Lion One Metals Ltd (LOMLF)

[miningstock1]

interesting article on lion one

http://southpacificmetals.com/2015/11/lion-one-metals-primed-to-breakout/

Lion One Metals primed to breakout

It’s been a long time since we have looked at any junior mining stocks – there hasn’t been much point with the sector trending ever lower. Now, however, with mining stocks being extraordinarily cheap, it is time to start turning up the better ones. Lion One is thought to be a good investment, since it is now comparatively cheap compared to some years back, has a bullish looking chart, and a positive fundamental story that is easy to understand. It is unusual too in that it is located on Fiji, which should make shareholders meetings a lot more fun than usual.

On its 6-year chart, we can see that after a big rise in 2010, Lion One has been stuck in a persistent downtrend until the Spring of this year, when a sharp rally broke the price out of it, and it is now evident that this rally formed the Right side of a Head-and-Shoulders bottom, with the price having dipped back again in the recent past to mark out the Right Shoulder of the pattern. It is suspected that this Right Shoulder may be almost complete, in which case the stock should advance from here. In adverse market conditions the price may drop back to the support at the Right Shoulder low again, but this is looking less likely now.

The 3-year chart enables us to examine the Head-and-Shoulders bottom in some more detail. On this chart we see that the duration of the pattern has allowed time for the 200-day moving average to turn up, which is a positive development. The current bunching of the price and moving averages, which are now bullishly aligned, indicates that conditions are favorable for an uptrend to begin, which fits with our increasingly positive outlook for the sector. On this 3-year chart we can see several other positive factors. One is the sharp advance in the Spring which resulted in a relative breakout against PM sector stock indices and basket ETFs – we can see how it broke out against GDX at the top of the chart. This advance occurred on good volume, which is another positive sign. Finally the stock is not overbought At all on its MACD indicator, and so has plenty of upside potential.

The 6-month chart is not of much use technically, but it does enable us to see recent action in more detail. On it we can see that after rising sharply in October out of what is believed to be the Right Shoulder low, the price has reacted back to a support level where it is considered likely that it will turn up again and then advance initially to the resistance level in the C$0.60 area shown on the 3-year chart, before going on to break above this level later.

Senior Geologist Nigel Maund, who just happens to be my brother, took a quick look at the company and made the following observations…
“I have had a brief look at this and it looks very good. Here are the key reasons:
1.5 years to production commencing so will benefit from an upturn in the US$ gold price;
CAPEX is modest at US$ 48 million and therefore no great financial burden.
Project CAPEX Payback Period is rapid at 1.5 years.
After Tax IRR is very good at 52% at current gold prices.
Cash operating costs are in the lower quartile of gold mines at US$ 567 / ounce.
All In Sustaining Costs for gold are good at US$ 779 / ounce.
The underground mining grade is good at 11.3 g/t Au during the first 7 years.
The mine life is short at 7 years – however, there is considerable exploration upside potential around the mine;
Management has a good track record and looks competent.”

So – to conclude, Lion One looks like a solid investment in the junior mining space, that should at least perform well, and possibly perform very well, depending on what happens to metals prices going forward. Downside looks limited here, and there is a good prospect that a major new bullmarket phase will start soon.
It’s not all work and no play at Lion One of course, especially as it is situated on Fiji. In this next photo we see a couple of employees relaxing after a hard day’s work at the mine…
Lion One trades in very light volumes on the US OTC market, so it is considered to be much better to buy it on the Canadian market if interested.
Lion One Metals website
Lion One Metals Ltd, LIO.V, LOMLF on OTC, trading at C$0.335, $0.26 at 2.56 pm EST on 25th November 15.



Read more at http://www.stockhouse.com/companies/bullboard/bullboard/v.lio/lion-one-metals-limited#xqPRhYQFJzdzoYek.99