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New, environmentally friendly technique to mine gold:
http://csironewsblog.com/2015/06/16/eureka-a-solid-gold-solution-to-make-archimedes-proud/
BEST BUY IN THIS KIND OF A MARKET-TODAY !!!
Today at 8:16 AM HRA Journal Issue 234 June 9, 2015 Lion One Metals (LIO-V; $0.475) released the results of its PEA on the Tuvatu project in Fiji with attendees of the Metals Investor Forum getting the first look. The study definitely lived up to my expectations and then some. The highlight numbers from the study appear in the table on the right and they are indeed impressive. After tax, Tuvatu reports a US$86.5 million NPV and IRR of 52% from the production of 353,000 ounces over its 7.4 year project life which includes 1.3 years of development and construction, using a $1200/oz gold price and 5% discount rate. The payback period is a very impressive 1.5 years on an after tax basis. Cash cost and all-in sustaining costs of $567 and $779 respectively are quite low, and the estimated pre-production capex of US$48.6 million is really low, well within the reach of a junior with some debt financing in the mix.
The key to this PEA is grade. Lion One management developed a mine plan that focuses on the highest grade areas which results in an average diluted head grade of 11.3 g/t gold. Many of the best ore shoots are mined early and LIO expects to produce over 262k ounces in the first three full years of production. The estimated production profile is shown on the bar chart below. Lion One made many references to the exploration potential of Tuvatu in the PEA release and with good reason. It’s important to understand that management made a conscious decision to pursue Tuvatu in the time honored way that has been largely absent in the sector in the “bulk tonnage” and “post 43-101” era. LIO is taking the “old school” approach to the development and mining of a high grade underground resource, following a well-trod path many successful mines before Tuvatu have utilized. The idea is to get Tuvatu into production as expeditiously and cost effectively as possible then use cash flows to continue development and exploration drilling to extend and expand the resource. Traders are used to seeing companies spend a lot of money to maximize the size of a resource then try to maximize the production scale. That makes sense in a bull market when it’s easy to line up money for capital intensive projects but that is not the market we are in. It also makes sense (sometimes) if you’re dealing with a low grade disseminated resource where its crucial to capture as much economy of scale as possible in order to minimize your cut off grade. As my late brother David used to say “You can’t stope an open pit”. What he meant by that is that large bulk tonnage operations really depend on scale as much or more than grade. They don’t lend themselves to selective mining. A high grade underground mine on the other hand is designed to be selective. Most operations will have multiple stopes (working faces) delivering ore to the mill and altering the amount mined in different areas allows the mine manager to vary the grade. A key attribute of projects that recently succeeded in getting financed to development is capital efficiency and scalability. As LIO develops new ramps and levels it will put in drill stations that will be able to upgrade Inferred resources and test along strike and especially to depth more efficiently. There are a number of high grade intercepts on main veins up to 100 metres below the resource. Several of the main lodes have been intermittently traced with surface trenches for a kilometre or more in both strike directions away from the roughly 500 metre section that represents most of the Indicated and Inferred tonnage. If management can keep upgrading ounces and adding accessible high grade shoots we will see it in the mine plan as production proceeds. The development and mining plan has the costs for ongoing exploration drilling factored in already. Key goals will be to increase production in years 4 to 7 then adding years to the production life. Adding even 10,000 ounces a year in years four to seven on the par chart on the previous page would have a big impact on NPV.
Given how much untested target there is I think the odds they add that much or more and also extend the mine life are good. Mining will be carried out with shrinkage stoping that should mean less dilution. It’s an exacting way to mine but there are a lot of miners in the area with experience with this mining method from their time working at Vatukoula. There is also room to increase production with better gold recoveries. Recent testing has reported recoveries in the 90-95% range. The PEA uses early recovery averages of 86.3%. Adding 4-5% to the recoveries would make a big difference in returns. Management is talking to finance groups. The successful track record of management will help here, as will the fact that management owns a third of the stock. There are a number of other large shareholders who seem to be willing to wait to see Tuvatu get built.
I’ve been impressed at how well LIO has held its price and the relative lack of stock offered. Much of the float seems well owned and there is no cheap stock. Add management’s ability to promote and I think LIO will continue to trade higher. The potential for a short timeline to production and high IRR should attract a relatively high value per ounce. Companies that line up financing usually get an immediate re-rating. Lion One is a buy at these levels based on this strong economic study and potential for near term development
Comments on CEO.CA
Shares in Lion One, which have doubled in the past month, added a modest 4.2% on about 168,000 shares traded Monday. James Kwantes of the Resource Opportunities newsletter expected a stronger stock market result, commenting, “In part will chalk it up to “mine will end up looking significantly different than in study” complex.”
Geologist Rob McLeod was one of two Qualified Persons responsible for overseeing the PEA. “Wally Berukoff will make the project happen; as management, he’s been off the radar from investors for awhile, but his track record is nothing but wins and making $ in mining $LIO,” Mr. McLeod said.
Geologist Cooper Quinn has worked with Mr. McLeod and Mr. Berukoff and is taking questions in CEO.CA Chat about Lion One’s Tuvatu project. Regarding Lion One’s share price movement today, Mr. Quinn commented, “a bit flat in the markets, but thats ok. we’re building a long term story, not a one day wonder.”
http://ceo.ca/2015/06/01/lion-ones-berukoff-wants-to-build-and-grow-a-gold-mine-in-fiji/
Excellent new article by Coffin-June 2
http://ceo.ca/2015/06/02/pea-puts-lio-on-the-fast-track-to-production/
Lion One will mine higher grade stopes. Management plans drilling to replace ounces produced, expand the overall resource and move ounces into higher confidence categories on an ongoing basis. This is classic underground mining technique.
Tuvatu’s location and local skilled mining work force translate to low infrastructure costs.
The PEA is THE LAST STUDY EXPECTED PRIOR TO DEVELOPMENT. Management will now focus on putting a finance package together and constructing the Tuvatu mine.
Management ability to transition from exploration to production is a “make or break” characteristic for mine developers. Lion One’s leadership has been directly involved with numerous successful mine start-ups.
Sometimes simple is best. Lion One is focused on the high grade Tuvatu gold project in Fiji. Tuvatu contains a 760,000 ounce gold resource open to expansion in most directions plus many other lightly drilled veins and prospects that can add ounces and potential mine life. Lion One management had a direct hand in the start of a score of mines on three continents over the last thirty years. Fast tracking Tuvatu to production before growing the resources further looks like the best way to maximize shareholder value and management has committed to doing just that.
I’ve followed Lion One in the HRA Advisory publications for some time now. I moved LIO up to Strong Buy in the HRA Special Delivery alert service at 20 cents back in April when the company received its final required permit to mine at Tuvatu. It was added to the broader HRA Journal list early in May.
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The initial market reaction to the permit approval was muted but the stock strengthened as traders recognized the implications of that permitting success. Miners can spend years going through the permitting process after proving up a resource. With Tuvatu, the process is getting turned on its head. Lion One received all its permits before releasing the PEA. That tells you a lot about the high regard Fiji’s government has for Lion One management and the effort LIO put into relations with local stakeholders since day one.
EconomicsThe table on the right lists the main findings of the Tuvatu PEA. It’s a very impressive set of numbers. The key to the mining plan laid out in the PEA is grade. Lion One will focus on the higher grade areas of the currently defined resource first. This “front end loads” the production profile, allowing for higher revenues in the first years of production and rapid payback of capital.
This is the “old school” way of growing a mining company. For centuries, miners would prove up a few years’ worth of production, get a mine started and deal with growing the resource and extending the mine life later. Scores of mines world wide – particularly high grade underground operations – that have operated for decades began with only a few years of “official” resources. The industry moved away from this model when it focused on low grade bulk tonnage operation that require billions in start-up capital. The market we’re in makes that sort of operation impossible for any but the world’s largest mining houses to even consider financing.
HRA has always maintained that miners would return to the high grade model. Big open pits got the glory for a while but many of the world’s most successful and profitable operations are actually high grade underground mines. I’ve seen the sector moving back to our way of thinking as underground operations under development accrue higher and higher market values. I expect Lion One to continue the trend.
The Middle of Nowhere? Not Really.
MapFiji may sound like the last place you would look for a gold mine, or any other type of mine for that matter. It’s not though. Mining is actually quite important to the Fijian economy and the locals are supportive of well-planned operations that are sensitive to the environment and have small footprints, as underground mines do. Fiji is part of the Pacific “Rim of Fire” that hosts some of the world’s largest mineral deposits. The island of Viti Levu that Tuvatu is located on lies on a large NE trending regional structure that hosts a number of gold and copper-gold deposits. The most important deposit in the region is the Vatakoula gold mine, located 75 kilometres NE of Tuvatu and occupying the same regional trend. Like Tuvatu, Vatakoula is a high grade vein type deposit. It has operated intermittently since the 1930s and has cumulative production of over 7 million ounces of gold with over 4 million ounces remaining in reserves.
Vatakoula, like Tuvatu, occupies the area of an extinct volcano. The past volcanic activity was probably both the heat engine that drove mineralized fluids into the area and the source of the “ground preparation” in the form of fractures created during the volcanic caldera’s growth that created easy pathways to travel for gold laden fluids.
Vatakoula is still operating though it’s getting to the end of its mine life. The average grades being mined there now are quite a bit lower than the mine plan grades for Tuvatu and most of the higher grade structures have shallow-20-30 degree dips which is tricky and inefficient for underground mining. By contrast, Tuvatu’s gold bearing structures are steeply dipping which allows the miners to use gravity to do some of the work and decreases the potential dilution.
The long running Vatakoula operation will, inadvertently, be another big cost saver for Tuvatu. Vatakoula provides the region with a mining culture and has trained many skilled local miners. These miners are qualified and trained in excactly the sort of mining conditions using the same techniques that will be applied at Tuvatu. It’s no secret that Vatakoula is nearing the end of its life. Miners will be happy to find a new mine to work at and Lion One foresees no problems staffing Tuvatu with highly qualified underground and mill personnel.
Tuvatu is only 25 kilometres from the regional center of Nadi and 15 kilometres from an international airport. A partially sealed road allows you to drive right up to the portal entrance and power lines and water cross the site. Fiji’s power grid is all powered by diesel generators so Lion On plans to install its own to ensure a consistent power supply. All this existing infrastructure is a big advantage for Tuvatu and one reason LIO has been able to keep the capital cost of the project manageable.
Tuvatu – Lots of Room to Grow.
I mentioned above how Lion One is following the tried and true method of putting an underground operation into production then continuing to upgrade and expand resources. Narrow vein deposits take a lot of drilling to prove up and it’s often more efficient to do that drilling from within the underground workings. The drill holes are shorter and therefore cheaper and underground drills, unlike surface drills, can drill both “up” and “down”. That means miners can effectively drill fans of holes at different angles from a single drill station to prove up additional tonnage or increase the level of confidence on existing zones.
That’s great in theory but only works in practice if the project has targets to drill. Luckily, that’s not a problem at Tuvatu.
LIO PotentialThere will be plenty to keep the drillers busy for a long time to come. The first graphic below is a long section along the trace of the current exploration decline. The colors display gold grade times width in different parts of the section based on drill results to date. As you can see from the shading the gold zones are still open to expansion in most directions.
There are several historic drill intercepts of over an ounce per ton gold across two to four metres that are up to 100 metres below the current resource. We also know from Vatakoula that this type of deposit can carry grades for several hundred metres of dip. There is potential immediately surrounding the existing resource that will be much easier to test once new underground development provides well located drill stations.
Stepping back a bit we can see there is even more potential in the immediate vicinity of the current resource. The lower graphic is a Google Earth image that shows the outline of the mining lease. The red lines are known veins that have been traced on surface. The existing resource is within the cluster of veins hear the NE (upper right) corner of the licence.
lio map 2As you can see from the graphic there are scores of veins that are still largely undrilled. Most have been traced on surface by mapping or trenching. This includes the main vein sets in the resource. Several of them have been traced with outcrop mapping and trenching for a kilometre or more in both strike directions from the current resource. There are a number of other veins that have reported 20 g/t plus grab or channel samples from vein segments traced for 2-300 metres. Remember that all the veins shown in the map above are within the existing mining licence which means they are already permitted. Any vein within the licence that is proved up can be added to the mine plan when it makes the most sense to do so. I don’t know if Tuvatu will ever approach the 11 million ounces in resources and cumulative production that Vatakoula boasts but I am comfortable it will be a multiple of the current 0.75 million ounce resource.
One other important point to note concerns metallurgy. The metallurgical recoveries assumed in the financial model is 86%. This is based on the average gold recoveries from a number of early metallurgical studies. More recently, ongoing optimization programs have been yielding recoveries of up to 95% mainly through reprocessing and finer grinding which the mill will have the capacity to do. The mining and milling costs per tonne don’t change so if you can increase recoveries the difference goes right to the bottom line. If LIO can succeed in delivering 90% plus recoveries at a commercial scale that will have an outsized impact on both NPV and cash cost.
Management: Lots of Successes and Lots of “Skin in the Game”
Everyone knows how important both management and share structure are to the success of a speculative company. In the case of Lion One, management and structure are excellent and intertwined. Walter “Wally” Berukoff, Lion One’s founder, chairman and largest shareholder, is a serial entrepreneur who has had a lot of success in several fields, not the least of which is mining. Those of you that have followed the mining sector for a while may recognize the names Northern Orion, Miramar Mining and La Mancha Resources. Berukoff founded all three of these companies that, collectively, were responsible for the development to production of over a dozen mines on two continents. More to the point, all three of these companies were ultimately taken over by larger entities, providing an exit opportunity for all shareholders. The collective value of the three M&A transactions these companies were involved with is about $3 billion.
Getting a takeover offer for a company that monetizes its value for all shareholders is the Holy Grail for a promoter in the resource space, or any other space for that matter. Only a handful of promoters manage to accomplish this feat even once and those that do can write their own ticket on their next deal. Berukoff has done it three times.
You can call in a lot of markers when you have that sort of track record. The way that Lion One has been financed to date is a strong indication of the level of credibility that management has. All of the monies raised by Lion One were at $1.00 and $1.55 and $4.5 million of that money is still on hand. The shareholders of the companies that were taken over to create the current Lion One (X-Tal and Avocet) endured large reverse splits to make the deals happen so their cost base is also high. There really isn’t any “cheap stock” in this deal.
Berukoff is Lion One’s biggest shareholder, holding one third of the stock. That stock wasn’t cheap either and if it’s not already obvious, Berukoff is not the type to sell off shareholdings piecemeal. He likes to build companies and sell them. There are a number of other large shareholders who seem content to hold the stock and give management a change to build Tuvatu. There are some traders and weak hands in LIO as there are in any deal but Lion One has a float and share structure most resource juniors can only dream of after four years of bear market.
Berukoff believed in Tuvatu and was clearly frustrated waiting to have some concrete numbers he could promote. Now that the PEA is out, Berukoff and Mann have real numbers they can go to their rolodex with and it’s a very big rolodex. Expect to see a lot more eyeballs on this story going forward.
Bottom Line Time:
The past three years have been brutal for the mining sector. Many companies have been forced to rethink or abandon their business models. What worked five years ago doesn’t work now. Companies followed by HRA that have had recent success all realize that and none more so than Lion One.
Past success gives Lion One management a lot of willing listeners. PEA numbers that tick all the boxes with 50%+ IRR and mine life to payback period ratio above four means Tuvatu will be on the short list for many finance groups. Add to that a very manageable capex budget and I think Lion One will be fielding a lot of offers to finance Tuvatu to production. One of the biggest pitfalls for development level companies in year four of a bear market is huge equity dilution inherent in a mine financing package. Indeed, it’s been a deal killer lately for many, many companies. Relative to most deals out there the minimum equity dilution required for a mine finance package is low for Lion One and management has only begun to market the project. It all adds up to two words that are key drivers for successful mine developers right now: “financeable” and “practical”. Projects with those two attributes go to the top of the list for funding groups. The fact Tuvatu already has all permits in place and could move to construction almost immediately is a major bonus. As the market understands just how near term an opportunity this is Lion One’s market value should continue to climb. This one has a short fuse.
Something I'm confused about and I emailed Joe Gray and asked him to call me about it. Gold production of 352,000 both indicated and inferred out of a resource of 767,000 oz's indicated and inferred. I realize they're going after higher grade first, but what happens with the other 400,000 ounces? Nothing?
actually... we are still almost higher then what we were before the news! close at 0,48$ Friday? lol!
I guess ctoivo and you were right not to expect too much from the PEA... I think if we can settle down and find our support... this will be the start of another leg up...
I expect news to come out sooner then later on the mine development... I hope that when people sees that this is moving forward they won't be sitting on the fence forever!
I am sure that Walter will make a mine out of this play... people will realize it eventually and have to pay more... CIBC and anonymous still playing a game here... TD seller seems out... was probably a retailer that cashed his quick profit...not bad for a 3 weeks paycheck...
I am here for much money... so I will hold on... !
They have to increase the SP to avoid dilution... and I am sure management won't want to dilute... so this play has one way to go!
I hope we won't see 0,45$ tomorrow... and we'll see some volume on the buy side!
This happens all the time...
Buy on rumor, sell on news.
The news is really good, the PEA does not over reach.
I'd rather a steady creep up than an avalanche up, it's more likely to stay there.
Patience is needed. At least they are on the map now.
It's now up to LionOne's Investor Relations Department to
do their job and get the word out and promote, promote, promote!!!
Hard Rock--Eric Coffin update
I spoke with IR this morning. they said lots of interest coming in from all over. Mann's presentation at Metals Forum was mostly about the exceptional exploration potential.
This trading seems to be a replay of the time period after the permit news release. I think some people are selling part of their positions since they may have had good gains in the last 6 weeks, but the shares are moving to stronger hands. The share price may well follow the earlier pattern and move up from this base.
31 MAY 2015 A COMPELLING PEA FROM LION ONE Lion One Metals
(LIO-V, LOMLF-Qx, LLO-ASX; closed off 0.02 on 48k shares at $0.48 on V) gave attendees at yesterday’s Metals Investor Forum a bit of a bonus during their presentation, a first look at the PEA numbers for the Tuvatu project.
The highlight numbers from the study appear in the table below and they are indeed impressive. After tax, Tuvatu reports a US$86.5 million NPV and IRR of 52% from the production of 353,000 ounces over its 7.4 year project life which includes 1.3 years of development and construction, using a $1200/oz gold price and 5% discount rate. The payback period is a very impressive 1.5 years on an after tax basis.
Cash cost and all-in sustaining costs of $567 and $779 respectively are quite low, as is the estimated pre-production capex of US$48.6 million. The key to this PEA is grade. Lion One management developed a mine plan that focuses on the highest grade areas which results in an average diluted head grade of 11.3 g/t gold. Many of the best ore shoots are mined early and LIO expects to produce over 262k ounces in the first three full years of production.
The MIF presentation was handled by Stephen Mann, Lion One’s Managing Director. He spent a large portion of the presentation talking about exploration potential, both immediately surrounding the planned mining areas as well as the broader potential of the mining lease and surrounding exploration licence. That may seem odd in a presentation being used to announce PEA figures but it made a lot of sense. LIO is taking a classic old school approach to the development and mining of a high grade underground resource, following a well-trod path many successful mines before Tuvatu have utilized. The idea is to get Tuvatu into production as expeditiously and cost effectively as possible then use cash flows to continue development and exploration drilling to extend and expand the resource. Traders are used to seeing companies spend a lot of money to maximize the size of a resource then try to maximize the production scale. That makes sense in a bull market when it’s easy to line up money for capital intensive projects but that is not the market we are in.
A key attribute of projects that have recently succeeded in HRA Special Delivery #586 31 May, 2015 2 getting financed to development is capital efficiency and scalability. As LIO develops new ramps and levels it will put in drill stations that will be able to upgrade Inferred resources and test along strike and especially to depth more efficiently. There are a number of high grade intercepts on main veins up to 100 metres below the resource. Several of the main lodes have been intermittently traced with surface trenches for a kilometre or more in both strike directions away from the roughly 500 metre section that represents most of the Indicated and Inferred tonnage. If management can keep upgrading ounces and adding accessible high grade shoots we should see it in the mine plan as production proceeds.
Key goals will be to increase production in years 4 to 7 then adding years to the production life. Given how much untested target there is I think the odds they can accomplish this are good.
Mining will be carried out with shrinkage stoping that should mean less dilution. It’s an exacting way to mine but there are a lot of miners in the area with experience with this mining method from their time working at Vatukoula. There is also room to increase production with better gold recoveries. Recent testing has reported recoveries in the 90-95% range. The PEA uses early recovery averages of 86.3%. Adding 4-5% to the recoveries would make a big difference in returns.
Management is talking to finance groups. The successful track record of management will help here, as will the fact that management owns a third of the stock. There are a number of other large shareholders who seem to be willing to wait to see Tuvatu get built. I’ve been impressed at how well LIO has held its price. Much of the float seems well owned and there is no cheap stock. Add management’s ability to promote and I think LIO will continue to trade higher.
The potential for a short timeline to production and high IRR should attract a relatively high value per ounce. Lion One is a buy at these levels based on this strong economic study and potential for near term development.
Regards for Now: Eric Coffin HRA - Special Delivery is an independent publication produced and distributed by Stockwork Consulting Ltd, which is committed to providing timely and factual analysis of junior mining and other venture capital companies. Companies are chosen on the basis of a speculative potential for significant upside gains resulting from asset-base expansion. . This document may be quoted, in context, provided proper credit is given.
Well well... not what was anticipated!
I am freaking surprise that we aren't moving up more then that...
Yep it's a small operation, but numbers are good and are really really conservative!
Well... time will tell... but I was expecting a better morning! I was hoping for at least 0,70$...
Good luck and hold on folks!
Very good numbers
The numbers were good but it was a conservative PEA. They have another 400,000 inferred ounces they didn't emphasize, and I wish they would have touted the exploration potential more. This will be an explore by mining type of operation. Anyone that has studied this mine will see the great liklihood of a much longer mine life and a much greater amount of gold that will be mined. (More longevity will lower the AISC costs too).
The ability to produce 91,000 ounces in year two is very impressive as is the short pay back period. Once they start mining, exploring, and turning inferred into indicated, they likely will sustain a high rate of production for many years past the mine life stated in the report.
I was surprised they put in only $4.89 per ounce for exploration when it should be much more, particularly in the next couple of years. (Its time to drill down to and past that 4 meters of 8 ounce per ton gold.)
This PEA doesn't give investors a picture of the true potential of LION. Management now needs to aggressively follow through with futher explanation of their plans and the true blue sky possibilities of this operation. A conference call with stake holders and would-be investors would be a great place to start.
Time to market and mine--the future indeed, looks 'robust' and bright and the word needs to be spread.
PEAt LAST
Lion One Announces Robust Preliminary Economic Assessment for High Grade Gold Operation at Tuvatu Project in Fiji (ccnm)
NORTH VANCOUVER, BRITISH COLUMBIA and PERTH, WESTERN AUSTRALIA--(Marketwired - May 31, 2015) - Lion One Metals Limited (TSX VENTURE:LIO) (ASX:LLO) (OTCQX:LOMLF) (FRANKFURT:LY1), ("Lion One" or the "Company") announces the completion of an independent Preliminary Economic Assessment ("the Study" or the "PEA") for the Company's 100% owned and fully permitted Tuvatu Gold Project located on the island of Viti Levu in Fiji ("Tuvatu" or the "Project").
"The PEA for Tuvatu demonstrates robust economic potential for a fully permitted high-grade gold operation with low capital and operating costs, enabling rapid payback of capital even at current low gold prices," stated Lion One Chairman and CEO Walter Berukoff. "We view Tuvatu as a near term development and production opportunity in Fiji's major goldfield, with long term production potential in our substantial tenement holding."
PEA Highlights (all amounts are quoted in $USD utilizing a base case gold price of $1,200 per oz.)
Pre-tax Net Present Value (NPV) of $117 million (5% discount rate) on the current resource of the Tuvatu Project
Pre-tax Internal Rate of Return (IRR) of 67%
Pre-production capital costs of $48.6 million including 14.5% contingency; first gold production following development and construction period of 15 months
Operating costs of $567 per oz.; all-in sustaining costs of $779 per oz.
1.5 year payback period, followed by production of 91,229 ounces in year 2 averaging 16.5 g/t Au, and 92,056 ounces averaging 14.40 g/t Au in year 3
Gold production of 352,931 oz. at an average grade of 11.3 g/t Au; current resource of 1.1 Mt Indicated at 8.46 g/t Au (299,500 oz.) and 1.5 Mt Inferred at 9.7 g/t Au (468,000 oz.) at a cutoff grade of 3.0 g/t Au
PEA Summary (reported in US$)
Project Life (Years) 7.4
Total Gold Produced (oz. Au) 352,931
Average Annual Production (oz. Au) 57,320
Capital Costs (millions) $48.6
Average Mining Cost ( per tonne) $76.50
Processing Costs (per tonne) $43.80
Mining Dilution 20 %
Metallurgical Recovery 86.3 %
Inferred resources as percentage of tonnage 55.1 %
Inferred resources as percentage of ounces 62.7 %
Summary Economics at US$1,200 per ounce Gold
Total LOM Undiscounted Revenue $423,516,000
Total LOM Pre-Tax Cash Flow $148,726,000
Average Annual Pre-Tax Cash Flow $33,222,000
Total LOM After-Tax Free Cash Flow $112,540,000
Average Annual After-Tax Free Cash Flow $20,079,000
Discount Rate 5 %
Pre-Tax NPV $116,991,000
Pre-Tax IRR 67 %
Pre-Tax Payback (Years) 1.25
After-Tax NPV $86,542,000
After-Tax IRR 52 %
After-Tax Payback (Years) 1.50
Cash Costs per oz. Au $567
Cash Costs per oz. Au including Sustaining Capex $779
Mineral Resources
The PEA is based on an Indicated and Inferred mineral resource estimate by independent Qualified Person Ian Taylor, BSc (Hons), MAusIMM(CP) of Mining Associates Pty Ltd. For further details, see the Company news release dated June 4, 2014 and the technical report released July 9, 2014. A summary of this resource (reported at a cut off grade of 3.0 g/t Au - highlighted) is as follows:
Cut off Indicated Resource Inferred Resource
g/t Au tonnes g/t Au oz. Au Tonnes g/t Au oz. Au
1.0 1,943,000 5.61 350,300 3,022,000 5.8 561,000
2.0 1,435,000 7.07 326,200 2,156,000 7.5 520,000
3.0 1,101,000 8.46 299,500 1,506,000 9.7 468,000
5.0 683,000 11.25 247,000 872,000 13.9 390,000
The summary review of geology, resource models, and estimates and the site visit were conducted by Mr. Taylor, who visited the site from Feb. 25-28th, 2014. Mr. Taylor viewed the geological setting, located some drill collars, and inspected drill core and sample storage.
Estimated Operating Costs
Operating Costs (per tonne milled) US$ per tonne milled
Mining Costs 76.50
Processing Costs 43.83
General & Administrative 19.49
Exploration 1.53
Direct Operating Costs before Taxes and Royalties 141.35
Operating Costs (per oz. Au) US$ per ounce Au
Mining Costs 243.98
Processing Costs 139.78
General & Administrative 62.16
Exploration 4.89
Refining & Transport 2.40
Royalty 114.00
Total US$ Cash Costs 567.21
Cash Costs Including All-in Sustaining Costs Per tonne at Mill Per oz. recovered
Onsite Mining 76.50 243.98
On-Site Processing 43.83 139.78
G&A 19.49 62.16
Exploration 1.53 4.89
Refining 0.75 2.40
Royalties 35.76 114.00
Total Costs 177.86 567.21
Capex 66.28 211.38
All-in Cash + Sustaining Costs 244.14 778.59
Capital Costs
Pre-Production Capital US$ ('000s)
Capitalized Development 8,984
Mining Equipment 5,906
Processing 13,255
Infrastructure 7,578
Indirect Costs 2,564
EPC 2,064
Owner Costs 2,109
Contingency (14.5%) 6,142
Total US$ 48,603
All-inclusive pre-production capital is estimated at $48.6 million, including $27.6 million for the processing plant and surface infrastructure, and an added contingency and allowance for taxes and duties of $4.7 million. A further $26 million will be spent after the pre-production period as sustaining capital. LOM capital totals approximately $74.6 million, or $211 per ounce gold. Sustaining capital consists of capitalized waste development after the initial production start-up, major equipment purchases, and tailings facility development.
The capital cost (CAPEX) estimate includes all costs required to develop, sustain, and close the operation for an initial planned 6.2 year life of mine. The construction schedule is based on an approximate 15 month build period. The accuracy of this estimate is +-30%.
The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA will be realized. Please see the important disclosure under "Cautionary Note Regarding the PEA" below.
Opportunities to Enhance Value
In addition to the favorable economic profile outlined in the PEA, there are numerous opportunities to enhance value in the project through further resource expansion and optimization work at Tuvatu.
Additional infill drilling is recommended to upgrade Inferred Resources in the high grade areas of the Upper Ridges and Murau mineralized zones. It is anticipated that underground drilling in these zones could potentially extend down dip and along strike extensions of these zones and potentially increase the resource base.
Further refinement of the processing circuit and metallurgical recoveries could enhance production values and metallurgical recoveries
Stockpiling of mineralized material prior to processing could provide an advance source of mill feed
Exploration outside the existing resource area but within the boundaries of the Mining Lease area has further discovery potential.
Risks
It is the conclusion of the Qualified Persons (QP) that the PEA summarized in this technical report contains adequate detail and information to support a potentially positive economic result. The PEA proposes the use of industry standard equipment and operating practices. To date, the QP's are not aware of any fatal flaws for the Project.
The most significant potential risks associated with the Project are: uncertain knowledge of some resource areas and the possible impact on mining method, dilution, scheduling, safety, etc., uncontrolled dilution, unforeseen scheduling delays, changes in regulatory environments, environmental compliance, operating and capital cost escalation, ability to raise Project financing, and gold prices. These risks are common to most mining projects, many of which can be mitigated through adequate engineering, planning, and proactive management.
Mining
Tuvatu is contemplated as an underground mine. To minimize dilution the envisaged mine plan utilizes shrinkage stoping, and produces a total of 1.13Mt of mill feed over the 6.2 year project production life. The current mine plan focuses on achieving consistent mill feed production rates and mining higher grade material early in the production schedule. The current mine plan utilizes the existing decline enabling significant reductions in pre-production time and reduced capital development costs.
The proposed processing rate of 219,000 tpa was used along with underground design and deposit constraints to generate a detailed equipment list and mining fleet suitable for the LOM plan. The capital cost for this list is based on quotations from major suppliers. Mining costs were calculated from first principles using quotes from equipment and consumables suppliers, and Fijian and ex-pat labour rates.
Mine planning, production scheduling, capital and operating cost estimation for the Tuvatu Gold Project were conducted by AMC Consultants Pty Ltd (AMC). A site visit was undertaken by David Lee, AMC Principal Mining Engineer September 9th and 10th, 2014. During the visit Mr. Lee visited the Project site and met with a number of potential suppliers and open pit mining contractors.
The Study considered Indicated and Inferred Mineral Resources. There are no Measured Mineral Resources. Inferred Mineral Resources comprise 55.1% of the mined tonnes and 62.7% of the contained ounces in the mine plan developed in this Study.
There are four main zones contained in the Mineral Resource model. Snake/Murau zone is steeply dipping and strikes east-west. The Tuvatu zone is steeply dipping and strikes north-west by south-east, and is located north of the Coreshed Fault. The SKL zone is shallowly dipping. The Upper Ridge zone is steeply dipping, striking north-south and contains over 80% of the conceptual production ounces.
Underground
Mine access will be via two main declines from surface, with a gradient of 1:7 and dimensions of 4.5 meters wide x 4.5 meters high. Access to the ore will be made from the main decline and two internal declines. Two ventilation raises to surface are included.
Level access drives are designed at 4.0 meters wide x 4.0 meters high and drawpoints at 3.5 meters wide x 4.0 meters high. These dimensions enable use of medium sized loaders for improved productivity and truck loading close to the stoping area. The primary mining method is shrinkage stoping (airleg method) with limited breast stoping (airleg method for shallow dipping lodes).
Geotechnical and hydrogeology
AMC was engaged for geotechnical study of the Tuvatu Project. This work involved data processing from 21 resource drillholes followed by an empirical analysis for underground designs. No site visit was undertaken by the geotechnical engineer and no dedicated geotechnical holes were drilled. Expected ground conditions can be described as "fair" to "very good". The majority of ground can be characterized as "good". Where geotechnical knowledge is uncertain, further investigation will be undertaken prior to any mining.
The standard shrinkage stoping panel size is based on a 60 m level interval and 60 m strike length. Sill pillars between the stope panels should be at least 6 m high.
The recommended standard ground support for development drives in good ground is friction bolts installed on a regular pattern. Areas where ground conditions are blocky will require surface support, such as welded wire sheet mesh.
Developing through and in the vicinity of the Coreshed Fault is expected to be challenging and require heavy ground support.
The hydrogeological study was undertaken by Knight Piesold Ltd. Limited information is available on hydrogeology. The rock mass itself, particularly in the fresh rock exposed in the Upper Ridges zone, is impermeable and dry. Significant water inflows are reported from a major fault, the Coreshed Fault, located on the northern end of the mineralization.
Mine Production Schedule
The proposed underground mining schedule is shown below. Inferred Mineral Resources (IMR) comprise 55% of the material, based on tonnes, and 62.7% based on ounces.
Underground Mining Schedule
Item Unit Year -1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Total
Total
Tonnes Kt 22.0 140.5 172.0 198.3 196.8 197.0 167.2 31.7 1,125.5
Grade g/t 7.38 16.36 16.49 14.44 8.57 7.11 7.49 6.87 11.30
Contained Ounces Koz 5.2 73.9 91.2 92.1 54.3 45.0 40.3 7.0 409.0
Indicated
Tonnes Kt 16.3 68.9 65.7 61.9 75.6 111.2 93.6 12.4 505.6
Grade g/t 7.41 14.21 13.47 9.42 8.17 7.10 7.45 6.18 9.39
Contained Ounces Koz 3.9 31.5 28.5 18.7 19.8 25.4 22.4 2.5 152.7
Inferred
Tonnes Kt 5.7 71.6 106.3 136.4 121.3 85.8 73.5 19.2 619.9
Grade g/t 7.29 18.42 18.36 16.72 8.83 7.11 7.55 7.33 12.86
Contained Ounces Koz 1.3 42.4 62.8 73.3 34.4 19.6 17.9 4.5 256.3
Inferred Mineral Resources of mined tonnes 55.1 %
Inferred Mineral Resources of contained ounces 62.7 %
Mineral Processing
The processing facility flowsheet has been selected based on the criteria defined by the physical characteristics of the mineralized material and metallurgical testwork undertaken. The comminution facility is a conventional two-stage crushing and screening circuit, followed by two-stage grinding. The grinding circuit, which includes gravity recovery, then feeds flotation where a sulphide concentrate is produced and reground prior to entering the Carbon-In-Leach (CIL) circuit. Both the flotation tails and concentrate are leached, followed by detoxification and tails deposition.
A gold recovery of 86.3% has been proposed for the economic evaluation based on the median of the variability testing results.
The process facility has been designed to treat 219,000 tonnes per annum of gold bearing material at the projected plant throughput of 600 tonnes per day. With an estimated combined LOM average feed grade of 11.3 g/t with the overall process recovery of 86.3%, the estimated average gold production is 57,342 ounces per annum.
Economic Analysis
A discounted cash flow model was prepared based on the mining schedule and estimated capital and operating costs. The early mine operating costs (pre-production) are capitalized.
At a base case gold price of US$1,200 per ounce, the Project has a pre-tax IRR of 67% (after-tax IRR of 52%) and an after-tax payback period of 1.50 years after start of production. At a discount rate of 5%, the before-tax NPV is $117.1 million, with a post-tax NPV of $86.6 million.
Production Summary
Production Year 1 2 3 4 5 6 7
Projected oz. gold produced
Indicated Resources 30,500 24,569 16,171 17,130 21,920 19,356 2,132
Projected oz. gold produced
Inferred Resources 37,763 54,163 63,273 29,697 16,938 15,406 3,913
Cash costs US$ per oz. $622 $518 $499 $745 $755 $749 963
Process Infrastructure
Access Roads
The Tuvatu site is accessed via a 17 kilometer road from Nadi international airport. The road is in good condition, but the last few kilometers closer to the plant site will require upgrading and appropriate maintenance to accommodate larger loads and to ensure reliable access during the wet season.
Power Supply
The project will be required to generate its own power due to insufficient power being available on the Fijian grid system. A containerized diesel power station, including switchgear and transformers, is proposed for the project with a capacity of 4MW in an N+2 configuration. This will ensure supply reliability and provide enough reserve to start the larger ball mill motors. Power supply costs are based on a delivered diesel fuel cost of USD$0.90/l for a total cost of USD$0.24/kWh.
Water Supply
Reclaim, run-off and mine dewatering will supply water for the project site. The mine dewatering from underground pumping will be used to provide the raw water requirements to service the project needs. The Coreshed Fault, one of the major fault structures identified on site, is a significant water bearing structure and can provide a supply during the dry season. It has been determined that raw water can further be managed by controlling the flows from the tailings facility catchment to allow storage of raw water make-up to the process in the impoundment.
Tailings Storage Facility (TSF)
The TSF will be located approximately 2.0 km southwest of the proposed plant site. The compacted rock-fill embankment will be constructed with the design utilizing ridges to reduce the volume of embankment construction materials required. The facility has been designed to store a total of 1,200,000 t of tailings at an average process plant discharge rate of 600 tpd, with sufficient capacity to contain wet year supernatant and runoff events.
Accommodation
No accommodation will be provided on site given the proximity of local towns and villages. Various site buildings will be constructed to house offices, amenities, warehouse, and workshop facilities.
Processing and Administration Costs
Process plant and infrastructure costs have been estimated in US dollars (US$ or USD) as at 2nd quarter 2015 to an accuracy of -+30%. Capital costs for the process plant and surface infrastructure total $27.6 million with added contingency and allowance for duties and taxes of $4.7 million totaling $32.3 million. The operating costs for the processing plant including labour, consumables, power, and maintenance materials will be $43.83 per tonne based on 219,000 tpa plant capacity. Site general and administration operating costs will total a further $3.6 million per year.
Qualified Persons
The technical information contained in this news release is based upon information prepared by Mr. Ian Taylor BSc (Hons) MAusIMM(CP) of Mining Associates Pty Ltd, and Mr. David Lee, Principal Mining Engineer at AMC Consultants Pty Ltd. A technical report will be authored by Mr. Stacy Freudigmann P. Eng, Principal at Canenco Canada Inc. under the guidelines of NI 43-101. These QPs are independent of the Company as defined by NI 43-101.
The information in this report that relates to the Exploration Results or Mineral Resources is based upon, and fairly represents, information and supporting documentation compiled by Mr. Stephen Mann, who is an officer and director of the Company and is a member of The Australasian Institute of Mining and Metallurgy. Mr. Mann has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and the activity in which he is undertaking to qualify as a Competent Person under 2012 Edition of the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves (JORC Code). Mr. Mann consents to the inclusion in this news release of the matters based on his information in the form and context in which it appears. The Company confirms that it is not aware of any new information or data that materially affects the information included in previous news releases referred to above, and confirms that the form and context in which the findings are presented have not been materially modified from the original news releases.
ctoivo,,,, that is great news.
However, letting people get in beforehand would be a severe violation.
Insider trading on exclusive news is a big no no.
We don't need any ethical lapses
PEA to be released
from Joe Gray at Lion's PR dept Sunday am
:
"The PEA will be released in Australia this afternoon. I'll forward the NR as soon as I can.
The Metals Forum yesterday was a huge success! We should have a terrific week."
I would have thought there would be a halt first and that they would wait until Tuesday to allow attendees at the Metals Forum a chance to buy shares if they chose to before news. Should be interesting.
IR won't confirm a question like that.
It's imminent. And that is the truth.
One day this coming week we should get something.
Haven't reached out to IR, is early next week confirmed?
No reason to speculate now. I'm looking for a stock halt on Monday or Tuesday and then the news! I spoke with Mike Hoy today, and thats what he was told by PR at LION. Hopefully they'll set up a conference call.
The best time to buy a gold producer
from the Finantial Post on Tuesday.
What’s the most attractive segment of the gold sector? A new report suggests producing companies with new projects are a good place to seek higher-than-average returns............He found that the best point to invest is almost always one year before commercial production. “We feel the same thesis could be applied towards producing companies with new projects where investors will only ascribe significant valuation once a new mine is about a year from completion and no financing overhang exists,”
Lion should have a relatively low Capex. (We'll see in a few days), and it will likely be a good buy for years due to the great exploration potential.
http://business.financialpost.com/investing/trading-desk/the-best-time-to-buy-a-gold-producer?__lsa=7ee7-b3c1
Very interesting article.
thanks for posting CT
This is from a site called South Pacific Metals Gold news.
An entrepreneur’s vision to build sustainable growth
Lion One Metal’s Chairman and CEO Walter H. Berukoff holds a 30-year lasting track record as a successful entrepreneur, merchant banker, real estate developer and financier. In the global mining industry Berukoff is known as one of the “big game hunters” since he was responsible for the discovery of some world-class gold- and copper deposits both in North- and South America. Through his privately held merchant bank Red Lion Management Ltd. he was involved in the foundation and building of several famous mining companies such as Miramar Mining, Northern Orion Resources and La Mancha Resources.
In 1993 Red Lion Management purchased the Con Mine in the Canadian Northwest Territories for $25 million CAD from Kennecott Exploration, which is today a subsidiary of the Rio Tinto Group. Subsequently Berukoff’s private company sold the mine to Miramar Mining. And under his chairmanship the Con Mine became a very significant gold mine in Canada with over 730,000 produced ounces during the years 1993-2000. Finally in 2007, Miramar Mining was sold to Newmont Mining for $1.5 billion USD.
Back in 1998, as Chairman of Northern Orion Resources, Mr. Berukoff initiated the first foreign mining venture of its kind in Cuba since the revolution: The successful activation of the Mantua open pit gold- and copper mine.
Mr. Berukoff was in charge of another significant transaction in the year 2006 which has made a great stir in the mining industry: Within a reverse takeover, the gold producing and exploration assets of Areva NC – a subsidiary of the French Areva Group which is today a global leader in nuclear energy and major player in renewable energies, were moved into La Mancha
Resources. As a result, this reverse takeover created a very successful global gold producer on the Toronto Stock Exchange. La Mancha was sold for $493 million USD to Weather II Investments owned by the Egyptian billionaire Naguib Sawiris in 2012.
But Walter Berukoff also holds a significant track record within various exploration projects around the globe. At Northern Orion he developed the Aqua Rica deposit in Catamarca, Argentina. One day the rich ore body could be recognized as the largest copper producer in the world. The deposit has a measured and indicated resource of 14 billion pounds of copper and 8.9 million ounces of gold. Northern Orion was sold to Yamana Gold for $1.07 billion USD in 2007.
During his career Walter Berukoff has raised over one billion dollars for global mining projects and in these days he also has a clear vision for Lion One Metals Ltd. and the Tuvatu Gold Project: Building a world-class low-cost producing gold mine in the South West Pacific Region.
In 2007 Emperor Mines Ltd., the former operator of Vatukoula in Fiji had been taken over by South African based Durban Roodepoort Deep Gold Ltd. Their minority interest in the Porgera Gold- and Silver Mine in Papua New Guinea (PNG) was sold to Barrick Gold for $250 million USD. Emperor could settle all is debt and was keeping $130 million USD, but not before selling off their Fijian assets including the mining rights to Westech Gold Pty Ltd. They wrapped up this transaction and moved on. Mr. Berukoff recognized this opportunity and through his merchant bank he funded the Westech purchase.
The explanation why the Tuvatu Gold Project had been placed on care and maintenance instead of preparing it for a mining operation is very simple: Emperor had been forced to conserve cash to manage its margins and service debt when gold prices dipped below $300 USD per ounce in the late 1990s and early 2000s. By the time gold prices recovered in 2004-2006 the company was preparing to exit Fiji. Tuvatu was put on the shelf and this enabled Red Lion Management to acquire Emperor’s assets in Fiji. Afterwards Mr. Berukoff decided to sell his interest in Vatukoula and vended Tuvatu and Emperor’s exploration assets into Lion One Limited Fiji. At that time he reviewed Emperor’s positive feasibility study for Tuvatu and visited the project site with Emperor’s best Fijian geologists. He finally came to the conclusion that it is a great geologic environment: The Tuvatu Gold Project, as a typical high-grade, low-
sulphidation epithermal gold deposit in the South West Pacific Region hosted in a volcanic-intrusive sequence within a postulated collapsed caldera setting, has some ideal attributes a “big game hunter” in the gold mining industry is looking for.
During the first three years Walter Berukoff funded Lion One Limited Fiji privately, prior to the formation of Lion One Metals Ltd. in early 2011 through a reverse takeover at the TSX Venture Exchange (TSX-V) between X-Tal Minerals Corp. and American Eagle Resources Inc. From the beginning Mr. Berukoff has been focused on obtaining the necessary permits in order to start with the exploration workings and to get the Tuvatu Gold mine into production. Today Lion One Metals holds the approval for the Environmental Impact Assessment (EIA), has secured a 21-year Surface Lease Agreement in 2014 and just recently, a Special Mining Lease has been granted by the Ministry of Land and Resources. At the present time the management is looking forward to the results of a pending Preliminary Economic Assessment (PEA).
Lion One’s capital structure is still intact with over $5 million CAD in working capital. The company follows a multifaceted approach: On the one hand initiating production within scalable, modular mining operations, and on the other hand funding further exploration and development. This combined strategy is not new in the mining industry. Harmony Gold and Newcrest Mining are jointly developing the giant Wafi-Golpu gold- and copper project in PNG. In late 2012 they had to change direction due to a new feasibility study which estimated the total capital expenditures over the entire mine life at $9.8 billion USD. Instead they are now concentrating on low risk and expandable modular mining operations, funding further development expenses through cash flow.
For Lion One Metals the Tuvatu Gold Project represents a very unique situation: It is extremely difficult for a junior gold miner to discover, develop, finance, and permit a gold mine. There are a lot of factors out of your control. Often the market remains irrational and behaves very ambivalent over a time period much longer than you can stay solvent – which is a typical inherent risk for junior gold mining companies. But the Tuvatu Gold Project was already significantly de-risked when it was acquired and Lion One was steadily focused to do the same.
In these challenging times it is important to know that regardless of market conditions or
sentiment in the industry, there will always be a demand for new gold mines as the established ones must replace their ounces and the market will pay more for less risk. Lion One Metals has a great positioning and visibility in the industry with permitted mining operations on a high-grade gold deposit in a very stable jurisdiction that actively supports mining.
…to be continued…
With best wishes
Maurice Höwler
http://southpacificmetals.com/2015/04/an-entrepreneurs-vision-to-build-sustainable-growth/
Metals Investment Forum
Coffin and Lundin are both speaking--both on Lion's side. Hopefully they will be mentioning companies when they speak. LIO Booth 809
Coffin mentions Lion again yesterday.
http://www.stockhouse.com/opinion/independent-reports/2015/05/22/eight-picks-from-four-mining-and-metals-analysts
Hard Rock Analyst - Lion One Update
Lion One Metals (LIO-V; $0.50) has been trading very well every since it was featured in the last issue of the HRA Journal. Conversations with management indicate that the PEA that has been delayed a couple of times should finally be release within a couple of weeks. As noted in the last Journal I expect this PEA to focus on the highest grade zones at Tuvatu resulting in a moderate sized operation that will generate strong cash flows and rapid payback of capital.
While this won’t be a feasibility level study LIO will probably stick to dealing with Indicated resources. That would make the study easier to market to prospective finance groups and suppliers. Keep in mind however that I expect Lion One to follow the time honored process of getting an underground operation started then drilling ahead to replace reserves as they are mined. There is lot of room to make the resource larger though the near term focus is sure to be pulling a financing package together to get production started as expeditiously as possible.
I’m frankly surprised that it hasn’t taken more trading volume for the share price to move to and hold the current trading range. LIO has fairly large insider ownership but there must be other large shareholders who aren’t sellers at these levels. Most share-holders own the stock at a higher cost than the current trading range and seem to be comfortable management will build value and are willing to wait to see it happen. That is a recipe for a stock that will respond well to good news which is what I still expect to see coming from LIO. The stock is still worth buying at these levels.
Lion One is a presenting company at the Metals Investor Forum on May 30th in Vancouver.
June starts next week!
So I can wait a bit!
The PEA is close, very close.
I did get from my conversation with IR an intuition that the PEA will not be done in time for a May release, But very early in June is a distinct possibility.
@CTOIVO
I think the PEA will come by mid-June... someone stated here that the IR said it takes a bit more longer then expected... might be beginning of June... if they said that, I assume it's gonna be in June! I just hope it won't be end of June... it's freaking summer and everybody is in vacation... so I hope they can issue that pretty quickly!
I think you did the calculation once on this forum... but let's assume a 8,46 g/t... if they have a mill that can run 600 tons a day, let's say they are working hard for a total of 300 days... that would give us around 53 000 onces in a year... approximatively 6 years with the proven ressource and almost an extra 9 years with the inferred ressource and that without any increase of the ressource at all...
Now let's assume a low cost per once of 700$ to produce it... we are talking between 25-27 million $ of pure profit short short term... Like I told you, market should move in advance on those estimates...I understand that part of this profit might be use to explore potential spots on the property... but we are only talking about the tip of the iceberg here... if it's a porphyry you can multiply that ressource multiple time easily...
I hope Coffin is right saying this can be valued at a 100 million $ as soon as the PEA is out if it shows good numbers... and I hope it will...
Now, how much can a major pay? How much is Walter willing to sell for? That is the question... but if I am a big company with deep pocket, that is a play I want to buy sooner then later and save few 100 millions easily!
Time will tell... I really hope the PEA gets out soon!
Geologic Study
Although geologic studies can make non geologists heads spin, I found parts of this one interesting and pertinent. It was referenced in the magnetic survey that Lion took their gravity map from which can be found in their presentation.
Tuvatu Gold-Silver Telluride Deposit, Fiji: Comparisons with the Emperor Deposit
Abstract
The Tuvatu gold-silver telluride deposit with reserves of 13 t Au is the second largest gold deposit in Fiji after the large Emperor gold telluride deposit The deposits are 50 km apart and occur along the 250-km east-northeast trending Viti Levu lineament. They are spatially associated with alkaline rocks of almost identical age (~5.4–4.6 Ma) and having a shoshonitic affinity. The gold mineralization in both deposits is spatially and genetically related to monzonite intrusions and to a low-grade porphyry copper-style system. The Emperor deposit occurs along the margins of the Tavua volcano whereas the Tuvatu deposit may occur adjacent to an eroded shoshonite volcano. At both locations, low-sulfidation, epithermal gold telluride mineralization occurs in flat-lying veins, steep faults, shatter zones, stockworks, and hydrothermal breccias. (At Tuvatu) Individual veins contain between 2 and 100 g/t Au, with the Upper Ridges veins containing the highest grades (5–100 g/t Au).
Mineralization in both deposits formed in multiple stages and is characterized by the presence of quartz-roscoelite telluride veins in which gold-rich tellurides were deposited prior to silver-rich tellurides. Both deposits have gold grades of about 9 g/t and contain precious metal tellurides.
Gold reserves for the Tuvatu and the Emperor gold deposits share several geological, geochemical, and geophysical attributes. These similarities suggest a common origin for the two mineralizing systems. Both are associated with prominent regional-scale gravity anomalies along the Viti-Levu lineament. The deposits are spatially related to monzonite intrusive and extrusive rocks of similar composition and of almost identical age.
Porphyryand epithermal-style mineralization at the Emperor deposit is similar to in porphyry-style mineralization at the Tuvatu deposit. Both deposits exhibit a genetic relationship between low-grade porphyry Cu mineralization and epithermal gold telluride mineralization, with the latter forming in flatmakes, steep faults, shatter zones, stockworks, and hydrothermal breccias in both deposits. These deposits also possess similar alteration styles, pyrite morphologies paragenetic sequences, and telluride mineralogy. Although fluids responsible for porphyry-style minerallization at both places were likely boiling, those associated with the porphyry-style mineralization at Emperor were cooler (~350°C) and generally less saline (up to ~15 wt % NaCl equiv) than those associated with porphyry-style mineralization in the Tuvatu and H lodes in the Tuvatu deposit.
Implications for exploration
The Tuvatu and Emperor deposits are low-sulfidation gold deposits hosted by alkaline igneous rocks and, in this respect, share geologic affinities with other low-sulfidation deposits in the southwest Pacific (e.g., Porgera, Papua New Guinea. Among these geologic similarities is the transition from porphyry- to epithermal-style gold mineralization at Porgera and Ladolam, which is also apparent at Far Southeast-Lepanto, Philippines. In addition, there appears to be a genetic relationship between large epithermal gold deposits and spatially related satellite deposits or prospects. Examples include the Porgera and Mt. Kare deposits, which are 18 km apart , the Ladolam deposit and Conical Seamount occurrence, located 10 km apart , and the Emperor and Tuvatu deposits. In each of these examples, there is a strong similarity between the geologic setting, the composition of the igneous rocks genetically related to mineralization, and the precious metal mineralization and associated alteration for the large deposit and its satellite.
http://eps.mcgill.ca/~courses/c561/Scherbarth%20and%20Spry%202006.pdf
Interestingly, the gravity map on Lions presention shows Tuvato with apparently a greater signature than Vatukoula. Perhaps Vatakoulu is the satelite of Tuvatu. (yeah-thats the ticket)
More likely to be the end of the week or maybe into June for the PEA.
Taking longer than planned.
Hi Simon, Yes you may be right as the market does, or should, look forward. I don't want to overestimate too much and be disappointed.
Pretty darned exciting though. I'm hoping for a halt Tuesday since they wouldn't do it on US Memorial day.
I think your expectation are way undrvslued...and your timeframe is way too long...
Don't forget the market pays for what is expected....if they can establish a value of the cashflow, even if it's in a year from now...they will apply a discount because of the timeframe... And a small discount on the value... But the big jump will happen much faster...
Today's value is based on expected profit and revenues... This will climb much faster then what you expect...
The float is own at 33% by insiders... Then a lot of the other shares are own by funds that paid between 1,25$ to 1,50$ for their shares... I don't expect them to sell soon... So if you want a decent amount of shares, you'll have to pay the price and this will jump very quickly...
And if they need to finance, they will have to raise the SP if they want to avoid dillution... And I think Walter is determined not to dillute too much...
At least this is what I expect....
Market cap of $23 mill. I can readily see a $70 mill market cap a year from now when they're milling gold. It would be a 300% gain and lots of upward potential from that over the next few years. Bonne Chance
Just spoke with PR Dept.///
The PEA is almost done, lots of back and forth on last minute details.
They are committed to getting the PEA done right. If it takes a bit longer than anticipated, so be it.
May come out by end of May, or early June. Not something you want to rush. It's a critically important document.
The good news is it's almost done.
Resource Opportunities weighs in, written by former mining writer of the Vancouver Sun
LION ONE METALS (LIO) Resource Opportunities initiated coverage of Fiji gold developer Lion One Metals on July 7, 2011. Gold was US$1,527 an ounce and Lion One shares traded for a dollar. The company's small but high-grade Tuvatu deposit on the main island of Viti Levu was described as an "exceptional gold exploration project in the midst of a region that hosts several large deposits." The nearest and most significant is the Vatukoula mine, about 40 kilometres to the northeast and along a trend of alkaline intrusive volcanics and epithermal gold deposits. Vatukoula is Fiji's largest gold mine andhas operated for more than 75 years, producing more than 7 million ounces of gold. Red Lion Management, owned by Lion One chairman and CEO Walter Berukoff, bought both the Vatukoula mine and Tuvatu in 2007, but he decided to sell Vatukoula to focus on Tuvatu. He funded the project privately to the tune of more than $3 million before taking Lion One public in early 2011. And the further you drill down into Tuvatu, the more interesting it gets. The property was formerly explored and developed by a previous operator of Vatukoula, which developed underground workings including a 600-metre decline and drilling stations. Following the approval of the mining lease on March 23, Lion One is in the unique position of having a mine at Tuvatu approved without having issued a PEA, PFS or FS (although the prior owner completed a feasibility study). Under Fiji's Mining Act, the mining lease is the final step in the permitting process. The mine has environmental approvals and Lion One has held over 240 meetings with local residents, landowners and stakeholders. Tuvatu is a high-grade, vein-hosted deposit with 39 veins averaging 2.2 metres wide in the resource model. At a cut-off grade of 3 g/t Au, Tuvatu's indicated resource comprises 1.1 million tonnes averaging 8.46 g/t gold, for 299,500 ounces, and an inferred resource of 1.5 million tonnes averaging 9.7 g/t for a further 468,000 ounces. There is also evidence of a gold porphyry system at Tuvatu and plenty of exploration upside on Lion One exploration leases, one of the reasons Berukoff hung onto the earlier-stage project. A preliminary economic assessment on Tuvatu is expected before the end of the month, and the price tag for a mine could be under $50 million, because of the amount of work done by previous owners. Lion One shares have already begun to run in anticipation, gaining 50%, or 16 cents, to 49.5 cents in the past 5 trading sessions. At a $30 million market cap, however, the stock remains cheap -especially if you think Lion One can finance a small producing mine and employ cash flow to build it. Having Berukoff as the chairman and CEO should help with the financing. If you've been a resource investor over the past 10 years, you've likely heard of Berukoff. And if you haven't heard of the man, you've heard of his projects. A mine builder who has played a major role in developing 20 mines in 7 countries, Berukoff is the founder and former CEO of Northern Orion Resources (sold for $1.1 billion to Yamana Gold in 2007), Miramar Mining (sold to Newmont for $1.5 billion in 2008) and La Mancha Resources, purchased by Egpytian group Weather II for $499 million in 2012. Lion One has the right kind of gold project - high-grade -and the appropriate development strategy for a bear market where the appetite for large, low-grade gold projects has dried up. Berukoff owns, directly and indirectly, and has control or direction over more than 33% of the stock, aligning his interests with other shareholders. We have a high degree of confidence in the management team and in Lion One's ability to finance a small mine at Tuvatu. Price: 49.5 cents Shares outstanding: 60,175,608 Fully diluted: 63,735,608 Market cap: $29.8 million Working capital: $5 million Company phone: 1-855-805-1250 (toll-free) Email: info@liononemetals
Northern Miner article
about Lion-- June 2012
Tuvatu, however, was the prize that Berukoff wanted to keep. Part of the reason was because the project offered aspects of both an early stage greenfield exploration camp and a more developed project with a feasibility study already completed on a small portion of the property.
The study only considered the Tuvatu deposit itself. What excites Berukoff and his team are gold showings in outlying areas that could yield a series of new deposits. Optimism is being fuelled by early stage exploration work and the broader geological story of the region, as mineralized calderas in the South Pacific often host multiple gold deposits. This is the case at the nearby Vatukoula mine, which exploits seven distinct deposits. Trenching and IP results indicate that the (Tuvatu) deposit could extend west and cover 1.5 km of strike length.
Berukoff, who has an enviable list of past mining success, has a hard time containing his enthusiasm for his latest endeavour. “This is the dream of my life,” he says. “Emperor needed production immediately at Vatukoula, and they had enough ounces there to go forward,” (at Tuvatu) he explains. “But for us we looked at Tuvatu as if it could be in the middle of a goldfield. And we have proven to ourselves that we are indeed a large system.”
http://www.redlionmgmt.com/PR/Northern%20Miner%2006.18.2012.pdf
Read more at http://www.stockhouse.com/companies/bullboard/v.lio/lion-one-metals-limited#ElLzEWY26mfv02SC.99
$LOMLF recent news/filings
bullish
there's a gold mine in Fiji
http://www.liononemetals.com/fiji-gold
## source: finance.yahoo.com
Tue, 24 Mar 2015 13:10:33 GMT ~ Lion One Announces Grant of Mining Lease Approved for High Grade Tuvatu Gold Project in Fiji
[at noodls] - Related documents View PDF Grant of SML 62 Approved by Fiji's Minister of Lands and Mineral Resources 21-Year Surface Lease Secured, EIA and EMP's Approved by Dept. of Environment Exclusive Development ...
read full: http://www.noodls.com/view/911D1ED58C766C1A96404F29CDE3E70000A94819
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Mon, 23 Mar 2015 07:01:00 GMT ~ Lion One Announces Grant of Mining Lease Approved for High Grade Tuvatu Gold Project in Fiji
[Marketwired] - Lion One Metals Limited announces today that Fiji's Minister of Lands and Mineral Resources has approved the grant of a Special Mining Lease for the Company's wholly owned Tuvatu Gold Project located on ...
read full: http://finance.yahoo.com/news/lion-one-announces-grant-mining-070100212.html
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Thu, 05 Mar 2015 18:04:20 GMT ~ LION ONE METALS LTD. Financials
read full: http://finance.yahoo.com/q/is?s=lomlf
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Wed, 22 Oct 2014 16:50:14 GMT ~ Lion One Receives Environmental Approvals For Construction And Development At Tuvatu Gold Project In Fiji
[at noodls] - announces that the Company has received approval from the Fiji Government's Department of Environment for its Construction Environment Management Plan and Operation Environmental Management Plan (the EMP's) ...
read full: http://www.noodls.com/view/7612209C37118AAF86B805AA49AE43459BBC38BB
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Wed, 22 Oct 2014 15:48:27 GMT ~ Lion One Receives Environmental Approvals for Construction and Development at Tuvatu Gold Project in Fiji
[Marketwired] - Lion One Metals Limited announces that the Company has received approval from the Fiji Government's Department of Environment for its Construction Environment Management Plan and Operation Environmental ...
read full: http://finance.yahoo.com/news/lion-one-receives-environmental-approvals-154827475.html
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$LOMLF charts
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$LOMLF company information
## source: otcmarkets.com
Link: http://www.otcmarkets.com/stock/LOMLF/company-info
Ticker: $LOMLF
OTC Market Place: OTCQX International
CIK code: 0001509397
Company name: Lion One Metals Ltd.
Company website: http://www.liononemetals.com
Incorporated In: British Columbia, Canada
Business Description: Lion One Metals is a Canadian mineral exploration and development company focused on the advancement of the high grade Tuvatu Gold Project in Fiji.
$LOMLF share structure
## source: otcmarkets.com
Market Value: $24,906,684 a/o May 15, 2015
Shares Outstanding: 60,175,608 a/o Jan 30, 2015
Float: 28,604,814 a/o Aug 19, 2011
Authorized Shares: Not Available
Par Value: No Par Value
$LOMLF extra dd links
Company name: Lion One Metals Ltd.
Company website: http://www.liononemetals.com
## STOCK DETAILS ##
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## FUNDAMENTALS ##
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$LOMLF DD Notes ~ http://www.ddnotesmaker.com/LOMLF
Older report
From Frontier Research. I copied this when it came out in Nov. 2011. Its a good report although some of the information is, of course, dated--like the share price and price of gold. Still, it has information a lot of people don't know, some excellent maps and graphics, and a photo of a core sample containing an eye-watering 1,614g/t over ½ a meter length, that in itself is worth the trip.
From the report
The geology is also showing additional intriguing characteristics. We won’t bore you with the details but there are aspects of the deposit in terms of the veins, disseminated mineralization, and host rock that strongly suggest Tuvatu is the near surface expression of a much larger and deeper geologic system known as a Porphry system. These aspects are eerily similar to other such Porphry systems along trend in the southwest Pacific, which we briefly discussed earlier. If this is the case, the entire area has blockbuster potential. Remember Vatukoula (just 50km away) has produced 7.5Moz in its history and has 4Moz remaining with significant exploration upside.
http://goldinvestingnews.com/f.....-Issue.pdf
I hope you are right too Simon.
I'm being conservative here, don't want to pump.
But this stock started out at about 1.50. Lots of investors still in the hole from 2010.
It's all about the PEA!!
Hi Sorasaur,
Simon1707 from stockhouse! Ctoivo brought me here!
I think we will see the 1$ mark much faster then the end of summer!
The PEA will push it big time... And they will need to raise money...and won't want to dillute...I doubt they do a financing under 1,50$..; so my guess is that we might trade north of this value sooner then later!
Hope I am right!
Next week should continue to be an interesting one!
I still can't understand why IHUB does not update the
latest PR's on this thread. I sure hope they post up the anticipated PEA when it comes out later this month.
Could see this stock pushing $1.00 by end of summer.
Thanks for all your input ctoivo.
Sork.
Up 10% for a new high for the past year, and still a ludicrously low market cap of $25 million. Lion should double in value soon, and in a year to year and a half when they are producing be worth much more.
Congrats Sark, I guess we're the only ones paying attention. I see so many posts on IHUB talking about far out speculations, when here is a gold mine right in front of them.
TGR: Are there any other stories you would like to share with our readers?
EC: One other company I've followed for a while is a company called Lion One Metals Ltd. (LIO:TSX.V). Lion One has a high-grade gold vein deposit in Fiji called Tuvatu. Tuvatu has about 800,000 oz but the grade is 9–10 g/t. It's open in just about every direction and there are many veins on the property that haven't been sufficiently tested. I'll be fairly surprised if at the end of the day that isn't a 2–3 Moz resource.
Lion One is run by Chairman and CEO Wally Berukoff, a well-known mining promoter who has had a lot of success. He helped found Miramar Mining, Northern Orion Resources and La Mancha Resources Inc.—all three of which sold for more than $500M. Berukoff is committed to getting Lion One into production. The cheapest financing it has done since it went public was CA$1/share. It's trading at around CA$0.45 with $5M in the bank. I'm expecting a PEA very soon from Lion One. Like some of the examples above, I think it will focus on high-grade ounces and should generate some impressive numbers. Importantly, Tuvatu has all required permits for mining in place.
I can see $1.00 easy too Sark. The PR guy at LION has said they could be producing 70,000 oz per year in a few years which could well put the shares in the 3-5 dollar range.
Interesting info
from analyst Joe Reagor when he was talking about the giant, very high grade Pretium resource in BC.
"Brucejack is not "nuggety" in the sense of how we understand that term in the U.S. and Canada. The deposit structure is more similar to that which we see in islands in the Pacific Ocean, which makes sense because geologists tell us that part of British Columbia was an island before it joined the mainland. "
It will get very interesting at Tuvatu when they drill down to where Emperor found that 4 meters of 252 g/t.AU
All this upward movement....
without a peep out of the company yet.
PEA report due out within 30 days or less.
PR campaign to begin in earnest after PEA release.
I can see this share price closing in on a $.80- 1.00 soon.
LION’s on a roll. Up 50% in the last few days and still very inexpensive with a $24 million US market cap. I’ve heard from a trusted source that the coming PEA will be very good, with a low Capex, low cost per ounce, and the possibility of producing 70,000 oz per year in a couple of years. Still time to get out your calculators and do the math. Its still has only a $22 million market cap. They could be making that much in profit, after royalties and taxes, in a few years. With an ultra conservative PE ratio of 10, (would likely be 20) one can see the great potential here.
Always knew this day would come.
Question is how far does the first run go before the inevitable pullback.
LION starting to roll. Up 50% in the last few days and still very inexpensive with a $24 million US market cap. I've heard from a trusted source that the coming PEA will be very good, with a low Capex, low cost per ounce, and the possibility of producing 70,000 oz per year in a couple of years. Time to get out your calculators.
Mining in Fiji article from Resource World Magazine
http://resourceworld.uberflip.com/i/460990-resource-world-feb-mar-2015-vol-13-iss-2/39
PostPosted: Fri May 08, 2015 2:04 pm Post subject: Add User to Ignore List Reply with quote Edit/Delete this post Delete this post
Today the following was found in a US Post
Lion One Metals is ready to launch its Tuvatu Gold Project in Fiji, a mining exploration site that received government approval in March 2015 and covers more than 12,000 hectares. Credit: Lion One Metals
Following the approval by the Fijian government to explore the high-grade gold mine on the island of Viti Levu, Lion One Metals is committed to develop the property with local and Asian partners, believing this is an opportunity to show the world that Asian equipment and expertise can meet the challenges of such projects in other parts of the world.
CEO Walter Berukoff said: “We’re very much interested in looking for partners in Asia who are willing to participate in the Fiji venture.”
The much anticipated Tuvatu Gold Project in Fiji was approved in March 2015. The license allows Lion One Metals to explore about 12,166 hectares on Viti Levu for the next 21 years.
As the company sets its sights on reaching the production phase, Berukoff cited the improvement of production through more equipment and technology purchases, and securing more off-take agreements in the Asian market as key strategic priorities, while maintaining strong Asian involvement in all aspects of this project.
He said: “We’re always concerned with expertise and capital required when we operate. I believe the Asian market has the necessary capital and expertise needed.”
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