Newly Minted Gold Producer Has More High-Grade Results

Lion One Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX; LLO:ASX) has announced new high-grade gold drilling results from continued infill and grade-control drilling at its 100%-owned Tuvatu Mine in Fiji, including 84.96 grams per tonne gold (g/t Au) over 1.2 meters from 4.5 meters depth.

The company is fresh off the milestone of pouring its first gold at the project on Fiji Day on Oct. 10, celebrating with hundreds of locals and company employees.

The new results, which include a total of 10 infill and 11 grade-control drill holes, were from holes sunk in the Zone 2 area of the project, focusing primarily on the Murau lode system.

Mining of the Murau system has started, the company said, and the grade-control drilling is meant to advance further mining in the area. Infill drilling is targeting the up-dip and down-dip extensions of the Murau lodes.

ROTH Capital Partners analyst Mike Niehuser has called Tuvatu "one of the highest-grade gold mines in the world." 

"These drill programs continue to yield positive results and to strengthen our understanding of the mineralization at Tuvatu," said Lion One Chairman and Chief Executive Officer Walter Berukoff. "We are pleased to present yet another batch of high-grade results from the Zone 2 area of Tuvatu, an area which will serve to feed our brand-new mill in the mid-to-near-term future."

The materials represented in the results are scheduled to be mined in the fourth quarter of 2023 and throughout 2024, the company said.

Other highlights from the release included:

• 20.69 g/t Au over 4.2 meters (including 40.22 g/t Au over 0.9 meters)
• 13.60 g/t Au over 5.1 meters (including 98.87 g/t Au over 0.3 meters)
• 13.22 g/t Au over 5.1 meters (including 50.54 g/t Au over 0.3 meters)
• 15.64 g/t Au over 3.9 meters (including 23.48 g/t Au over 1.2 meters)
• 38.26 g/t Au over 1.5 meters (including 41.99 g/t Au over 0.6 meters)
• 34.77 g/t Au over 0.9 meters (including 35.67 g/t Au over 0.3 meters)
• 31.25 g/t Au over 1.2 meters
• 15.12 g/t Au over 2.1 meters (including 22.42 g/t Au over 1.2 meters)
• 13.61 g/t Au over 2.1 meters (including 42.48 g/t Au over 0.6 meters)
• 11.19 g/t Au over 2.4 meters (including 30.75 g/t Au over 0.6 meters)
• 9.26 g/t Au over 2.7 meters (including 13.11 g/t Au over 0.9 meters)
• 82.33 g/t Au over 0.3 meters

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.

The Catalyst: Becoming a Producer

ROTH Capital Partners analyst Mike Niehuser has 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.

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

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

Fiji Day celebrates the country's independence 53 years ago.

"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 at the time.

"The future looks good for Tuvatu," Fiji's acting minister for mineral resources, Maciu Nalusima, said at the event. "The best is yet to come."

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.

Analyst: A 'Top Pick'

Lion One presents "a buying opportunity for investors to get exposure to one of our Top Picks among the precious metals explorers/developers," Eight Capital analyst Felix Shafigullin wrote in a note in May. "We view Lion One as undervalued relative to other gold developers under our coverage."

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

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 its continuity of 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.

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% or 20.9 million shares.

About 12% is with institutional investors, the company said. Franklin Gold & Precious Metals Fund has 11.6 million shares or 5.6%, Nebari Natural Resources/Nebari Gold Fund has 3.1 million shares or 1.51%, Aegis Financial Corp. has 1.2 million shares or 0.61%, EMA Garp Fund has 675,000 shares or 0.33%, and U.S. Global Investors Inc. has 500,000 shares or 0.24%.

The rest is in retail.

Lion One has a market capitalization of CA$177.44 million, with about 206 million outstanding shares. It trades in a 52-week range of CA$1.07 and CA$0.59.

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