The highlights of this Canadian company's cornerstone asset are outlined in an Echelon Wealth Partners report.
In an Oct. 23 research note, analyst Ryan Walker reported that his firm Echelon Wealth Partners added Lion One Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX) to its Watch List after meeting with the company's management at the recent Precious Metals Summit.
Lion One's flagship asset is Tuvatu, the alkaline high-grade gold project on Fiji's Viti Levu island. The current existing resource consists of diluted Indicated resources of 1.1 million tons at 8.46 grams per ton (8.46 g/t) gold, based on a 3 g/t cutoff grade. The Inferred resource totals 1.5 million tons at 9.7 g/t, or 468,000 ounces.
"Importantly," Walker pointed out, "about 80% of the existing resource is within just 200 meters (200m) of surface. Yet past drilling was done primarily within 300m from surface and only a small fraction went below 400m down.
Accordingly, the Canadian exploration company, earlier this year, launched a four-hole drill program to test for deep feeders to Tuvatu's existing high-grade resource.
Also noteworthy is that a preliminary economic assessment of Tuvatu, completed in 2015, showed robust economics, noted Walker. The report outlined an underground mine producing a total of 352,931 ounces of 11.31 g/t gold over the first seven years. The payback period was estimated to be 1.1 years.
This scenario would result in a post-tax net present value 5% of US$150 million and an internal rate of return (IRR) of 79% at a US$1,500 per ounce gold price. "We note the still robust 33% after-tax IRR even at $1,000 per ounce gold," Walker commented.
Further, Tuvatu is fully permitted for development, construction and mining by the Fiji government, and Lion One has a 21-year surface lease agreement at the project with local landowners and the iTaukei Land Trust.
Lion One's stock is currently trading at CA$0.90 per share.