Under the memorandum of agreement, LionGold will have the opportunity to acquire up to 60% of Gold Anomaly's PNG subsidiary Anomaly.
Anomaly owns the prospective Crater Mountain copper-gold project in addition to the Fergusson Island gold deposit and boasts in excess of 1 million ounces of gold resources.
LionGold will invest up to $A8.5 million through three tranches of convertible notes with the funds to be channelled into advancing Gold Anomaly's PNG portfolio.
Specifically, this will include starting mining operations at the Nevera deposit at Crater Mountain within 15 months, expanding the current 24 million tonne resource at Crater Mountain and reviewing the near-term production potential at Fergusson Island.
With a strong balance sheet and a focus on developing Australian gold assets into near-term production, Gold Anomaly executive chairman Greg Starr said LionGold was a perfect fit to the development equation.
"This transaction will enable us to further define then commence production in the high grade zone, further define resources at Nevera, continue the hunt for the prized gold copper porphyry feeder system at depth, extend regional exploration, and transition the company to producer tatus far more quicker than we had initially envisaged," Starr said.
"Importantly, given the challenging state of capital markets, the proposed joint venture is structured in a way that minimises our need for further capital raisings prior to production, whilst still advancing our PNG assets."
Gold Anomaly has had a string of exploration successes at Crater Mountain, recently intersecting a 280m intersection of porphyry copper and gold mineralisation at the bottom of a deep 984m hole at the Nevera prospect of its Crater Mountain.
The agreement is LionGold's seventh deal in two years as it hastens to acquire Australian juniors and operations.
Recent deals include its $55.3 million takeover bid for Victorian producer Castlemaine Goldfields and the acquisition of Bass Metals' Hellyer Mill operations.
The SGX-listed company has also injected $10 million into CitiGold Corporation's operation in Queensland.
Gold Anomaly shares were up 16.7% (0.1c) to 0.7c on heavy trading.