Tag Archives: Thunderstruck Resources

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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Drilling programs to increase mining activity in Fiji

Aqela Susu | The Fiji Times | March 14, 2018

Minister for Lands and Mineral Resources Faiyaz Koya says five extensive drilling programs have been proposed by local mining companies which will increase exploration activities.

In his ministerial statement to Parliament on Monday, Mr Koya confirmed the five companies are Thunderstruck Company in Serua, Vatukoula Gold Mines Ltd in Vatukoula, Dome Mines on Ono Island in Kadavu, Kalo Exploration in Cirianiu and Matai Holdings Ltd at Udu Point on Vanua Levu.

“The Vatukoula Gold Mines Limited (VGML), our major gold-mining company, will continue to undertake mining exploration activities to ensure minable resources are available for its mining operation,” he said.

“The iron sand mining project for Ba delta is at its development state as the tenement holder Amex Resources Limited is currently developing its loading port facility in Lautoka at a total investment of $30 million (USD).

“Lion One Limited, as the holder of Tuvatu Mining lease, is also at its developing stages with late 2018 as a proposed date of production. The company is focusing on stabilising the site to set up its mine mill and is working with the ministry as well as other respective stakeholders to ensure mining commences as agreed.”

Mr Koya said the bauxite mining in the Northern Division was progressing well and in a sustainable fashion.

He also confirmed that mining operations at Nawailevu on Vanua Levu have ceased because of the exhaustion of bauxite ore on site.

“This mining licence to XINFA Aurum is currently under rehabilitation and is monitored by the ministry on a monthly basis.”

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Global Zinc shortage accelerates; Thunderstruck Resources to explore Zinc Project in Fiji

A ‘mining friendly’ government and heavy Chinese investment make Fiji an attractive destination for global speculators… 

Market Watch

The world’s largest zinc mines are shutting down, propelling the spot price of zinc to a three-year high of $2,400 per metric ton.

Global zinc consumption is growing 7% a year, catalysed by an automobile industry that requires zinc to protect steel components from rust and corrosion. Supply constraints could propel the metal even higher over the coming years.

This perfect storm of growing demand and shrinking supply is likely to benefit Thunderstruck Resources (AWE), which has a 100% interest in a portfolio of zinc, copper, gold and silver prospects located in the mining-friendly Republic of Fiji.

Fiji has recently transitioned to democracy, and China is continuing to invest heavily in infrastructure, cultural and mining projects in the country.

“Our technical team looked at hundreds of mineral properties around the globe,” says Bryce Bradley, Thunderstruck’s president and CEO, in an exclusive interview. “We had a very specific set of criteria. We rejected projects that were over-priced or incurred an unacceptable level of geological or political risk.”

Thunderstruck ended up with a portfolio of projects in Fiji that were drilled by Anglo America in the 1970’s. Thunderstruck has access to all of the drill data.

“We’re looking forward to a comprehensive drill program that will include confirming the high grade Anglo holes as well as conducting expansion drilling,” stated Bradley. “We’ll be following Anglo’s exploration success to determine the size of the deposits, and whether they have potential to be a mine.”

VMS deposits provide shareholders with exposure to an array of precious and base metal prospects with high grade intercepts of zinc, copper, gold and silver.

“The Fiji assets first landed on our plate about a year ago,” stated Bradley, “the properties were spectacular but the terms were too onerous. Finally, in July 2014 we reached an agreement, for less than 10% of the initial share issuance. It is a great deal for our shareholders.”

Thunderstruck will pay $600,000 and 1.5 million shares over three years for 100% of the assets.

Brien Lundin is a co-founder and director of Thunderstruck Resources. He runs the New Orleans Investment Conference which has featured influential speakers such as Ayn Rand, Margaret Thatcher and Alan Greenspan. Lundin also writes the influential Gold Newsletter. With 30 years’ experience as an analyst and metal investor, he has seen everything and done everything.

“Mr. Lundin is highly respected in the world of junior mining,” stated Bradley, “He is a co-founder and active board member who has been instrumental in choosing these particular assets, as he sees great potential in them.”

“We looked at a lot of projects before discovering this package of properties,” stated Lundin. “The Fiji assets are an interesting mix of ground-floor exploration and historic drilling. Thunderstruck has under license or application nearly 4% of the main island of Fiji. The beauty of VMS systems is that multiple metals can be found in the same deposit. So they can function as single-deposit diversification investments.”

Thunderstruck has two main VMS prospects within 25 km of each other, Wainaleka and Nakoro. They could accommodate a mill in between them, and ore could potentially be shipped to smelters in China or Japan via the deep-water Port of Suva, Fiji’s capital city.

Anglo completed two diamond drill programs on both VMS projects in the 1970s, but metal prices at that time didn’t warrant further exploration. However, the core drilling returned significant VMS drill intercepts, including 12 meters of 12.7% zinc and 56 grams/tonne silver. The targets remain open in all directions.

Thunderstruck Resources has only 12.4 million shares outstanding, tightly held by loyal shareholders. Subject to financing, Bradley anticipates spending approximately $1 million in the next year to drill both VMS properties and combining all known data into a 3-D model providing a clear delineation of the current asset.

Bradley anticipates selling the zinc either to the Japanese or the Chinese, who have invested heavily in Fiji’s mines and infrastructure such as roads and hospitals. The Chinese recently purchased Fiji’s oldest and largest gold mine, Emperor, and has an interest in several others.

Thunderstruck is also preparing their highly prospective gold property at Liwa Creek for drilling, but will limit their exploration activity until the gold markets recover.

“It is very likely that we will partner with a Chinese entity somewhere down the road,” confirmed Bradley, ” China is buying a lot of zinc, and we are in a perfect position geologically, politically and geographically to feed that demand.”

Zinc stored in the London Metal Exchange’s warehouses is down 22% since the start of 2014, equivalent to only about 20 days of global production. If this trend continues, international investors will look to zinc explorers in mature mining districts, with good proximity to China.

“In the next 12 to 24 months we hope to have a resource,” stated Bradley, “which would have a significant impact on the valuation of Thunderstruck.”

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