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Singapore's LionGold over rated -Company and its media supporters seem blind to the Castlemaine curse

LionGold Ltd, a company listed on the Singapore Stock Exchange (SGX)is being touted by its supporters in the media, particularly Malaysia's The Star, as the next big thing in mining, mostly on the back on the company's takeover of the Castlemaine Goldfields in Ballarat.

As The Star sees it:

LionGold Corp Ltd, the Malaysian-controlled, Singapore listed gold miner, is poised to embark on another series of acquisitions that could nudge it to become one of Asia's largest gold mining players, sources said.   

StarBiz had first reported on the SGX-listed LionGold last September, interviewing its executive chairman Tan Sri Nik Ibrahim Kamil, a former head honcho of KFC Holdings Bhd and the NSTP group. 

LionGold already boasts control over three producing gold mines and a few more mines that are close to the production stage. One of the producing mines is the state-of-the-art Ballarat mine, near Melbourne, whose parent company, Castlemaine Goldfields Ltd, was acquired at a song considering the amount of investment that had previously gone into the Ballarant mine.

http://biz.thestar.com.my/news/story.asp?file=/2013/6/3/business/13190316&sec=business

Following StarBiz coverage of LionGold Corp Ltd last September, we were invited to join a group of Singaporean journalists on a site visit to one of the company’s key assets – the Ballarat gold mine in Victoria, Australia........... past owners of the mine had spent some 20 years “digging to get underground” and in 2007, Lihir Gold Ltd bought the mine for A$350mil (RM1.05bil). After acquiring it, Lihir had spent the next two years investing heavily in the mine, spending some A$400mil (RM1.2bil).

But by 2010, the Ballarat mine no longer fitted Lihir’s strategy of focusing on its larger mining assets and it had decided to hive it off to Castlemaine Goldfields Ltd.
Last April, Castlemaine became the subject of a reportedly “friendly takeover” by LionGold, through a share swap exercise. The bid, in which 2 LionGold shares were offered for every nine Castlemaine shares, was recommended to shareholders by Castlemaine’s board. Castlemaine then said the bid capitalised on Asia’s investment appetite for gold and gave its shareholders exposure to a diversified gold producer and explorer with increased financial strength.
The takeover has since been completed with LionGold now owning 100% of Castlemaine.

Ballarat’s relatively high yield gives it an annual production of 40,000-50,000 ounces of gold.

http://biz.thestar.com.my/news/story.asp?file=/2013/6/3/business/13190323&sec=business

 Clearly The Star's journalists and editors do not read,if not do not believe, or choose not to believe ,what they read in Australian reports, such as these below,all of which are available on-line:

Lihir Gold sells Ballarat to Castlemaine Goldfields

  • by: UPDATE: Alex Wilson
  • From: Dow Jones
  • March 05, 2010 11:13AM

LIHIR Gold is selling its failed Ballarat gold project to Castlemaine Goldfields, ending the miner's disappointing foray onto the historic goldfields of Victoria.
Lihir's acquisition of the project in 2007 was part of a drive to diversify the company's production beyond its flagship mine in Papua New Guinea, but Ballarat never performed to expectations and was put up for sale and written down last year.
"Today's sale is a chance for us to move on and for a new owner to take it forward and give it a chance," Lihir executive general manager of operations Peter Smith told Dow Jones Newswires.
Castlemaine will pay Lihir $4.5 million in cash plus a 2.5 per cent royalty on future production from the mine, capped at $50m.

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This is a long way shy of the $350m Lihir paid for the project in its all-share takeover of Ballarat Goldfields in 2007.

http://www.theaustralian.com.au/business/mining-energy/lihir-gold-sells-ballarat-to-castlemaine-goldfields/story-e6frg9do-1225837292948


Singapore group bids for Castlemaine Goldfields

Date

Peter Ker

Some of Australia's most historic goldfields could be set to change hands again, with Singaporean interests mounting a take-over bid for ASX-listed Castlemaine Goldfields.
Liongold corporation has offered two of it's own shares for every nine Castlemaine shares, in a deal that would see the Singaporean company take ownership of the Victorian goldfields around Ballarat that were central to the goldrushes of the 1860's.
The approach sent Castlemaine's shares soaring in morning trade. They were recently up 2.5 cents, or 21.7 per cent, to 14 cents.
The takeover offer will complement a share placement to Liongold, which will see it issued almost 13% of Castlemaine for just under $4 million.
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The offer values Castlemaine at just over $55 million.
Castlemaine bought the famous goldfields in 2010 from it's previous owner Lihir Gold, but saw its share price plummet in November when poor yields forced the company to wind-back its mining operations.
Castlemaine directors have recommended shareholders accept the deal, and shareholders will be sent more details in May.
The Victorian goldrushes were responsible for generating huge amounts of wealth for Melbourne, and eventually sparked one of Australia's most important historical events; the Eureka stockade.
pker@theage.com.au

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