Another analyst has started covering the well-located and well-managed Lion One Metals Ltd site, which has developed an alkaline epithelial gold deposit in Fiji, ROTH Capital Partners reports.
Lion One Metals Ltd.’s (LIO: TSX.V; LOMLF: OTCQX; LLO: ASX; LY1: FSE) The recent discovery of a high-quality feeder at its Tuvatu venture led ROTH Capital Partners to initiate coverage of the junior miner with a buy rating and C$2.50 target per share, analyst Mike Neuhauser said in a research note dated June 17. In comparison, Lion One’s current share price is around C$1.41.
“Lion One is developing high-quality production near-surface gold deposits, core feeding area drilling and Navilawa caldera exploration with a potential to exceed 10,000,000 ounces (10 Moz),” Niehauser wrote. The company is now completing the development of a low-cost underground mine in Tuvatu.
The analyst shared the three main factors that make Lion One an attractive company to invest in.
Tuvatu, a high quality alkaline gold deposit, has the potential to grow into a multi-million ounce gold resource. Niehuser points out that this type of deposit tends to host high-quality mineralization in minable widths and by vertical continuity at depths greater than 1 km (1 km).
Niehuser cited Vatukoula as a similar type of project falling on the same trend in Fiji as Tuvatu. It is large with 7-11 Moz and a high pitch and has an operating history of 85 years. Porgera, with a 16-35 Moz, is another example. These two projects and Tovato are all on the Pacific Ring of Fire.
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“Due to the proximity and many positive characteristics,” Niehauser wrote, “the location of Lion One in the Navilawa Caldera could match or be better than Vatukoula.”
Tuvatu’s current resource, calculated in January 2018 using a cut-off grade of 3 grams per ton (g/t) for underground development, consists of 1,007,000 tons at 8.48 grams/ton gold versus 274,600 ounces in the selected category and 1, 325,000 tons at 9 g/t. A ton of gold versus 384,000 ounces in the extrapolated category.
Recently, Lion One completed a hole (TUG-141) that encountered 20.86 g/ton of gold at 75.9 meters (75.9 meters), starting from just 443.4 meters deep at the bottom of the well.
“This indicates that Tovatu is well on its way to becoming one of the world’s next high-quality deep-sea gold mines,” Niehauser commented.
The Tuvatu Preliminary Economic Assessment (PEA) sets a five-year mine plan at the base gold price of $1,400 an ounce. It shows net present value after tax discounted at 5% of $121.7 million ($121.7 million) and an internal rate of return of 50.9%.
“The updated Project Implementation Plan outlines a conservative ‘start-up’ process for a modest-sized and economically viable underground gold mine,” Niehauser wrote. “However, the PEA has strong economics that we believe will certainly be revised with a higher level of confidence given the subsequent development.”
Together with Tuvatu, the company’s exploratory direction is located elsewhere in the Navilawa caldera, where the metallic strike spans 7 km. Already, Lion One has identified additional horizons in the caldera, such as Banana Creek and Jomaki-Ura-Kubu.
“Far from Tuvatu, given the early exploration results within the Navilawa caldera, we believe there are three to four additional Tuvatu-like possibilities,” Niehauser wrote.
Niehuser noted that Lion One is in a good financial position, with enough cash to fund the continued exploration and soft development of the Tuvatu and Navilawa caldera for at least a year, Niehuser noted. At the end of March 31, 2022, the company had approximately C$32.9 million in cash and C$10 million in short-term investments.
Besides a potentially world-class mining venture, Lion One has ample infrastructure, which gives it a competitive advantage, Niehuser noted. In terms of access, there is a network of roads to Tuvatu and throughout the caldera, and the airport is nearby. Company-owned assets supporting the exploration effort are the on-site screening plant and a fleet of seven drilling rigs.
Another advantage of Lion One is its strong management team, Niehuser wrote, made up of notable and experienced specialists in the mining industry, and their relationships with the Fiji government and local service providers, including geologists and excavators.
At the helm of Lion One is CEO and founder Walter Berukoff, who has been active in Fiji for more than a decade. His resume includes being the founder and CEO of Miramar Mining Corp. and Northern Orion Resources, La Mancha Resources, and the operation or operation of gold mines in seven countries. Pirokov is currently the Managing Director of Red Lion Management, a commercial banking firm.
It should also be noted that Quinton Heaney, a world-renowned geologist, has been and continues to be Tuvato’s technical advisor since 2019. His 25 years of exploration experience includes working with major gold companies such as Homestake Mining Co., Ltd. and Newcrest Mining Ltd. and Newmont Corp.
“The current team appears to be working in harmony to take the Lion One project and the Tuvatu project in the Navilawa caldera to the next level,” Niehauser added.
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Roth Capital Partners, Lion One Metals Limited Disclosures, June 17, 2022
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