LionGold delays Aussie deal to Sept 30

LionGold Corp has delayed a planned acquisition of Australian gold mining and exploration assets for a second time, with the new deadline pushed to the close of Sept 30.

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LionGold delays Aussie deal to Sept 30

Kenneth Lim

LionGold Corp has delayed a planned acquisition of Australian gold mining and exploration assets for a second time, with the new deadline pushed to the close of Sept 30.

No reason was given for the latest delay or the previous one.

The gold mining company on June 30 announced that its Australian subsidiary, LionGold Australia, had inked a non-binding heads of agreement to buy a pre-development project and an early exploration project in New South Wales.

The consideration of the deal was to be as much as A$12 million (S$14 million), depending on valuations of the assets. The price was to be paid in A$2 million of cash and shares at a minimum price of 4 Singapore cents apiece.

LionGold shares closed at 5.9 Singapore cents on Wednesday, unchanged from the day before.

The deadline to execute the agreement was originally set for July 31. That was then extended to Aug 31 before the latest delay.

If the latest deadline is neither met nor extended, both parties will be released from all further obligations and liabilities under the heads of agreement.

LionGold has been lossmaking for the past three financial years. For the year ended March 2014, net loss was S$89.3 million as the company took a S$62.1 million hit from exploration and evaluation expenditure.

Its shares have also been suffering since October 2013, when LionGold stock collapsed along with a number of other counters and sparked a sell-off in penny stocks. There is currently a police investigation into the circumstances surrounding the trading of the shares of LionGold, LionGold shareholder and investment firm Asiasons Capital and mining company Blumont Group.

The Commercial Affairs Department, Singapore’s white-collar crimefighting unit, in April had sought data and materials linked to LionGold non-executive, independent director Lynne Ng Su Ling and employee Peter Chen Hing Woon as part of its probe.

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