Vancouver, B.C., February 14, 2011, Lion One Metals Limited (TSX-V: LIO) (FSE: LY1) (the “Company”) is pleased to announce exploration plans for 2011 for the Tuvatu High-Grade Gold Project (“Tuvatu” or the “Project”) located on the island of Viti Levu in the Fijian Islands. The project is located less than 20 kilometers and a half hour commute from the international airport in Nadi. High voltage power lines dissect the property.
The Tuvatu deposit is a very young (i.e. 4 to 5 million year), high grade, low sulphidation, epithermal deposit hosted in a volcanic-intrusive sequence within a postulated collapsed caldera setting. After the nearby Vatukoula Mine (Proven and Probable Mineral Reserves of 190,000 (0.4 Mt @ 15.2 g) and 490,000 oz Au (1.5 Mt @ 9.8 g/t) respectively and Measured, Indicated and Inferred Mineral Resources of 1.6 million (8.5 Mt @ 6.0 g/t Au), 1.4 million (5.0 Mt @ 8.7 g/t Au) and 1.3 million oz Au (4.7 Mt @ 8.6 g/t) respectively plus over 7 million ounces Au produced to date, Tuvatu is the largest known gold deposit in the Fijian Islands. In addition to epithermal mineralization, porphyry style mineralization is also evident on the property. In excess of US$23 million has been expended on the property to date by Lion One Metals and previous operators including Emperor Gold Mines.
A mineral resource estimate completed by Fred Brown, CPG, Pr.Sci.Nat., (independent Qualified Person) and disclosed in the report Technical Report and Resource Estimate on the Tuvatu Gold Property, Viti Levu, Fiji, by P&E Mining Consultants Inc. dated October 1, 2010, reported Indicated Mineral Resources of 172,000 oz. Au (760,000 tonnes @ 7.05 g/t Au) and Inferred Resources of 480,000 oz. Au (2,618,000 tonnes @ 5.71 g/t Au), at 2.00 g/t Au cut-off. Approximately 60,000 meters of core remain in storage onsite at Tuvatu.
PHASE I EXPLORATION PROGRAM
Cambria Geosciences (“Cambria”) of Vancouver BC has been contracted to assist in managing the program at Tuvatu on behalf of the Company and mobilized a field team to the site on January 15th to initiate a program of surface mapping, trenching and core re-logging and re-sampling of 7,500 to 10,000 meters of the total 60,000 meters of core. This first phase field program will focus on both new and previously identified targets recognized during management’s and Cambria’s comprehensive review of historic data that began in August 2010. In addition to several high-grade grade targets identified at depth and along strike from the existing lodes that comprise the existing resource base, this review, along with ongoing mapping and prospecting programs conducted by our local geologists, resulted in the discovery of several near surface drill targets that are the focus of the current trenching and surface mapping programs. This 1,000 meter trenching program was commissioned to test the surface expressions of the Tuvatu Lode and the Core Shed Fault; zones that Management believes are potentially amenable to surface mining methods. A 1,500 to 2,000 meter first phase drill program consisting of several 100 to 200 meter diamond drill holes is expected to commence in late March, near the end of the local wet season. The first batch of samples from the trenching program has been forwarded to ALS Chemex Laboratories in Brisbane, Queensland for analysis. Results are pending.
In addition to the ongoing program of mapping, core re-logging and re-sampling, trenching and diamond drilling, this first phase exploration program will also include reconnaissance mapping, prospecting, high energy stream sediment sampling, geophysical surveying, deposit modeling and dewatering of the decline that was constructed by Emperor to conduct underground exploration and test the mining of the veins previously identified.. An environmental baseline study has been initiated and permit applications have been submitted with the Mineral Resource Department and the Environmental Review Agency of Fiji to initiate the dewatering process. Dewatering is expected to commence in April. Management believes that access to the decline is fundamental in understanding the controls on mineralization within the individual lodes that comprise the deposit.
Discovered in 1987, the Tuvatu gold deposit was “fast-tracked” to development in the late 1990’s by the Emperor Gold Mining Company as an additional source of high-grade feed for its mill at its nearby Vatukoula Mine. Over US$20 million in expenditures were incurred in the initial exploration and development of the deposit. By mid-2000, work completed included over 80,000 meters of drilling (60,000 meters of core and over 20,000 meters of reverse circulation), completion of a 1,630 meter decline, bulk sampling and test mining, metallurgical testing, reserve and resource estimation, mine design and optimization, and completion of a feasibility study (FS or historical feasibility study) in conjunction with Bateman Engineering. A preliminary mine plan was developed based upon production of 80,000 oz. Au per annum at a rate of 400,000 tonnes per annum, with overall operating cost estimates of A$67.81 (US$37.47) per tonne or A$317.91 (US$185.02) per oz. (based on year 2000 average conversion rates of US$0.582 to A$1.00 and average gold prices of US$279.11 or A$480.06). The FS concluded that the project was profitable, even at what was then a challenging economic environment for commodities. Further deterioration of gold prices however, led to the project being placed into care and maintenance in late 2000.
Underground development on the Tuvatu deposit began as part of the FS in 1997 with the excavation of the decline accessing over eighteen mineralized structures to a depth of 240 meters below surface. Information gained from excavation of the decline and the drilling program led to the completion of a reserve and resource estimate prepared in accordance with then current, AusIMM, JORC-code. Mineral reserves and resources at that time totaled: Probable Reserves of 269,000 oz. Au (1,262,000 tonnes @ 6.63 g/t Au), Indicated Resources of 289,000 oz. Au (1,065,000 tonnes @ 8.45 g/t Au) and Inferred Resources of 251,000 oz. Au (757,000 tonnes @ 10.31 g/t Au) (resources inclusive of reserves). This historic resource was reported based on seventeen mineralized lodes and three stockwork zones, using a cutoff grade of 3 g/t Au. No oxidized material was reported, with capping values ranging between 8.7 g/t and 121.7 g/t applied on an individual lode basis.
Please note that the above historical mineral estimate should not be relied upon as a qualified person has not completed sufficient work to classify the historical estimate as either a current mineral reserve or resource. The Company has included the information from the historical feasibility study for information purposes only and does not imply that economic viability of the project has been established.
ADVANTAGES & OPPORTUNITIES
The Tuvatu Deposit lies along the Viti Levu trend, 35 kilometers from the Vatakuola Deposit, one of the first “world class” epithermal deposits identified in the Pacific Rim. Both deposits are hosted in postulated collapsed caldera structures in similar suites of rocks with similar ages attributed to the mineralizing events. Metallurgical studies completed to support the Emperor Feasibility Study concluded that a gravity circuit followed by conventional flotation would yield gold recoveries in excess of 90%.
Lion One Metals management believes that possessing an established high-grade mineral resource supported by information and data gained from over US$23 million in exploration and development expenditures provides it with a unique opportunity to create value and opportunities for all stakeholders. Having the advantage of record or near record high commodity prices has allowed the Lion One technical team to reconsider the constraints formerly placed on the deposit and reassess its economic potential. In particular, management believes the tasks being completed during the first phase of exploration, including surface mapping, re-sampling and re-assaying not just for gold but also for copper and silver, re-logging of significant intervals within the over 60,000 meters of drill core and the re-mapping of the mineralized zones exposed in the decline, will lead to a significantly better understanding of structural and other geological controls on the mineralization. Management believes that this program will also help target other areas and styles of mineralization, including those commonly associated with copper-gold porphyry and VMS systems. Better understanding of the deposit model and the opportunity to reduce cut-off grades will not only further refine and expand the established underground resources but also allow for the assessment of the near surface mineralization that may be amenable to open pit mining methods.
The company also announces that its shares have begun trading on the Second Quotation Board (Open Market) of the Frankfurt Stock Exchange under the trading symbol LY1.
Darcy Krohman, P.Geo, C.A., CFO and VP Exploration for the Company and a Qualified Person pursuant to National Instrument 43-101, has reviewed the technical information in this news release.
ON BEHALF OF THE BOARD OF DIRECTORS
Walter H. Berukoff, Chairman
This press release may contain “forward-looking information” within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein are forward looking information. Generally, forward-looking information may be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “proposed”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. This forward-looking information reflects Lion One Metals Limited’s current beliefs and is based on information currently available to Lion One Metals Limited and on assumptions Lion One Metals Limited believes are reasonable. These assumptions include, but are not limited to, the actual results of exploration projects being equivalent to or better than estimated results in technical reports, assessment reports, other geological reports or prior exploration results. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Lion One Metals Limited or its subsidiaries to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: the early stage development of Lion One Metals Limited, general business, economic, competitive, political and social uncertainties; the actual results of current research and development or operational activities; competition; uncertainty as to patent applications and intellectual property rights; product liability and lack of insurance; delay or failure to receive board or regulatory approvals; changes in legislation, including environmental legislation, affecting mining, timing and availability of external financing on acceptable terms; not realizing on the potential benefits of technology; conclusions of economic evaluations; and lack of qualified, skilled labor or loss of key individuals. Although Lion One Metals Limited has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. Lion One Metals Limited does not undertake to update any forward-looking information, except in accordance with applicable securities laws.