LionGold slump hits local investors
Australian gold investors with exposure to Singapore company LionGold were on the wrong end of the company's curious share price slide on Friday, when the stock fell by more than 40 per cent.
LionGold, which has spent the past 18 months acquiring some of Australia's most marginal gold assets in exchange for its own shares, was put in a trading halt by Singapore authorities out of concern that the market was not fully informed.
Among the Australian assets LionGold has acquired since taking an interest in gold 18 months ago are the fields near Ballarat that hosted the Eureka stockade.
It has also acquired, or taken stakes in, marginal gold assets in Queensland and WA, plus a mine in Bolivia that has been considered to be at risk of nationalisation.
LionGold's preference for scrip transactions has left many Australian investors with an exposure to the company, which did not return calls in the wake of the slump on Friday.
One director, Gary Scanlan, said he was unable to comment because he was away in Tunisia.
The movement of LionGold's share price has been queried more than once, including during August when it rose nearly 40 per cent.
Two other Singapore companies with varying links to LionGold were also put into trading halts on Friday after their share prices fell spectacularly.
One of those, Blumont Group, has at least one common director with LionGold and slumped by 56 per cent ahead of raising money to make an expected takeover bid for Australian coal junior Cokal.
The other company, Asiasons, is a fund manager that owns the biggest stake in LionGold. It fell 61 per cent before also being put into a trading halt.
Friday's volatility on the Singapore stock exchange comes just days after Linc Energy announced plans to leave the Australian bourse in favour of listing in Singapore. The move was born out of frustration at Linc's share price volatility in Australia, and the belief that the stock was undervalued by the Australian market.