Lion One Metals Ltd. [LIO-TSXV; LOMLF-OTCQX; LLO-ASX] has raised $11.5 million from a brokered private placement of 14.4 million units at 80 cents per unit, with proceeds earmarked for the company’s 100%-owned Tuvatu Alkaline Gold Project in the South Pacific Island of Fiji.
The announcement came after the close of trading on December 6, 2019. On Monday, Lion One shares advanced on the news, rising 11.2% or 11 cents to $1.09. The shares are currently trading in a 52-week range of 35 cents and $1.13.
The Tuvatu Project is located 24 km northeast of the town of Nadi on the island of Viti Levu, in the Republic of Fiji. It is a large gold-bearing vein system that lies at elevations of 100 to 600 metres in the southern reaches of the Navilawa Volcano, overlooking the Sabeto River Valley.
Gold mineralization is predominantly hosted in monzonite (alkaline granite-like rocks) but also occurs in adjacent volcanics
According to a June, 2014, estimate, the project hosts an indicated resource of 1.1 million tonnes at 8.46 g/t gold or 299,500 ounces. On top of that is an inferred resource of 1.5 million tonnes at 9.70 g/t gold or 468,000 ounces.
Lion One holds a 13,619-hectare exploration license package covering the entire Nailawa volcano, with the Tuvatu mining lease at its centre. The company has said the project is fully permitted for construction, mining and processing, with a 5% government royalty and 3% export tax.
Access to the mineralization at Tuvatu will be made from two declines from surface and internal declines, with two ventilation raises to surface. It said the primary planned mining method is shrinkage stoping with limited breast stoping for flat-dipping lodes.
Under the terms of the private placement, each of the 14.4 million issued units consists of one common share and one common share purchase warrant. Each warrant will entitle the holder to purchase one additional common share at a price of $1.20 any time until June 6, 2021, subject to an accelerated expiry option whereby the company can trigger an accelerated 30-day expiry of the warrants if the closing price of the common shares remains equal to or higher than $1.65 for 20 consecutive trading days.
On the 20th consecutive trading day above $1.65 (the acceleration trigger date), the warrant expiry date may be accelerated to 30 trading days after the company has issued a news release announcing any such acceleration within two days of the acceleration trigger date.
Lion One CEO Walter Berukoff leads an experienced team of explorers and mine builders. He is the founder and former CEO of Miramar Mines, Northern Orion and La Mancha Resources
Tuvatu is one of several epithermal gold systems associated with alkaline rocks along the northeast trending Vit Levu Lineament, Fiji’s own 250-kilometre long gold corridor. A number of gold deposits have been discovered along this trend, including Tuvatu, Vatukoula and Raki Raki. The Vatukoula or Emperor Mine has produced over seven million ounces of gold since 1937.
Lion One has said it envisages production based on a 600 tonne-per-day carbon-in-leach operation yielding recoveries of 86% with up to 40% of the gold being recovered through a gravity circuit.
The company is focused on building production of 100,000 ounces per year over 10 years.