Hi Guys,
Read through some posts n announcements you guys have been putting up, with some valid questions about the company and concerns over why its not making money.
Having short-term invested in this in 2004 and making money off a lucky P&D whilst I was doing my research (I used to buy then research.. poor tactics.. trust me).
The thing most miss about this is that its an 'inferred mineral resource' rather than a mineral reserve. This one word difference means they can essentially make vague claims about what they think they have in the ground.
Lions gold is buying on the newly released 'reserves' of 620k ounces of gold. Their histogram of grades found shows most common grade is 2g/t statistically but 7.7g/t is the overall reserve due to outliers between 10.1 and 17.7g/t making a fair portion of drill results in this area also. This 620k ounces is very likely to be in the ground.
Their other resource (10million ounces) as seen on page 93 from the report can be seen as a pure assumption that 'THAR BE GOLD IN THEM THERE HILLS' as they have assumed, not calculated or drilled for, an average grade of 13.5 and just multiplied it by a depth and square area of the tenement.. This is highly improbable to ever be true.
In saying that they have a highly likely 620k ounces @ 7.7grams/t is one thing. The JORC code assumes a 100mm over and under burden (200mm) total burden per seam. CTO has stated its minimum seam width is 1m, but if you included material outside that 200mm as having to be mined, the feasibility study included on pages 121-151 breaks down immensely.
Wonder if Liongold will be so short sighted.
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