Tuvatu Gold Project

Overview

Lion One is aggressively advancing its 100% owned Tuvatu Gold Project as a world class discovery and near-term production opportunity in the southwest Pacific Ring of Fire. Tuvatu is modeled for exploration after regional giants in the low sulphidation family of high grade epithermal gold deposits such as Porgera and Lihir in PNG, and Vatukoula in Fiji. These spectacular discoveries have produced over 35 million ounces of gold in similar alkaline volcanic settings. Tuvatu has been fully permitted by the Government of Fiji for operations startup and has a dual-track strategy of production development and resource expansion inside its 385 hectare mining lease.

Tuvatu is located 17 km from the international airport in Nadi, on the west coast of Viti Levu in the Republic of Fiji. Lion One’s CEO Walter Berukoff is leading an experienced team of mine builders, and has owned or operated over 20 mines in 7 countries.  As the founder and former CEO of Miramar Mines, Northern Orion, and La Mancha Resources, Walter is credited with building over $3 billion of value for shareholders.

Tuvatu was advanced by previous owners through underground exploration and development from 1997 through to the completion of a feasibility study in 2000.  Acquired by Lion One in 2011, the project has over 110,000 meters of drilling completed to date in addition to 1,430 meters of underground development.  In January 2016 the Hon. Prime Minister of Fiji, Mr. V. Bainimarama, formally presented the previously granted Tuvatu Mining Lease to Lion One.  This concluded the permitting process for the development of an underground gold mine and processing plant at Tuvatu, demonstrating strong government support for Fiji’s 85 year-old gold mining industry.

As per its independent June 1, 2015 NI 43-101 PEA Technical Report on the Tuvatu Gold Project, the Company envisages a low cost underground gold mining operation producing 352,931 ounces of gold at head grades of 11.30 g/t Au over an initial 7 year mine life.  This includes production of 262,000 ounces at 15.30 g/t through to the end of year three.  Estimated cash cost is US$567 per ounce with all-in sustaining cost of US$779 per ounce. Total capex of US$48.6 million includes a contingency of US$6.1 million with an 18 month preproduction schedule and 18 month payback on capital.  At a US$1,200 gold price, the project generates net cash flow of US$112.66 million and an IRR of 52% (after tax).  The Company is not basing its production decision on a feasibility study of mineral reserves demonstrating economic and technical viability; as a result there is increased uncertainty and economic and technical risks associated with its production decision

 


 

Economic Summary

Project Production Summary
Basis of Estimate

Total Material mined and processed

1,125,548 t (dry)
Average head grade
Contained gold in mined
Recovered gold
Average gold recovery
Production mine life
11.30 g/t Au
408,958 oz Au
352,931 oz Au
86.3%
6.16 years
Nominal production rate
Average annual production
219,00 t/y
182,802 t/y
57,320 oz Au/y

 

Project Cash Flow Summary
Project US$ Million US$/t* US$/ozAu**

Mine operating cost
Processing cost
Exploration costs
General & Administration cost
Smelting & Refining cost

86.11
49.33
1.73
21.94
0.85
76.50
43.83
1.53
19.49
0.75
243.98
139.78
4.89
62.16
2.40
Subtotal Cash Operating Cost
Royalties & Export Taxes
159.95
40.23
142.11
35.75
453.21
114.00
Total Cash Operating Cost 200.19 177.86 567.21
Revenue
Total Cash Cost
423.52
200.19
376.28
177.86
1,200.00
567.21
Operating Cash Flow (EBITDA) 223.33 198.42 632.79

*Basis is LOM tonnes
** Basis is recovered not contained ounces

 

Project Financial Measures Summary
Basis of Estimate

Revenue from gold (based on US$1,200/oz)
Total cash cost excluding royalties
Total cash cost (including royalties)
All-in cost

423.52 US$ M
453.21 US$ / oz Au
114.00 US$ / oz Au
778.60 US$ / oz Au
Capital expenditure (Life-of-Mine)
Initial capital investment (excl working capital)
Peak funding
Deferred and sustaining capital
Closure Cost
74.60 US$ M
48.60 US$ M
55.83 US$ M
25.10 US$ M
0.90 US$ M
Pre-Tax Economics
Free cash flow after cost all9cation (undiscounted)
Internal rate of return (IRR)
Project NPV (discounted at 5.0%)
Payback period
 

148.73 US$ M
67.1 %
116.99 US$ M
1.50 years

After-Tax Economics
Free cash flow after cost all9cation (undiscounted)
Internal rate of return (IRR)
Project NPV (discounted at 5.0%)
Payback period
 

112.54 US$ M
52.3%
86.54 US$ M
1.50 years

 


 

Project Milestones

  • February 14, 2017

    13.52 g/t Au over 9.07 m Drilled at Tuvatu

    World class results from infill drilling continue with 13.52 g/t Au intersected over 9.07 m from TUDDH 419, further confirming continuity and high grades.
  • December 21, 2016

    Dewatering of Tuvatu Underground

    Dewatering of Tuvatu underground continues with ventilation fans installed...
  • December 21, 2016

    24.54 g/t Au over 2.42 m Drilled at Tuvatu

    World class results from infill drilling continue with 24.54 g/t Au intersected over 2.42 m from TUDDH 410, further confirming continuity and high grades.
  • November 23, 2016

    70 g/t over 8.46 m Drilled at Tuvatu

    Initial drilling at Tuvatu returned world-class results of 71.41 g/t Au over 8.41 meters from infill drill hole TUDDH 406, including 126.67 g/t Au over 4.56 meters, drilled from surface to a vertical depth of 92 meters
  • November 1, 2016

    Dewatering & Development Starts

    Drilling, dewatering, and development commences at Tuvatu.
  • October 12, 2016

    Discovery inside Tuvatu SML 62

    A new discovery is underway at the Jomaki Ridge Prospect inside SML 62, 1,500 meters from the planned processing plant site at Tuvatu. Visible gold was encountered at surface with bonanza grades up to 125 g/t Au recovered from rock chip sampling...
  • October 12, 2016

    Navilawa Tenement Application

    Lion One has submitted its application with Fiji’s Mineral Resources Department for the new mineral tenement adjoining Tuvatu, to cover the remainder of Navilawa mineral complex under a +30,000 hectare exploration license with the Tuvatu Mining Lease and processing plant site at its center….
  • August 24, 2016

    Ansteel-CapitalAsia MOU Signed

    In August 2016 Lion One signed Memorandum of Understanding with Ansteel-CapitalAsia for an EPC Contract and US $44 million funding package for the development and construction of the Tuvatu Gold Project.
  • April 25, 2016

    High Grade Highlights

    Lion One showcases bonanza grades from the Tuvatu Gold Deposit and exploration prospects inside its mining lease. Highlights include: 290.60 g/t Au over 2.35m from underground channel sampling at 80m depth; 252.64 g/t over 4.22m from DDH 160 at vertical depth of 324m; 293.50 g/t over 0.15m from channel sampling 1,000m from Tuvatu
  • January 31, 2016

    Fiji PM Delivers Tuvatu Mining Lease

    Fiji Prime Minister Bainimarama presents the Tuvatu Mining Lease to Lion One management and speaks at the grant ceremony at Tuvatu Gold Project
  • June 1, 2015

    Preliminary Economic Assessment

    Robust economic potential of Tuvatu’s initial 7 year mine plan underscored in the 2015 NI 43-101 PEA technical report showcasing a pre-tax NPV5% of US$117 M and 52% IRR after tax at US$1,200 gold price, and low US$48.6 million capex.
  • March 23, 2015

    Tuvatu Mining Lease Approved

    Fiji’s Mineral Resources Department notifies Lion One that its application has been approved for Special Mining Lease (SML) 62 for the Tuvatu Gold Project.
  • October 22, 2014

    Dept. of Environment Approvals

    Lion One’s Environmental Management Plans for Construction and Operations at Tuvatu approved by Fiji’s Department of Environment.
  • October 6, 2014

    Knight Piesold Tailings Study

    Knight Piesold Tailings Study
  • September 29, 2014

    AMC Mining & Processing Studies

    Underground mining and capital cost study commences at Tuvatu.
  • June 4, 2014

    NI 43-101 Resource Estimate

    The high-grade gold resources of the Tuvatu Gold Project at a 3.0 g/t gold cut-off comprise 1,102,000 tonnes indicated at 8.46 g/t Au (300,000 oz. Au) and 1,506,000 tonnes inferred at 9.67 g/t Au (468,000 oz. Au)
  • May 22, 2014

    21 Year Surface Lease Agreement

    Lion One has entered into a 21-year Surface Lease agreement with the iTaueki Land Trust Board and local landowners at the Tuvatu Gold Project near Nadi in western Viti Levu.
  • February 14, 2014

    EIA Approved

    Fiji’s Department of Environment clears the Lion One’s Environmental Impact Assessment for Tuvatu advising that mining related activities can proceed.
  • February 14, 2014

    Mining Lease Application Filed

    Lion One files its Mining Lease application with the MRD .