Lion One Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX; LLO:ASX) reports multiple bonanza grade zones and visible gold from grade-control drilling close to a newly discovered mineralized zone at its Tuvatu project in Fiji, including 88.07 grams per tonne gold (g/t Au) over 5.7 meters.
The URW1 lode is 120 meters east of the URA1 lode, where Lion One has already begun extracting material for its processing facility, which is under construction.
Mining at URW1 is expected to begin over the next two to four weeks. Miners have already extracted 475 tonnes from 14 cuts at the URA1 lode, the company said.
After the release of the new results, technical analyst Clive Maund of CliveMaund.com posted that the stock was an "immediate speculative Buy."
"Its recent performance has been rather lackluster compared to many stocks across the sector, which has been due to a supply overhang that we can see on longer-term charts," Maund wrote Tuesday. "But as they say, 'Past performance is not always a guide to future performance.'"
After the release of the new results, technical analyst Clive Maund posted that the stock was an "immediate speculative Buy."
When the company's mining lease at the project was extended last year through February 2035, ROTH Capital Partners analyst Mike Niehuser called Tuvatu "one of the highest-grade gold mines in the world."
"We believe that Tuvatu is competitive with Fiji's Vatukoula, which has operated for over 85 years," Niehuser wrote in a December note. "The granting of the Tuvatu Mining Lease (SML 62) de-risks the project, making it attractive to major mining companies."
ROTH has a Buy rating and a CA$2.50 per share target price on the stock, which would be more than double Monday's price of CA$0.90 per share.
The Catalyst: 1,396 g/t Au Over 0.3 Meters
Drilling at URW1 intersected multiple bonanza-grade zones, Lion One said. Including:
- 07 g/t Au over 5.7 meters, including 1,396 g/t Au over 0.3 meters
- 52 g/t Au over 5.55 meters
- 93 g/t Au over 7.2 meters
- 12 g/t Au over 9.3 meters
- 48 g/t Au over 9.6 meters
- 6 g/t Au over 6.6 meters
- 97 g/t Au over 5.4 meters
- 85 g/t Au over 6.9. meters
Technical analyst Clive Maund of CliveMaund.com noted in December as well that the stock looked like a "good value" then at CA$0.79.
"Anyone holding should stay long," he said at the time. "This is a good point at which to make fresh purchases."
High-grade gold from the URW1 lode will contribute to the stockpile the company is building for the processing facility, which is scheduled to start up in the fourth quarter of this year.
The mineralization consists of "abundant free gold," the company wrote, often associated with light to dark gray chalcedonic quartz and roscoelite, locally accompanied by minor amounts of pyrite, sphalerite, galena, and lesser chalcopyrite.
The URW1 lode consists of narrow high-grade to bonanza-grade veins and vein swarms that strike north-south and dip east, the company said. It measures about 300 meters north-south by about 300 meters vertically, forming one of the major north-to-south trending lodes recognized in this part of the Tuvatu deposit.
To date, 34 diamond drill holes totaling 3,538 meters have been sunk in the URW1 lode system.
Lion One said URW1 "system represents the next main area of mining and extraction of high-grade mineralization at Tuvatu," the company wrote in a release. "Development has commenced with first-grade control and mapping expected shortly."
First Modern Extraction From Site
Lion One plans to operate the plant at an initial production capacity of 300 tonnes per day for the first 18 months before increasing capacity to 500 tonnes per day in mid-2025. Initial mining will focus on the near-surface resource while advancing underground development.
The drilling campaign this year will be focused on grade control of the near-term production blocks, identifying separate mineralized systems within the greater Navilawa caldera, and completing geophysical surveys to delineate further drill targets, the company said.
The company is using airleg mining at Tuvatu, allowing the company to deliver low-cost tonnage at minimum mining widths of 1.8 meters and a rate of advancement of 4 meters per day.
ROTH Capital Partners analyst Mike Niehuser called Tuvatu "one of the highest-grade gold mines in the world."
The mineralization mined at Tuvatu so far represents the first modern extraction from the deposit, Lion One said.
Vatukoula means "gold rock" in Fijian. Operated by Vatukoula Gold Mines, it shares the same geological setting as Tuvatu, an alkaline-epithermal gold deposit. Vatukoula has a resource of 3.8 million ounces (Moz) Au.
Streetwise Ownership Overview*
Lion One Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX; LLO:ASX; LY1:FSE)
Tuvatu is on the island of Viti Levu in the archipelago nation. A September 2020 Preliminary Economic Assessment (PEA) outlined an indicated resource of 1,007,000 tonnes grading 8.48 g/t Au for 274,600 ounces Au and an inferred resource of 1,325,000 tonnes grading 9 g/t Au for 384,000 Koz Au. The study used a cut-off grade of 3 g/t Au.
Lion One President and Chief Executive Officer Walter Berukoff founded Miramar Mining, which developed the 10 Moz Hope Bay gold project in Canada's Arctic. He sold Miramar to Newmont in 2007 in an all-cash deal worth CA$1.5 billion, a deal that came on the heels of him and his team selling Northern Orion Resources to Yamana Gold for a little more than CA$1 billion.
Ownership and Share Structure
About 14% of the company is held by insiders, about 6% by institutions, about 20% by other investors, and about 60% is retail.
The CEO Berukoff owns about 11.8% or 20.9 million shares, according to Reuters. Franklin Advisers Inc. owns 4.27% or 7.56 million shares.
Lion One's market cap is CA$159.21 million with 176.9 million shares outstanding, 155.66 million of the free-floating. It trades in a 52-week range of CA$1.66 and CA$0.59.
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1) Steve Sobek wrote this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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Disclosures for Mike Niehuser, ROTH Capital Partners, Dec. 16, 2022:
Shares of Lion One Metals Limited may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2022. Member: FINRA/SIPC.