia in December 2012. The company believes it can put Amayapampa into production with a starter pit in 2015.
Amayapampa — a 32 sq. km property, 290 km southeast of La Paz — has a National Instrument 43-101-compliant indicated resource of 26.16 million tonnes grading 1.2 grams gold per tonne for 979,637 contained oz. gold, and an inferred resource of 8.75 million tonnes averaging 1.1 grams gold for 300,363 contained oz. gold.
LionGold has also taken strategic stakes in Citigold (ASX: CTO; US-OTC: CTOHY) (18%) and in Unity Mining (ASX: UML; US- OTC: BGOMF) (13%). Citigold is advancing the Charters Towers tenements in Queensland, with JORC-compliant resources of 3.2 million tonnes grading 7.6 grams gold for 780,000 oz. gold in the indicated category and 25 million tonnes averaging 14 grams gold for 11 million oz. gold in the inferred category. Unity Mining is advancing two properties in Australia: the Henty mine in northwestern Tasmania and Dargues Reef in New South Wales. Unity also holds a 35% stake in GoldStone Resources (LSE: GRL), a company with three exploration projects in West Africa, including a project in Ghana near LionGold’s Owere mine.