LionGold Corp

[FFNow]

A small trivia -

Q: Which company is SGX has the highest P/E ratio?
A: LionGold Corp, with a P/E ratio of an astronomical 753!

It's involved in gold mining and is the only such stock listed in SGX. With gold in huge stardom, guess many people are punting on this stock.

---

I'm surprised such a stock is covered by a research house. Maybank-Kim Eng research covers this stock and I wonder what's the fundamental reason for doing so.

http://www.remisiers.org/cms_images/rese...ngpost.pdf

[greengiraffe]

An outdated article but the writing is on the wall even back then. I didn't post the article because it does not add any value to value investors...

GG

LionGold roaring ahead for mine hero

• BY:BARRY FITZGERALD
• From:The Australian
• September 04, 2013 12:00AM
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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.

[Clement]

An outdated article but the writing is on the wall even back then. I didn't post the article because it does not add any value to value investors...

GG

LionGold roaring ahead for mine hero

• BY:BARRY FITZGERALD
• From:The Australian
• September 04, 2013 12:00AM
• Increase Text Size
• Decrease Text Size
• Print
•
•
•

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.

Liongold, Blumont etc were kind of relying on the type of feedback loops described in George Soros' theory of reflexivity to sustain their valuations. I think it was pretty clear to any decent investor what they were doing. Sad that so many people got caught when the prevailing bias reversed.

[mkmk]

http://infopub.sgx.com/FileOpen/Annct_cl...eID=259688

Clarification of Unconfirmed Rumours

LionGold Corp Ltd (“LGC” or the “Company”) wishes to respond to a written query by the Business Times relating to unconfirmed rumours that the Company is under investigation by the Commercial Affairs Department.

The Company wishes to state that neither it nor any of its officers has been informed that it or any of its officers is under investigation by the Commercial Affairs Department. In addition, neither the Company
nor any of its officers has been contacted by the Commercial Affairs Department that the Company or any of its officers is under any investigation.

The Company is in full compliance with the Listing Rules of the SGX-ST.

The Company wishes to advise its shareholders not to rely on unconfirmed rumours when dealing in the securities of the Company. If in doubt, shareholders should consult their professional advisers.

[chialc88]

LionGold dismisses rumours of probe by CAD
Neither the company nor any of its officers were told of an investigation, says gold miner

BT website news

[chialc88]

LionGold anxious to hear from SGX - Anita Gabriel ST Senior Correspondent

extract partially:

LG CEO yesterday said the company has sent a written query to SGX on the investigations.

SGX has yet to respond.





A Life not Reflected is a Life not Worth Living.

[Dividend Warrior]

Lawsuits shine light on Goldman’s role in Asiasons, Blumont and LionGold crash

FRANKIE HO, The Edge
25 November 2013

Ipco International CEO Quah Su-Ling is taking a unit of Goldman Sachs to court for losses suffered during the collapse of Asiasons Capital, Blumont Group and LionGold Corp early last month. According to legal papers filed on Nov. 20 with the High Court in the UNK and seen by The Edge Singapore, the case revolves around a loan that Quah took from the bank to buy shares in two of these companies.

Quah opened a private wealth management account with UK-incorporated Goldman Sachs International in February, with the intention of taking a loan to buy shares in LionGold. She was introduced to the bank by an investment consultant named William Chan, who heads a Singapore-based investment management firm.

Under the loan agreement with Goldman, Quah initially pledged three million Asiasons shares as collateral for the credit facility. She first invested in Asiasons in 2008, and became a shareholder of Blumont shortly afterwards.

With the money from Goldman, she proceeded to buy LionGold shares, which, together with her Blumont shares, were subsequently placed in her investment portfolio as collateral to extend her loan facility. As the amount and value of her LionGold shares grew over time, the size of her loan increased correspondingly. By Oct. 1, it had increased to more than $61m, from $12.4m at the time she became a Goldman client.

When Blumont announced in July that it planned to raise funds through a rights issue, Quah was told she could tap her credit line from the bank to subscribe for the rights shares. She agreed to take up her full entitlement to the rights issue on Oct. 1, using the loan from Goldman, and instructed the bank on the same day to proceed accordingly.

Abrupt U-turn

To her surprise, the bank called her on the morning of Oct. 2 to demand that she repay her entire loan in cash by 1.30pm the same day. It’s unclear why Goldman suddenly decided to pull the credit line. By 1.37pm that day, she was served a notice of default through an email stating she had failed to meet her obligations to the bank, which proceeded immediately to sell her shares in Asiasons, Blumont and LionGold. On Oct. 2, Goldman sold 1.2m of Quah’s shares in Asiasons at $2.79 each. The following day, it sold more of her shares in Asiasons, in two batches, at $2.7524 and $2.7144 apiece respectively.

In seeking to prevent more forced sales, Quah found a buyer on Oct. 3 for her shares in LionGold and Blumont. The next day, she informed Goldman about the buyer – Vicario Investments from Hong Kong – and instructed the bank to stop force-selling her shares.

Goldman continued, however, to offload her shares on the market. On Oct. 4, before the Singapore Exchange halted trading on the three counters an hour after the opening bell, the bank sold 292,833 of Quah’s shares in Asiasons for $2.4246 each and 230,667 LionGold shares for $1.2372 apiece. By the time trading was suspended that morning, shares of Asiasons, LionGold and Blumont were down to $1.04, $0.875 and 0.88 respectively.

Other casualties revealed

Around that time, Quah found out that Goldman had also issued a notice of demand to three other individuals seeking payment of their outstanding loans. They include James Hong, Blumont’s executive director; and Ng Su Ling, who resigned as Blumont’s independent director on Nov. 18. All three defaulted on their loan obligations, according to court documents filed by Quah’s lawyers.

Ng, too is taking legal action on her own against Goldman. She tells The Edge Singapore that she signed a margin financing agreement with the bank in June. “I have filed a claim form, which is akin to a writ in Singapore. That would mean the commencement of a lawsuit. Notice of commencement has been sent to their lawyers in Singapore.” Her case will also be heard in UK.

“I can only say at this point that the suit is in connection with agreements signed with Goldman Sachs International and Goldman Sachs Singapore. In relation to the particulars of the claim, I cannot give them to you at the moment because my solicitors are working on it. It is a personal suit,” says Ng who has hired a Queen’s Counsel and solicitors from Reynolds Porter Chamberlain LLP (RPC), a London-based corporate law firm. RPC, which has offices in the UK, Singapore and Hong Kong, is known for taking on cases involving professional negligence.

Quah, too, has engaged a Queen’s Counsel to fight her case. Court papers filed by her lawyers from London-based Wiggin LLP allege a breach of duty on the part of Goldman. A breach of duty occurs when one person or company has a duty of care towards another but fails to live up to that standard.

Among other things, Quah’s lawyers claim that the bank had “perversely and irrationally threatened” the dump her investments on the open market and had indeed acted on their word. Goldman had also refused to consent to Quah’s plan to sell her shares in LionGold and Blumont to Vicario Investments from Hong Kong, the lawyers allege.

Goldman continued to force-sell Quah’s shares after SGX lifted trading on the three counters on Oct. 7. By the end of the trading session that day, all three stocks had fallen substantially more – Asiasons closed at $0.15, LionGold at $0.25 and Blumont at $0.13. More forced sales were carried out by the bank over the following days.

Near the end of October, the Monetary Authority of Singapore said it would launch an investigation with SGX into the activities surrounding the three companies, and that the fallout of the crash had raised broader issues regarding the market’s structure and practices, which they intend to review and change if necessary. Around that time, the three companies called off or scaled down certain investments previously announced.

Suspicions addressed?

By the time the heavy selling of the three stocks early last month receded, Blumont, LionGold and Asiasons had lost more than $8b in combined market value. Now, as aggrieved investors are left licking their wounds, the lawsuits by Quah and Ng may shed some lights on how the entire saga came about, who some of the players behind the scenes were, and even address certain suspicions by investors.

Blumont disclosed in an SGX filing on Oct. 3, a day before the crash, that Ng sold one million shares for $2.38m on Oct. 2, paring her stake in the company to 3.01% from 3.07%. That meant the shares were sold at about $2.38 apiece, well above Blumont’s last traded price of $0.88 on Oct. 4, when SGX halted trading on the three counters barely an hour after opening bell. Many investors had taken the sale to mean she acted on insider information.

By Ng’s account, however, the sale was not her decision. “It wasn’t voluntary. It was due to forced selling,” she tells The Edge Singapore. Since then, she has had more of her shares forced-sold, not only in Blumont but also LionGold. Her current stakes in Blumont is about 1.7%. Her stake in LionGold is 0.19%.

Ng herself is a lawyer at a firm in Singapore that advises on dispute resolution and litigation matters. While she is no longer on the board of Blumont, she remains an independent director at LionGold. “I needed to concentrate on my legal practice. It was really a toss between Blumont and LionGold,” she says.

“Where Blumont is concerned, I figure that a lot of things are happening and I do not want to have to take leave every now and then from the board to concentrate on my personal matters. If I do that, things may not get done because we like to have all the independent directors agree and consent to whatever that company wants to do.”

Ng joined Blumont as an independent director in September last year, a few months before the company started acquiring assets in the minerals and energy resources sectors. With her departure, Blumont is short of one independent director. The company is looking for a replacement. Blumont’s incoming chairman, Alex Molyneux, told The Edge Singapore last month that the company will have a new management team and board of directors in due course.

“The company has to have a board with more experience in the sector. I’m the first guy with that,” said Molyneux, who used to be CEO of Toronto and Hong Kong listed SouthGobi Resources, a coal miner with operations in Mongolia. He will replace Neo Kim Hock as chairman once he completes a transaction to take a 5.2% stake in Blumont by buying shares from Neo and an unidentified investor at an indicative price of $0.40 a share.

Edward Naylor, Goldman’s Hong Kong based spokesman, declines to comment about the lawsuits, which come at a time when the bank is embroiled in a case with another investor in Singapore. Businessman Oei Hong Leong sued Goldman in September for allegedly giving misleading advice that cost him ¥3.18b ($39.5m) in losses on currency options. According to reports, Goldman has asked the High Court in Singapore to stop Oei’s lawsuit, saying that both parties should pursue private arbitration instead.

[chialc88]

very fishy indeed...

seems like SGX suspend the stocks due to sharp price movement (downward) instead of irregularity.

This would be the manual stop-loss activated by SGX...

On second thought, in theory assume there is no irregularity:
1. is market regulator allow to suspend a stock because of sharp price movement instead of irregularity?

2. Is it then appropriate for market regulator to allow trading but designate a stock because of sharp price moment instead of irregularity?




A Life not Reflected is a Life not Worth Living.

[chew]

Reuters Code: LION.SI
Company: INVESTOR CENTRAL: LionGold Corp Ltd
Slug: Why is it raising funds through a person barred by US Securities and Exchange Commission?

Date of Report: 30/11/2013
Producer: Ashish Saxena



The founder of Jett Capital has been barred by US SEC on grounds of his indulgence in US$350 mln fraud in US in 1990s. Read the full story for 15 questions that need to be asked.




30/11/2013 – The crash in the stock price of LionGold on October 4 has now had an impact on its financials.

While the authorities are investigating the matter, LionGold claims it's business as usual, except for a big fair value loss on its investments in other companies with which it shares directors and shareholders.

It reported Q2 FY14 earnings on November 12:

Revenue: +52.2% to S$45.7 mln
Net Profit / (Loss): (S$48.7 mln) vs (S$1.5 mln)
Fair value gain/(loss) on financial assets: (S$49 mln) vs S$1 mln
Cash flow from operations: (S$0.4 mln) vs S$16.4 mln
Dividend: Nil
Order book: Not disclosed

While the Q2 earnings period ended on September 30, the Board of Directors of LionGold decided to value the financial assets as on November 8.

Investor Central. We keep your investments honest.

1. Where are S$5.6 mln worth of 'property, plant and equipment' on its books?

In its Q2 FY14 earnings (page 6), LionGold claims its 'property, plant and equipment' dropped to S$53.7 mln on September 30 compared to S$60.2 mln on March 31.

During the six months period, it made the following changes to 'property, plant and equipment': charged depreciation of S$4.9 mln, wrote-off assets worth S$59,000, bought new assets worth S$4.4 mln and sold assets for S$1.5 mln at a gain of S$1.1 mln (refer pages 8 & 9 of the Q2 earnings report).

So taking into account all of the above changes, the 'property, plant and equipment' of LionGold works out to be S$59.3 mln as on September 30.

That's S$5.6 mln more than the closing balance on September 30 as per the balance sheet of LionGold on page 6 of its Q2 earnings report.

Likewise, the numbers for 'mining properties' of the company don't add up for us.

2. Where are S$700,000 worth of 'mining properties'?

According to the Q2 earnings report (page 6), LionGold had S$9.3 mln worth of 'mining properties' on March 31 which has now dropped to S$7.2 mln on September 30.

During the six months period, LionGold amortised S$6.8 mln and added S$5.4 mln to its 'mining properties' (refer pages 8 & 9 of the Q2 earnings report).

Accordingly, the balance of 'mining properties' on September 30 should have been S$7.9 mln.

That's S$0.7 mln more than closing balance as per Q2 balance sheet (page 6).

3. Where did it record a S$12.6 mln 'exploration and evaluation expenditure'?

LionGold's 'exploration and evaluation expenditure' dropped to S$140.4 mln on September 30 from S$141.2 mln on March 31 (page 6 of Q2 earnings report).

But during the six months period, LionGold spent S$11.8 mln on 'exploration and evaluation expenditure' (page 9 of Q2 earnings report).

So in the absence of any impairment charge, LionGold's 'exploration and evaluation expenditure' should have been S$153 mln on September 30.

Now that's S$12.6 mln more than the closing balance on September 30 as per Q2 earnings report (page 6).

4. Has LionGold's acceptance of shares, instead of cash, for assets sold backfired on minority shareholders?

LionGold Corp claims to have amassed its entire portfolio of 'financial assets' (current assets) by way of marketable securities it received in consideration for the disposals of its interests in Industrial Power Technology Pte Ltd, Think Greenergy Ltd and Think Environmental Ltd (page 15 of Q2 earnings report).

According to LionGold's 2013 annual report (page 107), it acquired S$31.6 mln worth of financial assets (current) during FY13.

All of these quoted securities came to it from Mr Wan Nizamuddin Bin Wan Sulaiman (who acquired LionGold's 21% stake in Think Environmental Ltd (TE) for S$8.6 mln, and 21% of Think Greenergy Ltd (TGE) for S$16 mln) and SGX-listed Annica Holdings Ltd (which bought LionGold's 60% stake in Industrial Power Technology Pte Ltd for S$10 mln).

Investor Central had first reported on both the above deals on April 3 and October 21.

As already highlighted in our October 21 story, LionGold and Mr Wan Sulaiman agreed the entire consideration would be paid in cash.

But as it turned out later, LionGold accepted a large part of the consideration in the form of a 3.44% stake in SGX-listed Innopac Holdings Ltd.

Innopac Holdings Ltd's stock price has crashed from 26 cents to 3 cents.

LionGold's conduct in the case of disposal of a 60% stake in Industrial Power Technology Pte Ltd to SGX-listed Annica Holdings Ltd wasn't very different than that with Mr Sulaiman.

While it was agreed that Annica Holdings Ltd would pay S$10 mln consideration in cash, LionGold later accepted S$10 mln worth of quoted securities instead.

Apparently, these quoted securities were shares in other listed companies in the network.

Interestingly, in an SGX filing on December 28, 2012, Annica Holdings Ltd claimed the entire S$10 mln consideration was paid in cash to LionGold.

In another announcement on the same day, Annica Holdings Ltd claimed to have paid the entire cash proceeds of S$4 mln it raised from a placement issue to LionGold.

However, in its 2012 annual report (page 58), Annica Holdings Ltd claims to have paid just S$7.5 mln 'non-cash consideration' for acquiring the 60% stake in Industrial Power Technology Pte Ltd.

So many contradictions in an apparently simple deal make us curious.

But whatever happened, the shareholders of LionGold are the ones at the losing end.

First, LionGold never received the cash for the assets it sold.

And now LionGold seems to have lost most of the money after its 'financial assets', which it received in lieu of cash, crashed on October 4.

5. Where is the S$2.5 mln cash from the sale of 38 Kallang Place?

Annica Holdings Ltd had also agreed to acquire from LionGold a property at 38 Kallang Place in Singapore, for S$2.5 mln in cash.

As the sale was not completed in FY13, LionGold classified the property as 'assets held for sale' in its balance sheet on March 31, 2013 (pages 64 & 115 of the 2013 annual report).

The sale was finally completed on July 15.

But to our surprise, LionGold didn't record any cash inflow from disposal of 'assets held for sale' in its H1 FY14 cash flow statement, even as the asset no longer appears on the balance sheet on September 30 (pages 6 & 9 of Q2 earnings report).

Moreover, LionGold didn't record any gain on disposal of 'assets held for sale', even though the property was to be sold for S$2.5 mln against the book value of S$1.4 mln.

So, why did it not record a S$1.1 mln gain on disposal of 'assets held for sale' during H1 FY14?

Did LionGold agree to sell the property at book value, instead of the earlier agreed price of S$2.5 mln?

Or, did it forget to account for the gain in its income statement and cash flow statement for H1 FY14?

6. Why did it repay S$4 mln long-term loan within a quarter of borrowing it?

According to page 7 & 9 of LionGold's Q1 earnings report, it borrowed S$4 mln in non-current loans during the first quarter of FY14.

However, according to its Q2 earnings report (pages 7 & 9), LionGold repaid S$7.2 mln worth of loans during Q2, including S$6.7 mln non-current loans.

The S$6.7 mln non-current loans repaid during Q2 included S$4 mln loan LionGold borrowed in Q1.

Therefore that makes us wonder why LionGold repaid long-term loans especially as the S$4 mln loan was only taken out a couple of months earlier.

Who was the lender of S$4 mln loan in Q1?

7. Where is the S$ 2 mln in cash from the sale of escrow shares?

According to the Q2 earnings report (page 9), LionGold received S$2.2 mln cash proceeds from sale of escrow shares.

The escrow shares relate to LionGold's acquisition of Vista Gold Antigua Corp from ASX-listed Republic Gold Ltd.

In essence, Republic Gold transferred 25% of LionGold's newly-issued shares to an Escrow Agent for 36 months.

Investor Central first reported on the deal on October 16.

In an announcement on June 14, 2013, Republic Gold informed its shareholders that it had ordered the Escrow Agent to sell 2 mln shares of LionGold.

But surprisingly, Republic Gold said it did so on the instructions of LionGold.

To settle the acquisition of Vista Gold Antigua Corp, Republic Gold paid the entire sale proceeds of those 2 mln shares to LionGold.

Unfortunately, we can't find an announcement where LionGold disclosed this development to its shareholders.

In essence, LionGold issued 2 mln new shares to Republic Gold, locked them in an escrow account, and sold them in the market to earn cash.

Now, companies issue new shares for cash all the time, but this route is a little more circuitous than usual.

Maybe LionGold would argue that it had expenses, for which the 2 mln share proceeds were used.

But then, what's even more curious is that LionGold's Q1 earnings report (ending June 30, 2013) didn't highlight such cash flow from Republic Gold.

Therefore that makes us wonder if the shares were not sold before June 30.

But now that LionGold's H1 FY14 cash flow statement records the cash inflow from the sale of escrow shares, it seems the shares were sold after June 30 – more than two weeks after Republic Gold announced it had done so.

The Q2 earnings report doesn't highlight where in the income statement or the balance sheet LionGold recorded the sale of escrow shares.

We are scratching our heads to figure it out.

8. Is LionGold's leadership to blame for a S$49 mln loss?

LionGold recorded a S$49 mln 'fair value loss on financial assets at fair value through profit and loss' during Q2 (page 4 of Q2 earnings report).

This sounds like a harmless, non-cash charge.

The problem is that LionGold accepted more than S$30 mln worth of quoted securities in lieu of cash on the disposal of assets.

In other words, the shareholders are S$30 mln cash poorer than they need have been (maybe more, if Annica handed over quoted securities for the Kallang Place property).

LionGold sold just S$6.3 mln worth of quoted securities in the quarter ended September 30 (page 9 of Q2 earnings report).

And after the crash of October 4, the quoted securities are worth just S$7.8 mln as on November 8 (page 6 of Q2 earnings report).

The quoted securities were worth S$61.9 mln on June 30 (page 6 of Q1 earnings report).

Clearly, LionGold had all the time to recover its principal investment of about S$30 mln.

Now, it has not only lost the gains but also about half of its principal investment.

We are also curious if there is a timing correlation between LionGold's sale of S$6.3 mln worth of quoted securities during Q2, which is when it repaid S$4 mln long-term loan it borrowed in Q1.

9. Where did it spend S$7 mln on 'care and maintenance expenses' during H1 FY14?

LionGold says the amount was spent on operations at Owere Mines Limited and Minera Nueva Vista SA (refer page 16 of Q2 earnings report).

The company has expensed the entire amount to the income statement instead of capitalising as 'exploration and evaluation expenditure'.

Apparently, it doesn't expect to recover the expense.

Therefore, on what things did it spend the S$7 mln?

10. Will Ng Su Ling resign from LionGold's board?

On November 18, Ms Ng Su Ling resigned as an independent director on the Board of Blumont Group Ltd.

The announcement said she resigned to 'focus on her other personal commitments'.

But a Business Times article on November 19 said Ms Ng has filed a suit against Goldman Sachs International and Goldman Sachs Singapore and she decided to leave Blumont Group to focus on the suit.

Ms Ng also said that she might have to make frequent trips in relation to the suit to London.

Ms Ng didn't reveal to the Business Times the reasons for which she was suing Goldman Sachs, as her solicitors were still working on the suit.

But a few days later, an article in The Edge Singapore, revealed Ms Quah Su Ling (not Ng Su Ling) – the CEO of Ipco International Ltd – was also suing Goldman Sachs.

In essence, Ms Quah opened a private wealth management account with UK-incorporated Goldman Sachs International in February 2013, with the intention of taking a loan to buy shares in LionGold.

Initially, she pledged three million Asiasons shares as collateral for the credit facility.

With the help of that facility from Goldman Sachs, Ms Quah bought shares of LionGold for S$12.4 mln which were worth S$61 mln on October 1.

The trouble began, as Ms Quah claims, when Goldman Sachs agreed to loan her money for subscribing to the rights issue of Blumont Group on October 1 but recalled the loan the next morning.

Goldman Sachs asked her to repay the loan by 1:30pm on October 2, claims Ms Quah.

As Ms Quah missed the deadline, she claims, Goldman Sachs off-loaded her pledged shares of Asiasons, Blumont and LionGold in the market on October 2, 3, 4 and 7.

Based on the documents filed with the court, Reporter Frankie Ho at The Edge wrote Goldman Sachs also issued loan-recall notices to James Hong – the Executive Director of Blumont – and Ms Ng Su Ling – the former independent director of Blumont and currently the independent director of LionGold.

Commenting on the resignation as an independent director of Blumont Group, Ms Ng told Edge Singapore that she resigned to focus on her legal practice.

While choosing which board to resign from, Ms Ng says "It was really a toss between Blumont and LionGold".

"Where Blumont is concerned, I figure that a lot of things are happening and I do not want to have to take leave every now and then from the board to concentrate on my personal matters. If I do that, things may not get done because we like to have all the independent directors agree and consent to whatever that company wants to do", she added.

While Ms Ng told the Business Times that she was resigning from Blumont's board because of the suit against Goldman Sachs, The Edge Singapore quotes her saying the resignation was because she wanted to focus on her legal practice, in general.

But the bigger question is why Ms Ng chose to resign after the October 4 crash and after most of her shares were sold in forced-selling?

Also if she couldn't have devoted proper time to the Blumont's Board, which is why she resigned, how will she manage to contribute to LionGold's Board?

11. Why did Ms Ng Su Ling not disclose stake sales were forced?

Ms Ng told The Edge Singapore that she signed a margin financing agreement with Goldman Sachs in June 2013.

Ms Ng sold 1 mln shares of Blumont on October 2 for S$2.38 mln and 335,333 shares of LionGold on October 4 for S$393,983.

Investor Central had first reported on Ms Ng's stake sales in our earlier report titled "What prompted independent director to sell, just before the dramatic sell-off?" (October 8).

Interestingly, Ms Ng told The Edge Singapore that the sale of shares of Blumont and LionGold on October 2 & 4 wasn't a voluntary, but a forced-sale.

But then why didn't Ms Ng declare the forced sale in the announcements filed on the SGX on October 3 & 7?

12. What prompted Ms Quah Su Ling to buy shares in LionGold, when her company IPCO was already a shareholder?

According to The Edge Singapore article, Ms Quah Su Ling opened a private wealth management account with UK-incorporated Goldman Sachs International in February 2013, with the intention of taking a loan to buy shares in LionGold.

But IPCO International Ltd – of which Ms Quah is the CEO – was already a shareholder of LionGold Corp Ltd.

According to LionGold's 2012 annual report (page 106), Friendship Bridge Holding Company Private Ltd – a wholly-owned subsidiary of IPCO International Ltd – was a shareholder of LionGold as on June 29, 2012.

Also, according to LionGold's 2013 annual report (page 157), Sun Spirit Group Ltd – another wholly-owned subsidiary of IPCO International Ltd – was a shareholder of LionGold as on June 25, 2013.

Also, Ms Quah Su Ling was the seventh largest warrant-holder of LionGold as on June 25, 2013 (page 158 of 2013 annual report).

Just ahead of Ms Quah was Nueviz Investment Private Limited, another wholly-owned subsidiary of IPCO International Ltd, as the sixth largest warrant-holder on June 25, 2013.

Therefore that makes us wonder if it is appropriate for the CEO of IPCO International Ltd to buy shares and warrants of LionGold in which IPCO already held a stake.

That also makes us curious about the warrant-holders who exercised their warrants to convert them into shares of LionGold during the months prior to the October 4 crash.

Did Ms Quah Su Ling convert her warrants into LionGold's shares before the crash of October 4?

13. Which entities are 'related' to B&C Gold Pty Ltd?

On November 21, LionGold announced an agreement with B&C Gold Pty Ltd in which Owere Mines Ltd – a subsidiary of LionGold in Ghana – would procure and process 'gold bearing waste tailings' from B&C Gold.

'Gold bearing waste tailings' are the remains of previous gold mining operations and may pose a threat to the environment if the waste leaches into ground water.

According to the agreement, Owere Mines will purchase a minimum of one million dry metric tonnes of gold bearing tailings from B&C Gold.

B&C Gold will be responsible for all costs and approvals associated with the mining, extraction, blending and delivery of the tailings to Owere Mines.

Owere Mines will pay B&C Gold an aggregate purchase price (in two tranches) based on the amount of dry tonnes delivered, grade of tailings, monthly average gold price, and grade factor.

Owere Mines will treat and process the waste tailings and recover gold.

According to the press release, B&C Gold has entered into environmental clean-up agreements with Ghana's Apragya Stool Council and Nyafoman Stool Council to remove all gold bearing waste tailings from river and stream systems within the councils' land.

In essence, Owere Mines will buy waste from B&C Gold and try its luck finding gold in it.

Not to forget, Owere Mines will bear the cost of treating other harmful and poisonous contents in the tailings.

B&C Gold seems to be in an enviable sweet spot that it didn't have to process the waste tailings and yet it would make money by selling the waste to LionGold's subsidiary Owere Mines.

Owere Mines will begin procuring the waste tailings in March 2014, for a period of three years.

However, the agreement between Owere Mines and B&C Gold is to be renewed annually.

According to LionGold's press release, "B&C [Gold Pty Ltd], an Australian registered company, and its related entities have had over 8 years of experience within Ghana in operating and exploring gold mining and related business opportunities".

But according to Australian Companies' register, B&C Gold Pty Ltd was only incorporated in Australia on June 5, 2013.


So, it must be the 'related' entities of B&C Gold which must have such long history.

Which 'related' entities are they?

14. Who owns B&C Gold Pty Ltd?

We have already highlighted LionGold's loss-making acquisition in Ghana in our earlier report titled Where did LionGold's S$6 mln investment in Mornington Offshore end up?.

In that report, we revealed how LionGold paid S$6 mln to Avalon Ventures Corporation which seems related to Dato' John Soh Chee Wen.

Therefore that makes us curious about the owners of B&C Gold Pty Ltd.

15. Why are LionGold, Blumont, Innopac and Asiasons raising funds through a person barred by US Securities and Exchange Commission (SEC)?

LionGold has resumed fund-raising talks with New York based Platinum Partners Value Arbitrage Fund LP.

According to a November 15 announcement, LionGold has signed agreements with Wintercrest Advisors LLC, Mr Stephen Yeo Mah Ai and Mr Sia Ah Kheng to raise S$18 mln by issuing 98.186 mln new shares.

WinterCrest Advisors LLC is wholly-owned by Platinum Partners Value Arbitrage Fund LP.

But this is not the first time that LionGold is attempting to raise funds through Platinum Partners.

On August 14, LionGold announced a proposed placement of 180 mln new shares and 135 mln new warrants to raise S$194 mln.

The placees were: Carnegie Hall Group LLC, Platinum Partners Liquid Opportunities Fund and Spring Road Advisors LLC.

However, after the stock price crash of October 4, LionGold terminated the proposed placement on October 11.

Other than Platinum Partners, there is another common factor about the proposed placements of August 14 and November 15.

On both occasions, Jett Capital Advisors LLC introduced the subscribers to LionGold.

Also, in August, Jett Capital introduced Platinum Partners to SGX-listed Innopac Holdings Ltd.

Jett Capital also introduced investors (which included Platinum Partners) to SGX-listed Asiasons Capital Ltd in September.

In October, Jett Capital acted as the sole global manager to SGX-listed Blumont Group Ltd's US$200 mln fund-raising from Platinum Partners.

Joseph Jett is the founder of Jett Capital Group.

In 1990s, Joseph Jett was alleged to have faked US$350 mln trading profits at Kidder Peabody, one of Wall Street's oldest and richest banks during those days.

In essence, Joseph Jett was alleged to have booked fictitious gains on forward trading contracts at the government bond trading desk at the bank.

Though Joseph Jett won the arbitration against his employer, Kidder Peabody, as he managed to show that his bosses knew of, and even encouraged, his dubious trading strategy.

In August 1998 a second case brought by the SEC again cleared Jett of fraud, but fined him over $8 million on the grounds of bookkeeping violations.

Both Jett and the SEC appealed against this decision.

Finally, on September 7, 2007, a US District Court delivered the following verdict:

"The United States District Court for the Southern District of New York entered a judgment enforcing the March 5, 2004 Opinion and Order of the Securities and Exchange Commission directing that Orlando Joseph Jett pay disgorgement of $8.21 million and a $200,000 civil penalty, and ordering Jett to cease and desist from future violations of certain provisions of the federal securities laws.

The Commission's Opinion and Order of March 5, 2004 found that Jett, while a government bond trader, managing director, and senior vice president of Kidder, Peabody & Co., then a registered broker-dealer, had, with fraudulent intent, exploited an anomaly in Kidder's automated trading records system to book non-existent profits of approximately $264 million, when in fact Jett's trading activities caused Kidder losses of $75 million. It further found that Jett's actions constituted a scheme to defraud under Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and that Jett's actions had violated the "books and records" provisions of Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-3(a)(2) thereunder."

The verdict added, "The Commission's Opinion and Order barred Jett from association with any registered broker-dealer, directed Jett to cease and desist from future violations of these provisions of the federal securities laws, and ordered Jett to disgorge the $8.21 million in bonuses Jett had received as a result of his fraudulent transactions and pay a civil penalty of $200,000".

Apparently, Joseph Jett is barred from associating with any registered-broker dealer.

In 2000, a BBC report described Mr Jett as a brilliant mathematician and a scholarship student at Harvard and MIT.

But Wikipedia adds the following about Joseph Jett:

"Jett has claimed to operate a hedge fund called Cambridge Matrix Funds, domiciled in the British Virgin Islands. However, the BVI Financial Services Commission, the regulator of such funds, has no listing for Cambridge Matrix in its comprehensive list of funds domiciled in the BVI.

In July 2008, the French news channel France 24 televised a feature following the Jerome Kerviel [a French trader who caused Société Générale a trading loss of €4.9 bln in 2008] trading losses, which featured an extensive interview with Jett. In it, Jett said that because of legal costs he has no money left to pay the SEC fines, and that he was living in the basement of an ex-girlfriend's house in Princeton, New Jersey. The France24 reporter said that Jett is running a financial consultancy domiciled offshore, which conducts its business from hired conference suites in New Jersey. The show televised Jett meeting with a client who was trying to raise $9 million for a business venture. At the conclusion of the report, the commentator said she believed that Jett was trying to use the France 24 program to show the SEC that he has no money to pay the fines due."

Wikipedia adds, "He currently operates a firm called Jett Capital Management LLC. According to its website, the firm offers asset management, advisory and private equity services, though it is unclear how Jett is able to perform these functions while being permanently barred from the securities industry".

Therefore that makes us curious if Jett Capital can legally act as a middleman between Platinum Partners and the SGX-listed companies.

We have sent these questions to the company (IR@liongoldcorp.com), Joseph Jett ( jettcapital@gmail.com), Ms Ng Su Ling (lynne@dhklaw.com.sg) and Ms Quah Su Ling (corp@ipco.com.sg) to invite them for an on-camera interview, and/or seek their written response.

The email to Ms Quah Su Ling, at corp@ipco.com.sg, bounced back.

Sofar, we have not had a reply from the others (which is why you are seeing this message).

Key financial ratios

The ticks and crosses below indicate whether the stock meets the following value investing criteria.
Price-book: 1x - "Price is what you pay, value is what you get" - Are you getting more than you pay for?
Yield: - - Does the stock pay a risk premium over fixed deposit rates?
Cashflow: (S$3.9 mln) - "Profit is opinion, cash is fact" - Is the company generating cash?
Total cash & equivalents: S$36.8 mln - Does the company have cash?
Source: Reuters
Management: LionGold Corp Ltd was ranked 174th in the Governance & Transparency Index, with a score of 42 points.

Major shareholder(s):
8.73% - Asiasons Capital Ltd
5.98% - Market Vectors Junior Gold Miners ETF
4.88% - Macquarie Investment Management Ltd
4.57% - Venaton Holdings Ltd


Consensus call: Not Covered
Price target: Not Covered

Sources & further information


Our reports frequently contain information gathered by Handshakes. Handshakes brings relationships between people, companies and their major financial transactions to life. You can now see who is connected to whom with one glance at our unique interactive maps. They provide you with a startling level of transparency and insight. Click on the logo for more.

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[LionFlyer]

Deals create interest, but doesn't necessarily lead to money. It seems to be a classic strategy of making noise / hope to sustain investor interest.

Here's another question, is the CEO of ISR Capital (Ms Quah Su-Yin), related to CEO of Ipco (Ms Quah Su-Ling)? The names seems too much of coincidence.

http://infopub.sgx.com/FileOpen/LGC_Infi...eID=266428