Tag Archives: Lion One

The Next Gold Mine in Tropical Paradise Obtains $40 Million Financing

Lion One Drill Pad, Tuvatu

Two projects on a mining-friendly tropical island are moving forward, one in the final ramp-up to production and one at a very early stage.

Streetwise Reports  | 12 June 2018

Thoughts of Fiji conjure up the tropics, beaches and sunshine, but the island nation is also noted for its mineral production. The Vatukoula mine, in operation for over 80 years, has produced more than seven million ounces of gold.

Vying to join its ranks on the politically stable and mining friendly island are Lion One Metals Limited  and Thunderstruck Resources Ltd., two companies at opposite ends of the spectrum.

Thunderstruck Resources is an early stage exploration company with an extensive portfolio of properties on Viti Levu, the main island of Fiji. The company is conducting exploration activities at its large land package—covering 4% of Viti Levu—of “100% owned high grade zinc, copper and gold assets,” it reported in mid-May. According to Thunderstuck, it is “building on extensive prior results that point to the potential for large mineralized systems.”

At the end of May, Thunderstruck closed an oversubscribed private placement, raising over $200,000, selling 2.2 million units at $0.09 each. Each unit contained one common share and one share purchase warrant, with the option to buy a common share for $0.15 until May 2021.

Lion One’s 100%-owned Tuvatu project is at a much more advanced stage and is on track to put into production Fiji’s next mine. The company just announced a US$40 million debt financing package to develop the mine and build a processing plant for its fully permitted project. The financing is with Sinosteel Equipment & Engineering Co. Ltd. and Baiyin International Investment Inc. Sinosteel will be the EPC (Engineering, Procurement and Construction) contractor for the project, and Baiyin will be the gold doré offtaker.

The agreement is for a five-year term at a 7.5% interest rate. There will be a principal holiday and capitalized interest for either the earlier of two years from first draw, or three months after achieving commercial production. There also will be a Net Smelter Return (NSR) royalty of 2.25% on the first 350,000 ounces of gold produced. There is also an option to increase the financing by US$10 million.

Analyst Derek Macpherson of Red Cloud Klondike Strike Inc. noted on June 4 that with the debt financing in place, Tuvatu construction is expected to ramp up and views this as “very positive.”

Macpherson also noted that the “PEA (2015) outlines initial capital investment (excluding working capital) for Tuvatu at US$48.6M. With exploitation permits in-hand and C$21.6M (US$16.6M) in cash, the company is well positioned to continue on the path to construction and production.”

Analyst Mike Niehuser of Scarsdale Equities wrote on June 6, “The PEA assumed modest capital costs and efficient mining of high-grade gold resources, resulting in significant cash flow, which may rapidly repay capital and fund mine development and additional exploration of prospective gold targets.”

Niehuser also stated, “We expect that Lion One will announce an updated capital cost budget that should be within expected variances of the PEA. It appears that the facility should be adequate to cover the construction and capital costs with cash on hand. The terms appear to be competitive and do not include hedging or prepayment fees. Lion One continues exploration activities for which we believe could be a long-lived mine.”

Scarsdale Equities maintains a Buy rating and a target price of CA$1.40 on Lion One, which is currently trading at around CA$0.63.

While Lion One has been securing financing for the project, it also has continued exploration activities. Following the release of an off-the-charts surface sample of 502 g/t gold over 0.70 meters in February, on June 7, the company announced that follow-up work has mapped “more than 20 previously undefined mineralized structures at the Jomaki-Ura Creek prospect areas and identified potential geological extensions on the main mineralized zones inside the Tuvatu Mining Lease.”

Stephen Mann, Lion One’s managing director, stated, “In the Tuvatu resource area, approximately half of the 40 veins identified to date have sufficient sample data from drilling to merit inclusion in a resource estimate. We’ve now identified more than 20 mineralized veins at surface in the Jomaki-Ura Creek area where strong multi-element anomalism suggests potential scale and signature comparable and possibly larger than the main resource area at Tuvatu.”

Lion One has about 102 million shares outstanding, 109 million fully diluted. Management owns 22% of the shares and Donald Smith & Co owns 14%, Franklin Precious Metals Fund 9.99% and JP Morgan Asset Management UK 6%.

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Construction to begin on Fiji gold mine

Acting Prime Minister and Minister for Industry, Trade and Tourism Faiyaz Koya breaks ground marking the beginning of the civil works on November 17, 2017. Photo: DEPTFO

Talebula Kate | The Fiji Times | November 18, 2017

TUVATU Gold Mines which was given mining license for 21 years beginning in 2014 had its ground breaking ceremony of its Mines processing plant civil works yesterday.

The beginning of the construction of the mill and processing plant is a positive sign, as it portrays the commitment of Tuvatu Gold Mine to produce to its full capacity by the second quarter of 2019.

This expansion work will contribute to the economy directly and indirectly in many forms such as the employment of the local community.

Acting Prime Minister and Minister for Industry, Trade and Tourism Faiyaz Siddiq Koya officiated at the event.

$100 Million Invested Into New Tuvatu Gold Mine: Lion One

Lusiana Banuve | Fiji Sun | 19 November 2017

A gold mining company in Sabeto, Northeast of Nadi International Airport, says it has invested over $100 million in projects leading up to its new operations opening this weekend.

And Minister for Trade, Industry, Tourism, Lands and Mineral Resources Faiyaz Koya has congratulated the Lion One Ltd Mines for their ongoing belief in the government of the day and the people of Fiji.

Mr Koya, the acting prime minister,  said :

“Finances committed by the company to date has amounted to approximately $100 million in various forms of operations such as the exploration work, mine preparatory plans, environmental management measures and of course contributing to the economy through employment of its skilled Fijian workforce.

“Currently the company employs 50 locals and about 3 expatriates and this will surely increase in the near future.” Mr Koya said.

The Minister said the new employment business opportunities would go well for the people of Sabeto and particularly acknowledged the landowners and the people.

“I would like to acknowledge the support given by the 20 mataqalis whose land is the centre of this exploration and mining works.

“To all the Turaga ni Mataqali, thank you and vinaka vakalevu for your continued support and belief.

“Your unwavering commitment is truly commendable and I am certain that today’s ground breaking ceremony will benefit your communities in many, many ways.

“Not only for this generation, but for generations to come.” Mr Koya said.

“This work will open up the Sabeto corridor, bringing in the much needed business in the area.

“This is one of the plans of the Fiji First government, in which the decentralisation of services and business is encouraged for rural communities.

“Consequent to this, will be the improvement of health and educational facilities, infrastructure and business which will boost the economy and the livelihoods of these Sabeto communities,” he said.

For a relatively new company, Mr Koya commended Lion One Ltd Mines for its vision and determination.

“In January 2016, our Honourable Prime Minister issued Lion One Tuvatu, its Special Mining Lease.

“This was a 21 years surface lease which commenced from May 2014 and it is evident how the company has forged ahead in meeting its exploration targets, now advancing into the next stage of finalising its deposits for mine production,” he said.

The Miinster also urged everyone present to continue looking after the environment even while business investors grew.

“With the Honourable Prime Minister leading the global charge to combat climate change by taking up the Presidency of COP 23 and this being the first time ever in the history of Fiji, we have a monumental task.

“We must get behind our Prime Minister and ensure we tell the world that we are doing our part, despite being the smallest contributors to global warming.

“And yes, we would not wish to see that day when we are not able to breathe fresh air or drink clean water, things we take for granted in Fiji.

“Thus, I urge you all to work together in protecting our environment and learn our lessons from previous climate events, to help us build resilience and promote a culture of caring and protection what surrounds us – our environment, our beautiful country and the world,” he said.

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