Canadian resource company Lion One Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX; LLO:ASX) reported high-grade gold results from its infill and grade control drilling at its Tuvatu Alkaline Gold Project in Fiji.
Lion One said that assay results for infill and grade control drilling included a 6.6-meter interval of 83.47 grams per tonne gold (g/t Au) in the Main Zone of its project.
The company said the results were exceptional, including 1839.55 g/t, 934.91 g/t, and 300.47 g/t Au from Zone 5 of the deposit.
Since their initial release last week, the company has updated the results — with mostly higher numbers.
The Zone 5 area, which will be the second major part of the Tuvatu project, is scheduled for mining in early 2024. Grade control drilling is being conducted in the first part of Zone 5, anticipating future mining activities, while infill drilling is focused on areas in Zone 5 scheduled to be mined later.
This area includes the main north-south oriented lodes at Tuvatu as well as the upward extension of the Zone 500 feeder zone.
Highlights of the new Zone 5 drilling include:
- 83.47 g/t Au over 6.6 m (including 793.24 g/t Au over 0.6 m) (TUDDH-643, from 242.7 m depth)
- 314.27 g/t Au over 1.8 m (including 1839.55 g/t Au over 0.3 m) (TGC-0067, from 48.2 m depth)
- 104 g/t Au over 0.9 m (including 934.91 g/t Au over 0.3 m) (TGC-0067, from 53.3 m depth)
- 9.96 g/t Au over 6.8 m (including 165.95 g/t Au over 0.3 m) (TUDDH-653, from 89.5 m depth)
- 18.4 g/t Au over 3.3 m (including 95.63 g/t Au over 0.6 m) (TUDDH-643, from 111.6 m depth)
- 17.2 g/t Au over 2.7 m (including 124.52 g/t Au over 0.3 m) (TUDDH-651, from 194.5 m depth)
- 11.84 g/t Au over 3.9 m (including 48.27 g/t Au over 0.6 m) (TUDDH-650, from 203.5 m depth)
- 9.53 g/t Au over 3.9 m (including 55.08 g/t Au over 0.3 m) (TUDDH-653, from 53.0 m depth)
- 16.13 g/t Au over 1.5 m (including 72.46 g/t Au over 0.3 m) (TUDDH-637, from 161.7 m depth)
- 14.93 g/t Au over 1.5 m (including 23.89 g/t Au over 0.9 m) (TUDDH-650, from 192.6 m depth)
Lion One explained that infill drilling was conducted from the surface on approximately 20-meter centers while grade control drilling is being conducted from the underground on 5- to 10-meter centers.
Infill drilling is designed to increase understanding of the deposit in targeted areas while the latter provides higher resolution and understanding of the geometry and mineralization of lode arrays for underground development.
The company said that the results only represent the initial stages of a more systematic infill and locally grade control drilling program in Zone 5, as it has a strike length of 300 meters in the north-south direction and a vertical extent of approximately 250 meters.
There were a total of 14 infill drill holes in Zone 5 that targeted near-surface portions of the main UR lodes and there were 12-grade control drill holes that have been completed in the same area.
The Catalyst: Tuvatu Zone 5 Mining and Production in 'Early 2024'
Zone 5 mining is set to start by early 2024, and production to start in the "near term." Once the Zone 5 drilling commences production, Lion One will have two major zones of very high-grade, near-surface mineralization developing and producing simultaneously.
The company already boasts of a unique high-grade permitted gold project with a clear path to significant production, as it has already commenced mining in the URW1 area last May 2023.
Taylor Hard Money Advisors Inc. noted in its July 2023 Gold report that the Tuvalu deposit is emerging into "a very large high-grade alkaline gold deposit."
ROTH Capital Partners analyst Mike Niehuser earlier called Tuvatu "one of the highest-grade gold mines in the world."
The report added that Lion One is fully permitted for production as it adds incredibly high-grade ounces of gold at depth, especially in the "500 Zone."
"These results indicate that there is significant gold mineralization present in the walls of both drives and that the mineable widths of both drives are, therefore, considerably wider than expected based on drill results. Accordingly, management is investigating how far this high-grade gold mineralization extends into the walls," the report said.
According to the company's technical report and preliminary economic assessment of the project in 2018, The Tuvatu project's mineral resource comprises 1 million tonnes indicated at 8.50 g/t Au (274,600 ounce Au) and 1,325,000 tonnes inferred at 9.0 g/t Au (384,000 oz. Au) at a cut-off grade of 3.0 g/t Au.
ROTH Capital Partners analyst Mike Niehuser earlier called Tuvatu "one of the highest-grade gold mines in the world."
Aside from the Tuvali project, Lion One, which is fully permitted to build and operate, also sees exploration inside its tenements covering the entire Navilawa Caldera, an underexplored yet highly prospective 7-kilometer diameter alkaline gold system.
The company is equipped with an assay laboratory and eight of its own drill rigs, as well as funding for exploration and development, with a drilling rate of 2,500 to 3,000 meters per month.
Why Lion One?
Lion One noted that it has a clear path to significant production in its unique high-grade permitted gold project, which also coincides with the bull market for gold as the world's most stable monetary asset.
The company added that it is likely to overcome its takeover target as it completes its pending milestones, with the updated mineral resource estimate and completion of project financing expected earlier this 2023.
Technical Analyst Clive Maund said that Lion One appears to be completing a titled bucket base in July. Amid bright fundamentals, he noted that investors should wait and see for buying opportunities in the stock as it is approaching the zone of resistance.
Lion One focuses on advancing its 100%-owned Tuvatu Alkaline Gold Project as it envisions a low-cost, high-grade underground gold mining operation in Fiji, which is home to several world-class gold assets.
Technical Analyst Clive Maund said that Lion One appears to be completing a titled bucket base in July. Amid bright fundamentals, he noted that investors should wait and see for buying opportunities in the stock as it is approaching the zone of resistance.
"Holders should stay long, but it is thought best not to make new purchases here and instead wait to see if it reacts back some on declining volume in the near future, which may throw up another good entry point," he said in the newsletter.
Maund noted Lion One's plans to operate the processing plant at an initial production capacity of 300 tonnes per day (tpd), as it said that a large portion of the site infrastructure is already complete. It will scale up capacity to 500 tpd in mid-2025 after the first 18 months of operations.
Why Gold?
Maund noted that gold, silver, and precious metals staged a major breakout in July following the onset of a major devaluation of the dollar due to an apparent loss of reserve currency status. Jay Taylor of Taylor Hard Money Advisors Inc. said in its July 2023 Gold report that the current momentum for gold might lead to a trade of US$2,100 per oz.
"And once enough momentum factors indicate positive for any market trend, as they do for gold, it's time to actually look at price chart technicals. Price is up-ticking this month off of that three-point line. Obviously, the price level that will (maybe) wake up price chart aficionados is a trade to US$2100, which will take out the trio of intramonth peaks going back three years. Momentum says to expect it," the THMA report said.
Jay Taylor of Taylor Hard Money Advisors Inc. said in its July 2023 Gold report that the current momentum for gold might lead to a trade of US$2,100 per oz.
Gold closed at US$1,912.25 per oz, increasing by 5.4%, for the first half of the year and is poised to outperform all major assets apart from developed market stocks, according to a report by Gold Hub.
"Gold not only contributed positive returns to investor portfolios, but it also helped dampen volatility throughout the first half of the year, especially during the mini-banking crisis in March," the report said, referring to the bank runs of Silicon Valley Bank, Signature Bank, and First Republic Bank.
This exemplary performance was due to a relatively stable U.S. dollar and interest rates, event risk hedging, and a continued central bank demand for gold.
A potential upside for gold is expected in 2023, given its robust performance, but risks persist, according to the report.
Four key drivers that will determine its performance are economic expansion, risk, opportunity costs, and momentum.
"However, given the inherent uncertainty in predicting the global macroeconomic outcome, we believe that gold's positive asymmetrical performance can be a valuable component to investors' asset allocation toolkit," the Gold Hub report stated.
Streetwise Ownership Overview*
Lion One Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX; LLO:ASX)
Ownership and Share Structure
Lion One has a market capitalization of CA$150 million, with 173.77 million outstanding shares.
According to Reuters, 13.06% of Lion One is held by management and insiders. CEO and Chairman of the Board Walter Berukoff is the largest shareholder with 10.13%, with 20.90 million shares.
2.76% is with institutional investors. Franklin Advisors Inc. has 1.57%, with 3.24 million shares. Aegis Financial Corp. has 0.61%, with 1.25 million. Gabelli Funds LLC has 0.31%, with 0.63 million, and U.S. Global Investors Inc. has 0.24%, with 0.50 million.
The rest is in retail.
The company has a monthly burn rate of CA$4 million, well under its current CA$31 million cash in the bank.
Sign up for our FREE newsletter
Important Disclosures:
- Lion One Metals Ltd. is a billboard sponsor of Streetwise Reports.
- Nika Catalado wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
- The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
For additional disclosures, please click here.
