Mr. Walter Berukoff reports
LION ONE ANNOUNCES HIGH GRADE HIGHLIGHTS OF ITS FULLY PERMITTED TUVATU GOLD PROJECT IN FIJI
Lion One Metals Ltd. has added a new investor presentation entitled, "High Grade Highlights," to the investor relations section of its website. The presentation references results from feasibility-level work done at the company's 100-per-cent-owned Tuvatu gold project in Fiji by prior owner Emperor Gold Mining, in particular the results of extensive underground sampling.
About Tuvatu
Tuvatu is a fully permitted, high-grade, low-cost, underground gold project located in one of western Fiji's largest volcanic goldfields. Tuvatu is an epithermal vein system with estimated National Instrument 43-101 resources of 1,101,000 tonnes indicated at 8.46 grams per tonne gold containing 299,500 ounces Au, and 1,506,000 tonnes inferred at 9.67 g/t Au containing 468,000 ounces Au, at a 3.0 g/t cut-off. In 2015 the company announced a preliminary economic assessment outlining a potential 6.16-year mine plan based on the production of 352,931 ounces Au at a head grade of 11.3 g/t Au, at cash costs of $567 (U.S.) per ounce. At a gold price of $1,200 (U.S.), the project delivers an after-tax internal rate of return of 52 per cent, with a $48.6-million (U.S.) capex and 1.5-year payback on capital. The economic results disclosed herein are based on the report entitled, "Preliminary Economics Assessment (PEA) NI 43-101 Technical Report on the Tuvatu Gold Project, Fiji," prepared by Canenco Ltd., AMC Consultants Pty. Ltd., Knight Piesold and Mining Associates Pty. Ltd. This technical report is available for viewing on the Lion One and SEDAR websites.
Tuvatu exhibits bonanza grades near surface, at depth and on other prospects inside its mining lease.
Highlights include:
- Near surface: 290.60 g/t Au over 2.35 metres from underground channel sampling at vertical depth of 80 m;
- At depth: 252.64 g/t over 4.22 m from diamond drill hole DDH 160 at vertical depth of 324 m;
- Other prospects: 293.50 g/t over 0.15 m from channel sampling at Nubunidike one kilometre from Tuvatu.
The new presentation includes a level plan with channel samples of the near-surface Nasivi zone of the Tuvatu underground, located approximately 250 m inside the decline, at a vertical depth of 80 m from surface. Mineralization in the Nasivi zone is one of the first areas scheduled for production under the Lion One 2015 PEA potential mine plan. Previous operator Emperor Gold Mining conducted channel sampling and geological mapping in the Nasivi zone, including the collection of 166 rib channel samples with an average width of 2.81 m, taken on two-metre spacings, for a total of 466 m of sampling within a 160 m section of the decline. This sampling work demonstrated continuity of grade and mineralization, with the highest-grade samples summarized in the attached table.
SELECT UNCAPPED SAMPLES FROM NASIVI ZONE OF TUVATU UNDERGROUND
Greater than 100 g/t
10-20 g/t Au 20-40 g/t Au 40-100 g/t Au Au
Metres Au g/t Metres Au g/t Metres Au g/t Metres Au g/t
2.70 16.23 2.10 33.10 2.40 74.89 3.60 109.19
1.80 17.31 2.52 33.16 3.30 79.47 3.10 116.32
3.45 17.48 3.50 33.21 3.40 79.37 2.95 118.41
2.50 18.06 3.00 35.50 3.00 83.85 2.50 122.65
1.90 18.18 2.70 35.68 3.45 84.83 2.80 203.59
3.25 19.09 3.00 36.04 2.95 92.48 2.35 290.60
Deep drilling also conducted by Emperor demonstrated down dip continuity of mineralized zones, with high-grade intercepts up to 400 metres vertical depth below surface. Holes 160 and 176 were drilled from opposite sides of the main zones and were angled to intercept the zones at roughly the same depth. Multiple high-grade intercepts were reported by each hole. A cross-section showing the trace of the two holes in relation to the decline is included in the technical presentation on the Lion One website.
HIGHLIGHTS OF DDH 160 AND 176 (1)
DDH 160 highlights DDH 176 highlights
Interval Grade From To Interval Grade From To
(m) (g/t Au) (m) (m) (m) (g/t Au) (m) (m)
4.22 252.64 332.00 336.22 2.40 22.41 436.60 439.00
includes includes
0.50 8.25 332.00 332.50 0.45 116.00 437.35 437.80
0.80 7.45 332.50 333.30 0.50 2.97 437.80 438.30
0.86 96.00 333.30 334.16
0.99 167.00 334.16 335.15 4.15 17.47 495.00 499.15
0.50 1,614.00 335.15 335.65 includes
4.12 19.61 403.20 407.32 0.75 20.50 496.00 496.75
includes 0.50 46.80 496.75 497.25
0.95 8.96 403.20 404.15 0.80 27.00 497.25 498.05
0.35 15.33 404.15 404.50 0.70 16.85 498.05 498.75
0.45 15.48 404.50 404.95
0.78 20.50 404.95 405.73
0.50 25.00 405.73 406.23
0.64 29.50 406.23 406.87
0.45 28.00 406.87 407.32
2.00 37.82 416.50 418.50
includes
0.67 7.62 417.10 417.77
0.50 141.00 418.00 418.50
(1) Drill hole assays are uncapped.
Chief executive officer comment
Lion One CEO Walter Berukoff commented: "We are actively reviewing the best opportunities to take the project into production. We are fully permitted for development, construction and production by the mineral resource department and the government of Fiji, and have paid a $2.7-million (Fijian) environmental bond and $700,000 (Fijian) surface lease payment. We believe Tuvatu's highly prospective setting in the South Pacific Ring of Fire is an ideal location to build up a highly profitable mining operation and aggressive resource expansion program. In my experience this represents a rare and compelling opportunity to create substantial value for our shareholders and stakeholders."
The recent increase in gold prices created renewed and heightened interest from third parties wanting to assist Lion One in moving Tuvatu forward. Lion One is in discussions with several financing groups currently undertaking due diligence. The company expects a variety of financing options for potential mine development and construction will be presented to it when these discussions and investigations are completed. While the company cannot guarantee an arrangement will be made with the parties currently negotiating, it expects these discussions to be productive. Any material financing agreement will be announced to shareholders as soon as details are available.
Historic Tuvatu drill highlights
HIGHEST-GRADE DRILL INTERCEPTS TO DATE (UNCAPPED)
Hole ID Sample No. From To Au Interval
(m) (m) (g/t) (m)
TUDDH-160 TU122462 335.15 335.65 1,614 0.50
TUDDH-100 TU120810 254.50 255.00 1,185 0.50
TUDDH-348 TS3917 161.37 161.54 855 0.17
TUDDH-045 TU112546 114.00 114.50 463 0.50
TUG-013 TUG565 41.50 41.90 430 0.40
TUG-1849 TUG1852 1.70 2.10 346 0.40
TUG-056 TUG2665 103.60 104.00 334 0.40
TUG-112RO TUG113 1.50 1.70 295 0.20
TUDDH-045 TU112547 114.50 115.00 283 0.50
TUDDH-013 WKK11415 34.00 34.05 271 0.05
TUG-051 TUG2586 34.95 35.45 270 0.50
TUDDH-347 TS3606 124.04 124.13 248 0.09
TUG-062 TUG4558 56.90 57.20 209 0.30
TUG-067 TUG4472 66.35 67.20 193 0.85
TUG-327 TUG329 1.60 1.85 177 0.25
TUG-079 TUG3991 62.50 63.15 174 0.65
TUG-058 TUG4366 100.85 101.35 170 0.50
TUDDH-160 TU122461 334.16 335.15 167 0.99
TUG-099 TUG5608 57.95 58.48 167 0.53
TUDDH-057 TU113289 121.60 121.80 164 0.20
TUG-013 TUG560 34.90 35.55 156 0.65
TUG-008 TUG10 3.40 3.80 155 0.40
TURC-174 TURC143175 54.00 55.00 155 1.00
TURC-174 TURC143174 53.00 54.00 152 1.00
TUDDH-076 TU14392 211.50 212.15 150 0.65
TUDDH-160 TU122500 418.00 418.50 141 0.50
TUDDH-228 TU149537 209.76 210.26 141 0.50
TUG-005 TU142477 28.80 29.10 136 0.30
TUG-001 TU142022 37.75 38.35 133 0.60
TUDDH-207 TU144019 307.10 307.60 125 0.50
TUG-087 TUG5503 7.63 7.73 121 0.10
The company advises that it has not based a production decision on a feasibility study of mineral reserves demonstrating economic and technical viability, and, as a result, there may be an increased uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery, including increased risks associated with developing a commercially mineable deposit. Historically, such projects have a much higher risk of economic and technical failure. There is no guarantee that production will begin as anticipated or at all, or that anticipated production costs will be achieved. Failure to commence production would have a material adverse impact on the company's ability to generate revenue and cash flow to finance operations. Failure to achieve the anticipated production costs would have a material adverse impact on the company's cash flow and future profitability.
The company further cautions that the Tuvatu PEA is preliminary in nature. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that the Tuvatu PEA will be realized.
Quality assurance/quality control
Assay analyses performed for Lion One's drilling programs were subjected to formal quality assurance and quality control (QA/QC) programs, and overseen by Stephen Mann, PGeo, and managing director of the company. Diamond drill core was logged and sampled on site at Tuvatu by company staff, with samples delivered by the company to the facilities of Australian Laboratory Services (ALS) Pty. Ltd., an independent accredited analytical laboratory. Samples were first prepared and crushed at the ALS facility in Suva, Fiji, before being shipped to Brisbane, Australia, for assay analysis. Samples were subjected to fire assay with atomic absorption finish for gold and 33 elements, four acids, and inductively coupled plasma spectrometry (ICP-AES). Standard reference materials, blanks and field duplicate samples were inserted prior to shipment from site to monitor the quality control of the data. Samples with higher-grade gold (greater than three grams per tonne) were reassayed using a gravimetric and/or pulps and metallic procedure.
Qualified persons
The technical information contained in this news release is based upon information prepared by Ian Taylor, BSc (honours), MAusIMM (CP), of Mining Associates Pty. Ltd., and David Lee, principal mining engineer at AMC Consultants Pty. Ltd.
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. 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 mineralization 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 confirms that historic analytical work completed at Tuvatu was conducted by reputable companies and laboratories, and conformed to industry standards at the time, indicating that the historical assays can be used with a reasonable degree of confidence. 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 affect 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.
Robert McLeod, PGeo, consultant to the company and qualified person as defined by National Instrument 43-101, has reviewed and approved the technical content of this release.
For more information on Tuvatu, the NI 43-101 technical reports entitled "Independent Technical Report and Resource Estimate on the Tuvatu Gold Deposit," dated May 6, 2014, prepared by Mining Associates Pty. Ltd., and the NI 43-101 PEA technical report entitled, "Tuvatu Gold Project PEA," dated July 14, 2015, are available for download on the company website and SEDAR website.
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