Lion Nets A$12.3M from Erdene Sale, Boosts Cash to A$50M

Lion Selection Exits Erdene with Strong Returns

Lion Selection Group Limited (ASX – LSX) has completed the sale of its entire shareholding in Erdene Resource Development Corp (TSX – ERD), realising approximately A$12.3 million. This marks a substantial gain on its original investment of A$2.8 million made back in 2012, underscoring the success of Lion’s long-term investment strategy in Mongolia’s mineral exploration sector.

Erdene’s journey from a promising exploration company to a near-production gold developer has been a rewarding chapter for Lion. The company’s discoveries at Altan Nar and Bayan Khundii have matured into tangible assets, with Bayan Khundii expected to commence gold production imminently. Lion’s Managing Director Hedley Widdup praised Erdene’s management and board for their professionalism and stewardship, highlighting the alignment of values between the two companies.

Strategic Portfolio Realignment and Increased Cash Position

The sale significantly reduces Lion’s legacy portfolio, which historically included international holdings predating its current Australian-focused investment approach. With the recent disposal of Atlantic Tin, PhosCo Limited remains the only material legacy holding. Post-sale and dividend payment, Lion’s net cash position stands at a robust A$50.3 million, providing ample firepower to pursue new opportunities in the mining sector.

Importantly, the transaction has enabled Lion to accumulate sufficient franking credits to pay its first fully franked dividend in many years. The company has declared a 2 cents per share fully franked special dividend, payable to shareholders registered as of 2 September 2025, with payment scheduled for 17 September 2025. This move signals Lion’s commitment to returning surplus capital to shareholders while maintaining flexibility for future investments.

Looking Ahead – Navigating Market Conditions and Growth Prospects

While the mining market remains subdued, Lion’s strengthened balance sheet positions it well to capitalize on emerging opportunities ahead of the anticipated next mining boom. The company’s strategy balances sustainable dividend payments with the need to support capital growth through selective investments. Investors will be watching closely to see how Lion deploys its enhanced cash reserves and whether further special dividends might follow should additional windfalls arise.

Overall, Lion’s exit from Erdene marks a pivotal moment in its portfolio evolution, reflecting both the maturation of past investments and a renewed focus on Australian mineral resource development. The coming months will be critical in observing how the company leverages its strengthened financial position to drive shareholder value.