Lionsgold Regulatory News (LION)

Lionsgold Limited

Feasibility Study Preliminary Results

Lionsgold Limited ("Lionsgold", "LION" or the "Company"), the gold-focused exploration company with assets in India and Finland, and a fintech subsidiary that provides physical gold online accounts, is pleased to report on the preliminary results of the NI 43-101 compliant Feasibility Study on the Jonnagiri Gold Project ("Jonnagiri" or the "Project") owned by Geomysore Services India Pvt Ltd ("Geomysore") in which Lionsgold holds a 21.15% interest.

The final results of the FS will be updated upon completion of the technical report. The findings detailed herein are based on the current financial model for the Project. The finalisation of the FS follows recent changes to the Indian tax system that result in the implementation of a comprehensive goods and services single tax (GST) and the exact impact of GST on the economic prospects of Jonnagiri will be contained in the final published FS findings.

Highlights

· Geomysore has concluded that Jonnagiri is an economically attractive and robust project that can be developed into a viable gold mine in India.

· Subject to funding, Geomysore intends to establish an open pit gold mine on the East Block, producing 495,000 tonnes of gold ore per annum at a rate of 1,500 tpd (subject to statutory approval to increase production from the currently approved 1,000 tpd).

· Part of the East Block JORC-compliant Mineral Resource has been upgraded to Probable Reserve of 2.8 million tonnes containing 151,020 ounces of gold metal, with an average grade of 1.68 g/t at a cut-off grade of 0.6 g/t.

· 92.4% gold recovery through a Gravity - CIL (carbon in leach) processing circuit, which would produce 139,480 ounces of gold.

· Life of Mine based on the current Probable Reserve is seven years.

· Net Present Value of USD$25 million (pre-tax) based on the domestic market gold price being the three year average of Indian Bullion Jewellers Association ("IBJA") Price, INR 2,806 per gram (equivalent of USD$1,301/oz based on USD$1 = INR 67.08), and applying an 8.48% discounted cash flow rate (as advised by Indian tax and accounting advisors).

· "All in Cost" of gold production, including mining, processing and capital costs, of USD$753/oz and cash cost of USD$563/oz (based on USD$1 = INR 67.08).

· Peak funding requirement of USD$39 million including land acquisition and related capital expenditure and a 7.5% contingency cost buffer.

· Construction period of 18-24 months following purchasing or leasing of land and Mine Developer/Operator contract being agreed.

· Targeting peak production rate of 1,500 tpd within six months from the completion of construction and commissioning of processing plant.

Cameron Parry, Chief Executive Officer of Lionsgold, commented: "We are delighted to report that the preliminary results of the feasibility study have resulted in a positive decision to mine.

"This is a major step towards establishing India's first privately owned gold producing open pit mine (since India gained independence in 1947) and materially increasing domestic gold production. With the FS data we intend to finalise the independent valuation of our India interests, including the Jonnagiri project and surrounding exploration assets within the licensed area. These include the West Block and South Block, where Geomysore has drill data which should, in time, expand the gold ore available and extend the mine life beyond the current seven years.

"With the FS data now available, the team at Geomysore can continue making progress with the tender process in respect of the Mine Developer/Operator contract and we expect those negotiations to be concluded this calendar year, subject to completing negotiations with local farmers over the coming months."

Key Preliminary Findings of Feasibility Study

A Feasibility Study is a technical and financial evaluation of a proposed mining project to determine whether the mineral deposit can be mined economically and to decide definitively whether to proceed with developing a mine.

A foreign exchange rate of USD$1 = INR 67.08 was used in the financial modelling and this announcement.

Financial Analysis

The financial model demonstrates an NPV of USD$25 million before tax over the life of the mine. Geomysore's Indian taxation consultants advised that the appropriate DCF rate to be applied to Jonnagiri is 8.48% and the same has been used in calculating the NPV. The IRRs calculated for the Project are 22.5% and 16.8% before and after tax, respectively.

The gold price used in the FS for the calculations was INR 2,806 per gram (3-year average of gold price fixed by the IBJA). The IBJA gold price in India incorporates the spot price for gold globally (3-year average of USD$1,222/oz) plus the import duty payable on gold imported into the country.

Key parameters of the financial analysis as reported in the FS are presented in the tables below.

Table 1 - Economic model inputs

Table 2 - Summary of operating costs

Table 3- Summary of Capital Costs

The key outputs of the Project as reported in the FS, based on mining only the Probable Reserve of 151,020 ounces of gold, are as per Table 4 below.

Table 4 - NPV calculation only mining Probable Reserve

There is low grade ore (0.3 - 0.6 g/t) and Inferred Resource within the optimised pit shell, which will be stockpiled separately during the LOM. Analysis was undertaken considering processing a portion of the low grade ore once capital costs had been repaid and processing of the Inferred Resource assuming that its grade and tonnage would be validated with additional drilling during mining operations. The key outputs of the financial analysis for such assumptions are shown in Table 5 below.

Table 5 - NPV based on processing low grade stockpiles and the Inferred Resource within the optimised pit shell

Mineral Resource Reclassification

Geomysore has conducted 28,569m of drilling (22,916m diamond core and 5,653m reverse circulation) on the Jonnagiri Mining Lease area, which includes East, West and South Blocks. Golder Associates, Perth, Australia, validated the drill programme and carried out JORC-compliant resource estimate in early 2017 totalling 361,000 ounces of indicated and inferred resource.

Ukwazi Mining Solutions (Pty) Ltd, Centurion, South Africa, carried out the mine design and mineral reserve estimate. Based on the Golder mineral resource model and the local operating costs provided by Geomysore, Ukwazi completed the optimisation with different capacities and various different cut-off grades.

The available mineral reserve for the East Block was determined to be 2.8Mt of ore at an average mill feed grade of 1.68g/t at a cut-off grade of 0.6 g/t, upgrading 195,000 oz of the Indicated Resource at East Block to 151,020 ounces of Probable Reserve.

The information in this statement which relates to the Feasibility Study on Jonnagiri is based on information compiled by Mr Gordon Cunningham who is a full-time consultant with Turnberry Projects Pty Ltd (Johannesburg, South Africa), a Professional Engineer with the Engineering Council of South Africa and a Fellow of the South African Institute of Mining and Metallurgy. Mr Cunningham, as lead FS consultant, consents to the publishing of the information in relation to the FS in the form and context in which it appears.

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About LIONSGOLD

Lionsgold is a London Stock Exchange AIM market quoted, gold-focused exploration and fintech company, with gold assets in India and Finland and a majority shareholding in a physical gold and silver online account provider.

Lionsgold's three core focuses are:

· Strategic partnership with leading India gold exploration and mine development company, Geomysore, in which Lionsgold has increased its holding to 21.15%;

· Majority ownership of a financial technology platform enabling people to hold physical gold through online accounts (www.indexgold.com); and

· Gold exploration and production in Finland.

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