Grade-Control Drilling Finds More High-Grade Gold in Fiji

Lion One Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX; LLO:ASX) has announced new high-grade results from continuing grade-control drilling at its 100%-owned Tuvatu alkaline gold project in Fiji, included 19.78 grams per tonne gold (g/t Au) over 6 meters.

The assays were completed in the project's Zone 2 area, focusing on the URW1, URA1, and Murau lode systems, the company said.

Highlights included (with a 3 g/t Au cutoff):

• 19.78 g/t Au over 6 meters (including 31.52 g/t Au over 3 meters) (from 114 meters depth)
• 14.83 g/t Au over 6 meters (including 25.16 g/t Au over 2.4 meters) (from 90.9 meters depth)
• 18.08 g/t Au over 3.6 meters (including 32.74 g/t Au over 1.5 meters) (from 90 meters depth)
• 25.25 g/t Au over 2.4 m (including 149.63 g/t Au over 0.3 m) (TGC-0078, from 95.2 meters depth)
• 45.89 g/t Au over 0.9 meters (from 23.4 meters depth)
• 8 g/t Au over 4.8 meters (including 21.05 g/t Au over 0.9 meters) (from 47.4 meters depth)
• 8.52 g/t Au over 3.3 meters (including 11.16 g/t Au over 1.8 meters) (from 13.8 meters depth)
• 17.73 g/t Au over 1.5 meters (including 20.98 g/t Au over 0.9 meters) (from 56.4 meters depth)
• 14.13 g/t Au over 1.8 meters (including 18.64 g/t Au over 1.2 meters) (from 67.5 meters depth)

Earlier results released from the drilling include a 6.6-meter interval of 83.47 g/t Au in the Main Zone of the project. Results also included 1,839.55 g/t, 934.91 g/t, and 300.47 g/t Au from Zone 5 of the deposit.

Drilling results are categorized by the average amount of gold in the ore or its ore grade, Investopedia explained. Higher-quality mines have higher-grade ore, but mining ore with lower gold density can still be profitable depending on how it is extracted. Higher quality mines have grades of 8 g/t to 10 g/t or higher.

The Catalyst: 83 Drill Holes Sunk

A total of 83 grade-control drill holes have been sunk in zones 2 and 5 at Tuvatu, the company said, including the 24 released on Thursday.

The primary target of the latest results is the URW1 lode system, which "consists predominantly of narrow, high-grade to locally bonanza-grade vein arrays and vein swarms that strike approximately north-south and dip subvertically to steeply east," the company said in a release.

 Eight Capital analyst Felix Shafigullin rated the stock a Buy with a CA$2.60 per share target price.

Lodes URW1a and URW1 b are currently being mined. The company said mineralization there is both higher in grade and more laterally extensive than anticipated.

The URW1 lode system has a current strike length of about 300 meters from north to south and about 300 meters vertically.

"Results from the grade control drill program will be used to help optimize mine development and mineral extraction in these areas," the company said.

The Lumuni Occurrence

The company has also discovered a new mineralized structure with "bonanza-grade gold" 1 kilometer north of Tuvatu.

The strike length of the feature, named the Lumuni occurrence, was measured on the surface as 150 meters, and samples included 66.83 g/t Au over 0.7 meters; 48.45 g/t Au over 0.7 meters, including 92.55 g/t Au over 0.3 meters; and 15.18 g/t Au over 1.1 meters, including 31.25 g/t Au over 0.3 meters.

ROTH Capital Partners analyst Mike Niehuser called Tuvatu "one of the highest-grade gold mines in the world." ROTH has a Buy rating and a CA$2.50 per share target price on the stock.

"The discovery of Lumuni underscores the significant regional upside in the Navilawa caldera," Eight Capital analyst Felix Shafigullin wrote in an updated research note. "The Tuvatu resource area represents less than 5% of LIO's land claims in the caldera, and limited drilling has been done to test the previously discovered regional targets, such as Banana Creek that contains outcropping lodes similar to those seen at Tuvatu."

Shafigullin rated the stock a Buy with a CA$2.60 per share target price.

What makes the Lumuni discovery outstanding is "the continuity of the high-grade material," Lion One Chairman and Chief Executive Officer Walter Berukoff said.

"It is not a single bonanza-grade sample, but rather a traceable lode of high- to very high-grade material that can be followed along at surface," Berukoff said. "The fact that these high-grade samples coincide with a steeply dipping resistivity low is even more compelling, as it provides us with immediate drill targets to pursue."

'Undervalued' Relative to Other Gold Developers, Analyst Says

Tuvatu is just miles away from Vatukoula, which means "gold rock" in Fijian, Fiji's highest-producing gold mine.

A September 2020 Preliminary Economic Assessment (PEA) outlined for Tuvatu 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.

ROTH Capital Partners analyst Mike Niehuser called Tuvatu "one of the highest-grade gold mines in the world." ROTH has a Buy rating and a CA$2.50 per share target price on the stock.

Shafigullin with Eight Capital wrote that Lion One presented "a buying opportunity for investors to get exposure to one of our Top Picks among the precious metals explorers/developers."

"We view Lion One as undervalued relative to other gold developers under our coverage," he wrote in a May update note.

Ownership and Share Structure

According to Reuters, about 13% of Lion One is held by management and insiders. CEO Berukoff is the largest shareholder with 10.13%, with 20.90 million shares.

Nearly 3% 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 shares, Gabelli Funds LLC has 0.31% with 0.63 million shares, and U.S. Global Investors Inc. has 0.24% with 0.50 million shares.

The rest is in retail.

Lion One has a market capitalization of CA$179.43 million, with 206.25 million outstanding shares. It trades in a 52-week range of CA$1.07 and CA$0.59.

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