Proactiveinvestors Australia

Leyshon Resources director buys 750,000 shares

Thu, 01 Apr 2010 13:34:00 +1100

Leyshon Resources (ASX: LRL) director Richard Seville acquired 750,000 ordinary fully paid shares in on market purchases from 29th to 31th March at an average price of $0.194 cents per share for a total of A$145,584.00.

Leyshon successfully developed the Zheng Guang gold project into one of the province of Heilongjiang's largest gold mines yet discovered.

The joint venture established a 135 km² strategic ground position and delineated a JORC compliant Measured and Indicated resource of 740,000 ounces gold, 2.7 million ounces silver and 71,000 tonnes zinc.

Following a competitive tender the company and its partner sold the project for US$78 million in December 2009 to a private Chinese group.

The sale was achieved with minimal associated costs and represents a gain of US$20.2 million based on a total of US$22.5 million invested into Zheng Guang since inception of the project.

As a result the Company now has approximately A$48 million in cash and on term deposit in Australia and RMB1.98 million in Beijing. At current exchange rates this equates to approximately 12 pence per share (A$0.22 per share).

The Company is now focussed on acquiring and developing projects located in those countries and commodities which are of interest to Chinese groups for either offtake, partnership or sale.

Currently, Leyshon Resources shares are trading at $0.21, up 7% today.

Leyshon makes US$20 mln gain on Zheng Guang project exit, reviewing potential new projects

Fri, 22 Jan 2010 22:06:00 +1100

China focused junior miner Leyshon Resources (AIM, ASX: LRL) has completed the sale of its interests in the Zheng Guang project. The deal realised a gain of US$20.2 million, based on a US$22.5 million investment since the project’s inception. The company is actively pursuing its new investment strategy: it has entered an iron ore joint venture and is currently reviewing over 50 potential new projects.

As a result of the divestment Leyshon now has approximately A$48 million in cash and and RMB1.98 million deposited in Beijing, approximately equating to a combined 12 pence (A$0.22) per share. Leyshon are currently pursuing a number of potential new projects and plans a share buy-back.

Leyshon said it is actively reviewing potential projects under its new investment criteria; it has received over 50 projects for review. The investment criteria is focused on the acquisition and development of mineral and energy projects which may be of interest to Chinese groups.

"Following the strong shareholder support for the (new) investing policy, the company will continue to be located in Beijing and will draw on its six years' experience in China”, Leyshon MD Paul Atherley commented. The current focus is broadly on the region encompassing Northern China and Southern Mongolia, specifically targeting primarily coking coal and also iron ore.

According to the mining company, China currently has a strong focus on expanding the domestic production of both coking coal and iron ore, consequently the regional infrastructure’s rate of development is astonishing, Leyshon said. The company has quickly established excellent deal flow in these targeted areas and has entered into an exploration and production joint venture on the QHD Iron Mountain project in East China. It is actively working on a number of other joint venture opportunities.

The QHD Iron Mountain project is being developed through a 51:49% joint venture with the Qiqiha'r Tai Fu trading company. The project is located in one of the main iron mining districts in the East China Iron Belt, the Tang Shan district of Hebei, East China. The local iron mining industry is characterized by a large number of smaller operations mining magnetite from near surface deposits, which are processed through simple magnetic separation plants and produce smelter grade concentrate for sale at the mine gate.

Qiqiha'r Tai Fu is headquartered in Heilongjiang. Leyshon said it has known the company, which was one of the bidders for the Zheng Guang project, for some time. The JV is currently undertaking a 1,500 metre drill programme at QHD. Following up coincident ground magnetics and surface rock chip and geological mapping were carried out in December 2009. Leyshon expects the programme to confirm the size of the potential resource, and that the mineralogy is magnetite not hematite. Samples taken from the drilling programme will be used for metallurgical testwork. The programme and test work are expected to be completed in mid-April.

Earlier this month, Leyshon told investors it will conduct an on-market share buyback of up to 21.8 million shares, approximately 10% of the company’s share capital. In London, Seymour Pierce is conducting the buyback on the company's behalf, whilst Blackswan Equities are handling the buyback in Australia.

Leyshon Resources enters agreement to sell Zheng Guang Project

Tue, 22 Sep 2009 18:07:00 +1000

Leyshon Resources (AIM: LRL, ASX:LRL) has announced the conditional agreement on the long awaited divestment of its Chinese Zheng Guang Project. Trading in Leyshon resumed today following the update, this morning’s trading in London saw Leyshon Resources surge over 60% immediately after the news with its shares reaching 9 pence.

Today’s deal sees Leyshon’s Joint Venture company ‘Black Dragon Mining’ sell its total interest in the Zheng Guang project to the Heilongjiang Heilong Mining Company Limited (Heilong). Heilong Mining is the wholly owned subsidiary of China Metals Pty Limited.

Under the agreement, the joint venture will receive US$34 million in return for Black Dragon’s 70% stake in Zheng Guang, Heilong Mining will also assume Black Dragon's liabilities currently estimated to be US$1.5m. Heilong Mining is also obligated to make further royalty payments to the joint venture in the future which are estimated to be US$3m. All liabilities between the Company and related entities have been settled as part of the transaction.

The proceeds from the sale have been placed in escrow pending the timely completion of transaction related approvals. Transfer of ownership by the Company of its 70% interest in Black Dragon will only take place once all funds have been received.

The transaction is subject to Leyshon shareholder approval. A ‘notice of meeting’ is currently being prepared by the board which will include full details of the proposed transaction and the Company's proposed investing policy following the disposal.

Following completion of the proposed transaction, Leyshon will have no liabilities, cash and receivables of $47 million (Which equates to £29m and A$54m) equivalent to 13 pence per share or 24 cents per share.

In his accompanying statement Leyshon Managing Director, Paul Atherley commented on the company’s future development in Asia once its divestments are complete, Mr Atrherley stated;

“Following completion of the proposed sale we will have cash reserves in excess of US$44 million which will enable us to draw on our six years' experience in China and focus on acquiring and developing projects located in those countries and commodities which are of interest to Chinese groups for either offtake, partnership or sale.”

Leyshon Resources suspended pending announcement on Zheng Guang project disposal

Thu, 17 Sep 2009 15:39:00 +1000

Trading in Leyshon Resources Ltd (AIM & ASX:LRL) shares has been suspended on London’s AIM market pending an announcement concerning the proposed disposal of Leyshon’s interest in the Zheng Guang gold zinc project.

The company will make a further announcement as soon as the contractual terms have been finalised and certain conditions have been satisfied, at which time trading in the shares is expected to recommence.

Leyshon said in February 2009 it was is considering selling the Zheng Guang project in Heilongjiang in northern China to realise value from the business. It was considering various options to fund the development of Zheng Guang but found it difficult to secure funding on attractive terms in the then prevailing economic climate.

It had said it received a number of approaches regarding the potential sale of its interest in the project and progressed these parties under confidentiality agreement.

Leyshon Resources reduces costs at Zheng Guang by almost 20%

Thu, 30 Apr 2009 15:26:00 +1000

Following several months of review, Leyshon Resources today announced significantly reduced capital requirements for the Zheng Guang gold project in Heilongjiang in northeast China.

Leyshon Resources may sell Zheng Guang gold project

Mon, 16 Mar 2009 12:38:00 +1100

The half-yearly report from Leyshon Resource, published this morning, clearly demonstrates the effect of the company’s response to current adverse market conditions. The loss for the half year to December 2008 was almost half of that incurred for the previous comparable period – at AU$2,950,192 vs. AU$5,751,338 in December 2007. This has been achieved through the deferral of much major expenditure at the Zheng Guang gold project until after the Chinese winter season, and a careful pruning of all outgoings leading to a significant monthly reduction in spend. The result is a comfortable bank balance of AU$5.7 million.

During the half year under review, a 6,840 metre drilling programme was carried out at Zheng Guang, targeting extensions to the Main Ore Zone to both north and south, along with further testing of the Zheng Guang North prospect. Whilst the results were encouraging, further drilling is required to upgrade the current resource estimates. The access road was successfully completed and project earthworks begun before the company decided to shut down site-based activities for the winter, and the land acquisition programme has also been brought to a successful conclusion. The Land Acquisition Plan is presently with the Department of Land and Resources, and once it has been approved, Project Registration and the issue of the Mining Licence are expected to follow in 2009.

However, as announced earlier, the company require finance to make further progress at Zheng Guang. To make this less of a burden, a detailed review of the mine engineering design has been carried out over the winter, working with the Changchun Design Institute, to reduce the costs of bringing Zheng Guang into production.

In the meantime, Leyshon have been reviewing their options for Zheng Guang, and say that whilst interest in funding the project after all approvals have been granted remains, given the current financial climate such funding may not be forthcoming on acceptable terms, if at all. Thus they have also been pursuing other avenues for the realisation of value from Zheng Guang, which include the sale of their interest in the project, and negotiations with a number of parties are currently in progress under confidentiality agreements.

Leyshon considering sale of Zheng Guang gold project

Mon, 02 Feb 2009 00:00:00 +1100

Leyshon Resources - battening down the hatches

Thu, 27 Nov 2008 00:00:00 +1100

With running costs of just A$200,000 per month and almost A$8 million in the bank at the end of their September quarter, Leyshon Resources is probably better placed than most junior developers to survive the current uncertainties in the mining and exploration sector.

Leyshon Resources confident of securing finance for Zheng Guang

Thu, 30 Oct 2008 00:00:00 +1100

Leyshon Resources, the AIM and ASX listed mineral development company, jumped 17% after reassuring investors that it still planned to move the 70% owned Zheng Guang Gold-Zinc-Silver project north-eastern China to production.

Shares in Leyshon Resources have been hit hard in recent months, along with many commodity focused businesses, and in particular businesses that require financing to develop an asset.

Today the Company’s Managing Director reminded investors that Zheng Guang will be a low cost gold producer, and that project financing discussions were underway with three banks. The mine is anticipated to commence construction in April 2009, with commissioning scheduled for the end of 2009. Preparatory work on roads, power and sourcing equipment is already well underway.

Capital costs for the project are currently estimated at approximately US$54 million, and once in production, the mine is expected to move into production in 2010, producing 75,000 ounces of gold, 225,000 ounces of silver and 5,250 tonnes of zinc in concentrate for fifteen years at an operating cost between US$250-350 per ounce.

Leyshon also stated that it still has A$7.4 million in cash, as of 30 September 2008, and that it was in financing discussions with “three international banks…with strong balance sheets”.

Leyshon Resources is an ultra low-cost gold producer in the making

Thu, 24 Jul 2008 00:00:00 +1000

Leyshon also confirmed that the cash cost, per ounce, is actually lower than previous forecasts, at US$238 per ounce. At this sort of level, Zheng Guang will be an exceptionally strong cash flow generator and will be one of the lowest cost gold mines in existence.

Leyshon Resources confirms construction of main access road

Wed, 11 Jun 2008 00:00:00 +1000

Leyshon Resources (AIM & ASX: LRL) announced that construction of the main access road at the Zheng Guang gold project in Heilongjiang, northeast China has commenced.

“The 8.6 kilometre road will be the main access route for the project and has been located to minimise disturbance to local villagers. It will connect the project with the residential town of Heibaoshan and will include a fibre optic cable for broadband and other telecommunication links” the emerging gold producer said.

Leyshon expects the total cost to be US$0.728 million and should take 90 days to complete.

Leyshon Resources upgrades Zheng Guang Project resource

Mon, 28 Apr 2008 00:00:00 +1000

Leyshon Resources (AIM & ASX: LRL) announced a "substantially" upgraded resource estimate for the Zheng Guang gold-zinc project in China.

The revised resource estimate included an additional 43,500 metres of drilling conducted during 2007, and used a cut off grade of 0.5 grams per tonne gold. The result was an increase in the overall resource to 30 million tonnes, with a 60% increase in the measured and indicated resource to 16 million tonnes. Overall contained gold decreased by 4% to 1.16 million ounces, while contained silver rose 20% to 4.5 million ounces and zinc content jumped by 30% to 120,000 tonnes.

Leyshon Resources maintains momentum

Tue, 04 Dec 2007 00:00:00 +1100

Leyshon Resources Limited ( AIM / ASX: LRL ) announced it had placed orders for the manufacture and delivery of two ball mills at a total cost of US$2 million for its Zheng Guang gold zinc project in China.

The first ball mill is scheduled for delivery in August 2008 for the oxide circuit while the second ball mill will be delivered in September 2009 for the sulphide circuit. The combined capacity of the mills is 1.5 million tonnes per annum. The Company added that the price and delivery times compared 'very favourably' with overseas manufactured and supplied mills.

Nenjiang Power Bureau, the local power authority had also been contracted to connect the mine to the local power grid and engineering designs for the mine were expected to complete by the first quarter of 2008.

Managing Director Paul Atherley commented:

“Our strategy is to rapidly bring Zheng Guang into production combining the benefits of low Chinese capital and operating costs with smart Australian metallurgical design.

The cost and lead time of the ball mills compare very favourably with international standards and when combined with the remarkable infrastructure levels in Heilongjiang its hard to imagine a better location in the world to be developing a gold project right now.”