In an Oct. 23 research note, analyst Ryan Walker reported that his firm Echelon Wealth Partners added Lion One Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX) to its Watch List after meeting with the company's management at the recent Precious Metals Summit.
Lion One's flagship asset is Tuvatu, the alkaline high-grade gold project on Fiji's Viti Levu island. The current existing resource consists of diluted Indicated resources of 1.1 million tons at 8.46 grams per ton (8.46 g/t) gold, based on a 3 g/t cutoff grade. The Inferred resource totals 1.5 million tons at 9.7 g/t, or 468,000 ounces.
"Importantly," Walker pointed out, "about 80% of the existing resource is within just 200 meters (200m) of surface. Yet past drilling was done primarily within 300m from surface and only a small fraction went below 400m down.
Accordingly, the Canadian exploration company, earlier this year, launched a four-hole drill program to test for deep feeders to Tuvatu's existing high-grade resource.
Also noteworthy is that a preliminary economic assessment of Tuvatu, completed in 2015, showed robust economics, noted Walker. The report outlined an underground mine producing a total of 352,931 ounces of 11.31 g/t gold over the first seven years. The payback period was estimated to be 1.1 years.
This scenario would result in a post-tax net present value 5% of US$150 million and an internal rate of return (IRR) of 79% at a US$1,500 per ounce gold price. "We note the still robust 33% after-tax IRR even at $1,000 per ounce gold," Walker commented.
Further, Tuvatu is fully permitted for development, construction and mining by the Fiji government, and Lion One has a 21-year surface lease agreement at the project with local landowners and the iTaukei Land Trust.
Lion One's stock is currently trading at CA$0.90 per share.
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Disclosures from Echelon Wealth Partners, Lion One, October 23, 2019
Echelon Wealth Partners compensates its Research Analysts from a variety of sources. The Research Department is a cost centre and is funded by the business activities of Echelon Wealth Partners including, Institutional Equity Sales and Trading, Retail Sales and Corporate and Investment Banking.
I, Ryan Walker, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report.
Is this an issuer related or industry related publication? Issuer.
Does the Analyst or any member of the Analyst’s household have a financial interest in the securities of the subject issuer? No
The name of any partner, director, officer, employee or agent of the Dealer Member who is an officer, director or employee of the issuer, or who serves in any advisory capacity to the issuer. No
Does Echelon Wealth Partners Inc. or the Analyst have any actual material conflicts of interest with the issuer? No
Does Echelon Wealth Partners Inc. and/or one or more entities affiliated with Echelon Wealth Partners Inc. beneficially own common shares (or any other class of common equity securities) of this issuer which constitutes more than 1% of the presently issued and outstanding shares of the issuer? No
During the last 12 months, has Echelon Wealth Partners Inc. provided financial advice to and/or, either on its own or as a syndicate member, participated in a public offering, or private placement of securities of this issuer? No
During the last 12 months, has Echelon Wealth Partners Inc. received compensation for having provided investment banking or related services to this Issuer? No
Has the Analyst had an onsite visit with the Issuer within the last 12 months? No
Has the Analyst or any Partner, Director or Officer been compensated for travel expenses incurred as a result of an onsite visit with the Issuer within the last 12 months? No
Has the Analyst received any compensation from the subject company in the past 12 months? No
Is Echelon Wealth Partners Inc. a market maker in the issuer’s securities at the date of this report? No