LionGold to buy, process gold waste in Ghana

LionGold, the mining company which had billions of dollars wiped off its value last month after its shares plummeted, said yesterday that its Ghana unit has signed a deal with an Australian-registered firm to buy materials left behind from old gold mining operations and reprocess them to recover additional minerals.

LionGold’s Owere Mines will buy a minimum of one million dry metric tonnes of gold-bearing waste tailings from B&C Gold over three years, it said in a statement. Income generated from the gold produced will be used to fund further exploration activities at a mine in Ghana.

“Our agreement with B&C signifies LionGold’s commitment in developing our gold mining assets organically and would jump-start production and fully utilise existing facilities at our subsidiary, Owere Mines.

“While doing our part in improving Ghana’s environment, income generated through the production of gold from purchased tailings would also fund exploration activities at our ... Konongo Gold Project,” LionGold Group Chief Executive Nicholas Ng said.

Gold-bearing waste tailings are materials which remain from old gold mining operations. They may pose a threat to the environment and the health of nearby communities if the waste leaches into groundwater.

B&C has an environmental clean-up agreement to remove all gold-bearing waste tailings from river and stream systems in land owned by two local councils.

It will be responsible for all costs and approvals associated with the mining, extraction, blending and delivery of the tailings to Owere Mines, which in turn will pay the Australian-registered firm an aggregate price based on several factors, including the amount of dry tonnes delivered and grade of the tailings.

The tailings may be able to yield about 2,550kg of gold over the three years, LionGold said. Production is scheduled to begin in March next year.

LionGold’s shares closed little changed at S$0.177 yesterday, clawing back slightly from the more than four-year low of S$0.144 on Oct 17. That is still far below the S$1.51 level seen on Oct 3, a day before the miner and two other counters were suspended by the Singapore Exchange after sharp declines in their stock prices erased S$8.6 billion in market value over three days.

They were later allowed to resume trading as “designated securities”, implying that there could have been manipulation or excessive speculation.

http://www.todayonline.com/business/liongold-buy-process-gold-waste-ghana