Lion One Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX; LLO:ASX) hit upon a bonanza-grade regional gold structure north of its Tuvatu gold project on Fiji, called Lumuni, reported Eight Capital analyst Felix Shafigullin in an Aug. 24 research note.
"The discovery of Lumuni underscores the significant regional upside in the Navilawa caldera," Shafigullin wrote.
Compelling Return
Upon this news, Eight Capital reiterated its CA$2.60 target price on the Canadian mining company, currently trading at about CA$0.93 per share, noted Shafigullin. The difference between these two prices implies a significant return for investors of 180%.
Lion One is a Buy.
About the Structure
Shafigullin described Lumuni. About 1 kilometer north of Tuvatu, the mineralized structure is thought to be along strike from the flagship project's mineralized lodes UR1, UR2, and UR3 in the Main zone.
Lumuni has an estimated true width of 0.6 meters (0.6m) and encompasses two parts, Shafigullin continued. One is a northern area striking north-south and steeply dipping to the west. The other is an eastern interval striking northwest-southeast and dipping to the southwest. Company management believes both portions belong to one continuous mineralized lode structure spanning 150m in length.
Lumuni remains open to the southeast.
How It Was Found
Shafigullin reported that Lion One discovered Lumuni via surface channel sampling on its land package in Fiji's Navilawa caldera. The gold grades the company encountered "compared favorably" to that of the Tuvatu Measured & Indicated resource of 8.78 grams per ton (8.78 g/t).
Some of the recent standout surface sampling results were:
- 66.83 g/t Au over 0.7m, from channel CH3851
- 48.45 g/t Au over 0.7m, including 92.55 g/t Au over 0.3m, from channel CH3849
On the CSAMT, or controlled-source audio-frequency magnetotellurics, geophysical survey done in 2019, Lumuni was shown to "overlie a sub-vertical resistivity gradient" and dip steeply, described Shafigullin. As such, Lion One's management believes the identified mineralization at Lumuni is associated with a deep-rooted mineralized structure like the one at Tuvatu.
Given the results of the sampling and the CSAMT survey, Lumuni is a likely drill target.
Potential Further Upside
Of Lion Brand's total land claims in the Navilawa caldera, Tuvatu comprises a mere 5%. Drilling to test previously identified targets such as the Banana Creek has been minimal. Thus, Shafigullin highlighted upside potential outside of Tuvatu is material.
"We currently model a regional upside of 500,000 ounces of gold, a conservative figure, in our view, given the abundance of underexplored regional targets in the Navilawa caldera," the analyst added.
Key Near-Term Events
Investors should watch for drill results from Lion One's regional drilling as well as its infill and stepout drilling at Tuvatu, Shafigullin noted. Additional upcoming stock catalysts are Tuvatu construction updates and an updated Tuvatu mineral resource estimate.
| Want to be the first to know about interesting Gold and Base Metals investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. | Subscribe |
Important Disclosures:
- Lion One Metals Ltd. is a billboard sponsor of Streetwise Reports.
- Doresa Banning 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.
Disclosures for Eight Capital, Lion One Metals Ltd., August 24, 2023
This research report (as defined in IIROC Rule 3400) is issued and approved for distribution in Canada by Eight Capital. Eight Capital accepts responsibility for the dissemination of this report. Non-client recipients of the research report should not rely solely on the investment recommendations contained herein and should consult their own professional advisors. Eight Capital will not treat any non-client receiving this report as its own. Institutional clients who require additional information on securities discussed in this report should contact a qualified sales person at Eight Capital. Eight Capital accepts no liability whatsoever for any loss arising from any use or reliance on this research report or the information contained herein. This research report is being provided only to institutional clients of Eight Capital and is intended for informational purposes only. This research report is not an offer to sell or the solicitation of an offer to buy any of the securities discussed herein. The information contained in this research report is prepared from publicly available information, internally developed data and other sources believed to be reliable, but has not been independently verified by Eight Capital. Eight Capital makes no representations or warranties with respect to the accuracy, correctness or completeness of such information and they should not be relied upon as such.
All estimates, opinions and recommendations expressed herein constitute judgments as of the date of this research report and are subject to change without notice. Eight Capital does not accept any obligation to update, modify or amend this research report or to otherwise notify a recipient of this research report in the event that any estimates, opinions and recommendations contained herein change or subsequently become inaccurate or if this research report is subsequently withdrawn. Past performance is not a guarantee of future results, and no representation or warranty, expressed or implied, is made regarding future performance of any security mentioned in this research report. The price of the securities mentioned in this research report and the income they generate may fluctuate and/or be adversely affected by market factors or exchange rates, and investors may realize losses on investments in such securities, including the loss of investment principal. Nothing in this research report constitutes legal, accounting or tax advice. Investors should consult with his or her independent legal or tax adviser in this regard. Neither Eight Capital, nor our affiliate VIII Capital Corp. is affiliated in any way with Eight Capital Management LLC, an Indiafocused investment firm.
US Residents Eight Capital is not a U.S. registered Broker Dealer and therefor is not governed by U.S. laws, rules or regulations applicable to U.S. broker-dealers. Consequently, the persons responsible for the content of this publication are not licensed in the U.S. as research analysts in accordance with applicable rules promulgated by the U.S. self-regulatory organizations. Any US Institutional investor wishing to effect trades in any securities referred to herein should contact VIII Capital Corp., a U.S. Broker-dealer affiliated to Eight Capital.
Registration of Non-US Analyst The authoring non-US research analyst employed by Eight Capital who contributes to this report is not registered/qualified as a research analyst with FINRA; and the authoring non-US analyst is not subject to the requirements of FINRA rule 2241 regarding restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
U.K. Residents: The authoring analyst(s) who prepared this research report is employed by Eight Capital, a Canadian regulated entity. The report has been prepared and approved in accordance with regulatory standards in Canada and was not viewed for the purposes of the UK’s Financial Services and Markets Act 2000. This report is not intended for use by and should not be directed to individual investors.
