by Ganesh Sahathevan
On 4 September 2013 the story below was sent the Monetary Authority Of Singapore. It was authored by this writer and posted on his gsahathevan blog. The article is based on a collection of articles published by Liongold, the company at the centre of the SGX Catalyst Penny Stock Crash Of 2013, and mining industry paper PNG Report.
On 13 September 2013 the MAS was also provided the second story below from The Australian. The story included this statement:
If it were listed on the ASX, where gold equities have been smashed since April, LionGold would be lucky to be valued at a fraction of what it commands in Singapore -- especially given it is only part-way to 200,000 ounces of annual production.
On 23 September 2013 an email was received from the MAS, authored by one Chen Yiyi Primary Markets Conduct Division ,Market Conduct Department, which said, amongst other things:
The market valuation of a listed company depends on the market’s view of the underlying value of the company’s business, its assets and future growth potential. Prompt and accurate disclosure of material information on a listed company and its business facilitates proper pricing of its shares by market participants, and avoids the establishment of a false market in the trading of the listed company’s shares. While MAS is not in a position to comment on the valuation of a company, we would like to highlight that companies listed on SGX, including LionGold, are subject to continuing listing obligations under the SGX listing rules......As SGX has the responsibility to ensure that listed companies comply with the SGX listing rules (including the obligation to disclose material information), we would like to seek your consent to forward your email to SGX. Where there are suspected breaches of the law or regulations, we will conduct a thorough investigation and take firm and appropriate action in the event a breach is established.
Consent was provided, while impressing upon Ms Chen that the information was in the public domain.
On October 4 2013 the market in Liongold and related stocks crashed.
Readers should note that market manipulation began in August 2012, and media spin which bordered on fantasy was already evident in June 2013.
TO BE READ WITH
SGX listed LionCorpGold spins its Ballarat gold field assets as a billion dollar proposition, despite ample Australian disclosures to the contrary
The LionGoldCorp spin:
Under Castlemaine ownership, the Ballarat gold mine poured its first gold bar in September
2011. The mine then embarked on a six to nine month production ramp-up. The average
annualised rate for the 9 months to December 2012 has been 30,000 ounces per annum. The
Ballarat gold mine is expected to produce between 40,000 and 50,000 ounces of gold in 2013.
Commenting on Castlemaine’s achievement, Chief Executive Officer Nicholas Ng stated,
“Ballarat has made the transition from explorer to producer and is targeting an
annualised production rate of between 40,000 to 50,000 ounces in 2013. With the
successful ramp-up complete, LionGold has demonstrated its ability to identify and
acquire gold projects which build value for our shareholders. We look forward to
providing updates on the Group’s other projects as these are progressed”
The underlying reality, reported on 21 November 2011, AFTER Castlemaine's "achievement of pouring its
first gold bar in September 2011 :
GOLD miner Castlemaine Goldfields is holding talks to shore up finances after being forced to downgrade production at the Ballarat underground operation in Victoria it acquired off Lihir Gold more than 18 months ago.
Coming out of a trading halt on Friday, Castlemaine warned of an 8000 ounce shortfall in production over the next six months based on inferred resources for the Mako Fault Zone of 100,000 tonnes at 10.5 grams per tonne gold for a contained 33,100oz.
Castlemaine is the latest group to encounter problems at Ballarat after buying the problematic asset from Lihir in May last year for $A4.5 million in cash plus a 2.5% royalty interest, based on a net smelter return from future production, capped at $50 million.
LionGold roaring ahead for mine hero
- by: BARRY FITZGERALD
- From: The Australian
- September 04, 2013 12:00AM
Matthew Gill, chief operating officer of Singapore's first main board-listed gold company, says Asian investors have a much better view of the sector Source: Supplied
TIME and place have moved on for Bill Shorten and Matthew Gill since they became the public faces of the 2006 Anzac Day rock fall at the Beaconsfield goldmine in Tasmania.
The accident killed miner Larry Knight. But there was elation 14 days later when trapped underground miners Todd Russell and Brant Webb were rescued. It was Shorten the union organiser and Gill the mine manager who fronted the assembled media throng on a daily basis to provide updates of the rescue efforts, and express sympathy for the Knight family. Both men won plaudits -- particularly Gill. As mine manager, it was his responsibility to co-ordinate the rescue.
Now, more than seven years later, Shorten is a minister in a Labor government fighting for its survival at next Saturday's federal election.
Gill, too, has moved on, and finds himself as chief operating officer of LionGold Corp -- Singapore's first main board-listed gold company, which has become something of a pac-man in the merger and acquisitions space.
Unlike Shorten, the Ballarat-based Gill is feeling on top of the world right now. That is because, unlike virtually every other gold company in the world, LionGold continues to enjoy unbridled enthusiasm and support from its Asian investor base.
Formerly known as the The Think Environmental Company, LionGold has become a $1.4 billion company since switching to gold in 2011.
The group's market value is nothing short of amazing.
After a string of acquisitions from a standing start in 2011, it is part-way on its ambition to become by the end of next year the holder of 10 million ounces of gold in resources, two million ounces in reserves, and the producer of 200,000 ounces of gold annually.
If it were listed on the ASX, where gold equities have been smashed since April, LionGold would be lucky to be valued at a fraction of what it commands in Singapore -- especially given it is only part-way to 200,000 ounces of annual production.
Gill acknowledges that it can seem too much of a mystery to Australian onlookers.
"It is a pretty amazing story," Gill tells The Australian.
"We do get fantastic investor support. It's because we are the only listed gold stock on the main board of the Singapore exchange.
"So if you are in Singapore, and you want to play in gold stocks, LionGold is it."
More than that, Gill says, Asian investors are in love with gold, and a gambling instinct also helps.
"Asia comes with refreshing interest in gold compared with the Australian view of gold and gold equities," Gill says. "The traditional analysts' way of looking at gold stocks you don't get in Singapore, and it has created a fantastic opportunity for us."
And he has a message for the foreign doubters who think there is a little bit too much magic in LionGold's $1.4bn market value.
"The market capitalisation is real, the liquidity (trade) in the stock is real. Get over it," Gill says.
The increasingly institutional flavour of LionGold's initially Malaysian-controlled share register supports the "it's for real" view.
Frighteningly for the depressed ASX gold sector -- and its beaten-up counterparts in North America -- LionGold has a massive competitive advantage in the merger and acquisition space: its highly priced paper.
Using its scrip, LionGold can acquire unloved assets in foreign markets and then collect the premium in its share price that the Singapore market has proven keen to deliver.
It is an advantage already exercised on numerous occasions since The Think Environmental Company morphed into LionGold. It is also how Gill ended up as COO, with LionGold last year snaffling up ASX-listed Castlemaine Goldfields, where Gill was chief executive. Castlemaine delivered the Ballarat gold project to LionGold and until it develops other assets in Africa, Bolivia and Canada it remains its only source of gold production (40,000 ounces annually).
In support of its push to get to an annual production rate of 200,000 ounces, LionGold recently set the ball rolling on a $175m capital raising, expanding its firepower for acquisitions from scrip-only to include cash.
LionGold chief executive Nicholas Ng was open about the intent: "The $S200m we have proposed raising will provide LionGold with a war chest to take advantage of the immediate, extraordinary opportunities we have identified among gold global miners," he told the Singapore market.
Back in Ballarat, Gill was also forthright.
"I don't want to rub my hands with glee. But clearly one party's difficulties can be another one's opportunity. We find ourselves in a market with undervalued assets and investors just won't put their hands in their pockets to help anyone. So its a slam dunk for us, as we've got the backing and a bit of money. It is a good time to go shopping," Gill says.
That would be ringing alarm bells at ASX-listed Unity Mining. It has been in LionGold's sights lately, with the Singapore group acquiring a 13 per cent stake. An established 50,000 ounce a year gold producer at the Henty mine in Tasmania, Unity is also developing the 50,000 ounce a year Dargues Reef mine in NSW. While it also holds $27m of cash, Unity has a market cap of only $55m -- such is the disconnect between Australian and Asian valuations of gold stocks.
Gill says the company is not geographically constrained in buying assets. "We look at the asset on its merits, with its technical merit being the first hurdle to clear," he says.
"Clearly we would like to hitch operations to those in countries where we already have a presence. Currently we are exploring in Ghana and Nova Scotia, developing in Bolivia, and producing in Australia. Merger and acquisition is clearly the fourth growth prong," Gill says."
The Nova Scotia exploration exposure is through LionGold's $8m cash bid for Acadian Mining, announced last month. As revealed by The Australian, the major (indirect) shareholder in Acadian is Melbourne mining investor Joseph Gutnick. The Acadian bid is the second time this year that Gutnick's stable of mining interests have been the subject of a Singaporean play.
The first was Merlin Diamonds, with one of the key players behind the failed bidding group, Singapore's InnoPac, having shareholding connections with LionGold
