Lion One Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX; LLO:ASX) achieved the major milestone of pouring first gold at its Tuvatu project on Fiji and did so on Oct. 10, Fiji Day, when the island celebrates its independence, reported ROTH Capital Markets analyst Mike Niehuser in an Oct. 11 research note.
"We believe that this should place Tuvatu among the highest-grade, gold producing mines in the world," Niehuser wrote.
The first gold pour came after Lion One's early completion of Tuvatu mine construction, the analyst pointed noted. The British Columbia-headquartered company started commissioning the mine in September.
169% return potential
The new Canadian producer offers investors a substantial return of 169%.
This is reflected in the difference between ROTH's price target on the company, of CA$2.50 per share, and the company's current price, of about CA$0.93 per share.
Lion One remains a Buy.
Focused on Zone 2
At Tuvatu, the miner expects to produce about 300 tons per day (300 tpd) initially then increase to 500 tpd in mid-2024, Niehuser reported. The mine's prospects look good, wrote Niehuser.
"As the Tuvatu deposit has high gold grades, we anticipate that the operation should have high margins and generate significant cash flow," the analyst added.
Through 2024, Lion One plans to mine the URW1, URA1 and Murau lode systems, all located in Zone 2. URW1 and URA1 are subparallel and near vertical. URA1 has a strike length of about 100 meters (100m) and a vertical extent of about 120m. URW1 contains multiple lodes, including URW1a and URW1b, also near vertical. Both their strike length and vertical extent are about 300m.
Murau comprises a series of stacked, generally flat-lying lodes having a roughly 110m strike length, a 55m vertical extent and a 100m downdip extension.
Now in progress
Lion One is in the process of grade control drilling and mining, reported Niehuser. Recent results of this drilling included:
- 19.78 g/t gold over 6m from 114m (hole TGC-0071)
- 18.08 g/t gold over 2.6m from 90m (hole TGC-0073)
- 45.89 g/t gold over 0.9m from 23.4m (hole TGC-0080)
- 14.83 g/t gold over 6m from 90.9m (hole TGC-0055)
More exploration upside potential
Niehuser highlighted that further exploration is warranted of the Tuvatu deposit at depth and of other targets in the Navilawa caldera. Given Tuvatu is an orogenic deposit within an alkaline gold system, it could grow into a multimillion-ounce gold resource, and its veins could extend in depth more than 1 kilometer. ROTH believes the area could host three or four more Tuvatu-like prospects, the analyst added.
"We believe that the Tuvatu gold deposit in Fiji has the potential to replicate the neighboring world-class Vatukoula gold mine," wrote Niehuser, noting that Fiji project was operated for 85 years and the resource there was 11,000,000 ounces.
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