Co. Pours First Gold at Fiji Project, Becomes Producer

Lion One Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX; LLO:ASX) announced that construction at its 100%-owned Tuvatu Mine in Fiji has been completed ahead of schedule and it has poured the first gold at the project.

Mill commissioning began last month, and the mill is expected to ramp up to 300 tonnes per day (TPD) by the end of October and expand to 500 TPD in mid-2024, the company said.

The gold pour was held on Fiji Day, October 10, with more than 900 people in attendance from local communities, businesses, the government, and the company. Fiji Day celebrates the country's independence 53 years ago.

"The first gold pour at Tuvatu is a landmark event in the history of our company," said Lion One Chairman and Chief Executive Officer Walter Berukoff, who witnessed the pour with Fiji's acting minister for mineral resources, Maciu Nalusima.

"We have successfully transitioned from explorer to producer and have delivered on our promise to build the South Pacific's newest gold mine in the heart of Fiji," Berukoff said.

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 future looks good for Tuvatu," Nalusima said. "The best is yet to come."

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

A September 2020 Preliminary Economic Assessment (PEA) outlined for Tuvatu an indicated resource of 1,007,000 tonnes grading 8.48 grams per tonne gold (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.

The Catalyst: A Top Pick Among Explorers/Developers

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

Eight Capital analyst Felix 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."

Results released from drilling at Tuvatu have included 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.

Two lodes, URW1a and URW1b, are currently being mined. The company said mineralization there is both higher in grade and more laterally extensive than anticipated.

A total of 83 grade-control drill holes have been sunk in zones 2 and 5. The primary target of results released last month was 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 has said.

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 Au or higher.

New Discovery Has 'Bonanza-Grade Gold'

The company said it 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.

"The discovery of Lumuni underscores the significant regional upside in the Navilawa caldera," Shafigullin wrote. "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."

What makes the Lumuni discovery outstanding is "the continuity of the high-grade material," 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."

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 7% is with institutional investors. Franklin Advisors Inc. has 5.6% with 11.58 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$191.28 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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