Source: Mike Niehuser
September 19, 2023 (Investorideas.com Newswire) This robust deposit on Fiji could grow into a multimillion-ounce gold resource, noted a ROTH Capital Partners report.
Lion One Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX; LLO:ASX) is on track to complete its first gold pour in Q4/23 at its Tuvatu project, which could become a "long-lived, high-grade, relatively low-cost underground mine," reported ROTH Capital Partners analyst Mike Niehuser in a September 11 research note.
As an alkaline gold system, this project on Fiji "has the potential to grow into a multimillion-ounce gold resource," Niehuser wrote. "In addition, given the proximity and numerous positive characteristics, Lion One's position in the Navilawa caldera could match or better Fiji's Vatukoula gold mine, with an 11,000,000-ounce (11 Moz) deposit and an 85-year operating history."
175% Gain Implied
As such, ROTH maintained its target price of CA$2.50 per share on the near-term producer, currently trading at about CA$0.91 per share, noted Niehuser.
The difference between these two prices implies a significant potential return for investors of 175%.
Lion One is a Buy.
Niehuser provided a loose timeline for Lion One's production increases at Tuvatu.
Currently, the Canadian company has nearly completed construction of the Tuvatu underground mine, is stockpiling ore, and is about to begin commissioning. It aims to start and maintain production there at 300 tons per day (300 tpd) over the first 18 months, then increase it to 500 tpd in mid-2025, Niehuser reported.
Lion One then could boost production further, thanks to successful exploration work, to about 1,000 tpd (1 Ktpd) in 2026 and 1.25 Ktpd in 2028.
"This will result in the cumulative production of approximately 1 Moz over ten years," Niehuser indicated.
Potential for Growth, Acquisition
Niehuser highlighted that while developing the mine, Lion One has found additional prospective structures that could ultimately expand the existing resource. These include the URA1 lode and 1 kilometer to the north of Tuvatu, the Lumuni vein outcrop, which has yet to be fully tested for mineralization.
Lion One did, however, recently complete 14 new CSAMT, or controlled source audio-frequency magnetotellurics, lines to supplement the previously performed surveys. Data from this effort are expected soon.
"Beyond Tuvatu, given exploration results on the existing mining concession and within the Navilawa caldera, we believe that there is the potential for an additional three to four Tuvatu-like prospects," added the analyst.
Also, Niehuser purported, in the future, the overall Tuvatu project and mine could become a potential takeout target, likely for a major gold producer.
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