A NI 43-101 compliant feasibility study pegged the Jonnagiri gold project in Andhra Pradesh, India, as an economically attractive and robust project that can be developed into a viable gold mine.

The project is owned by Geomysore Services India Pvt. Ltd., in which Lionsgold Ltd. holds a 21.15% interest.

Geomysore intends to establish an open pit gold mine on the East Block to produce 495,000 tonnes of gold ore per annum at a rate of 1,500 tonnes per day, subject to funding.

The study estimated a posttax net present value, discounted at 8.48%, of US$13 million and a 16.8% internal rate of return, based on a base case gold price of 2,806 Indian rupees per gram, equivalent to US$1,301 per ounce.

According to the Aug. 15 release, part of the East Block JORC-compliant mineral resource has been upgraded to probable reserves of 2.8 million tonnes at an average grade of 1.68 g/t containing 151,020 ounces of gold metal, at a 0.6 g/t cut-off.

The life of mine, based on the current probable reserve, is estimated at seven years.

The study estimates 92.4% gold recovery through a gravity-carbon in leach processing circuit, which will produce 139,480 ounces of gold.

The peak funding requirement is estimated at US$39 million, including land acquisition and related capital expenditure and a 7.5% contingency cost buffer.

All-in cost of gold production, including mining, processing and capital costs, is estimated at US$753 per ounce, and cash costs are expected at US$563 per ounce.

As of Aug. 14, US$1 was equivalent to 64.089 Indian rupees.