Lion One moves permitting forward in Fiji

Fiji’s Department of Environment has approved two key permits for Lion One Metals’ (TSXV: LIO) high-grade Tuvatu gold project, 50 km south of Vatukoula, the country’s oldest operating mine.

By green-lighting the project’s construction and operation environment management plan, Lion One can develop a processing plant and build a mine underground or from surface, as well as on-site roads and infrastructure, tailings, pipelines and water-management facilities. Late last year, the government approved Tuvatu’s environmental impact assessment.

In May 2014 the company also signed a 21-year surface lease agreement with Fiji’s iTaukei Land Trust Board. The agreement was reached after nearly three years and more than 200 consultations and meetings with local communities and landowners.

Lion One’s wholly owned Tuvatu gold deposit near Nadi on the Fijian island of Viti Levu is 15 km from the Nadi International Airport and 35 km along trend from Vatukoula, which has produced an estimated 7 million oz. gold over 75 years.

The mine is owned by Vatukoula Gold Mines (AIM: VGM) and its largest shareholder is China’s Zhongrun International Mining Co. In May the Vatukoula  said it would delist and become a private company.

Both Tuvatu and Vatukoula are low-sulphidation epithermal gold deposits related to alkalic volcanic intrusive complexes. Vatukoula produced 19,100 oz. gold in the first half.

Lion One is undertaking additional studies, including two independent processing plant studies, a mine plan and development study, as well as geotechnical studies for a tailings dam facility and processing plant. All the studies is expected to wrap up by December.

In June, Lion Ore updated the resource estimate for Tuvatu, increasing indicated resources by 90% and inferred resources by 31% from the 2010 estimate. Indicated resources now stand at 1.1 million tonnes grading 8.46 grams gold per tonne for 299,500 contained oz. gold, and inferred resources of 1.51 million tonnes grading 9.67 grams gold per tonne for 468,000 contained oz. gold. The updated resource is based on a 3-gram-gold-per-tonne cut-off grade, and most of the resource lies within 200 metres of surface.

Lion One says a “high proportion” of the deposit’s gold mineralization occurs as either free gold amenable to gravity processing, or is contained in quartz or pyrite composite particles that can be extracted by simple flotation and leaching. The free gold is both fine and coarse grained.

The deposit is hosted in a sequence of volcanic units intruded by a monzonite intrusive complex, with the gold mineralization dominantly hosted in the monzonite units, but also in the nearby volcanics.

Lion One merged with Avocet Resources in June 2013 and is focused on gold, iron ore and uranium projects in Fiji, Australia and Argentina. North Vancouver stock promoter Walter H. Berukoff founded Lion One, and is the company’s CEO and chairman of the board.

Before setting up Lion One, Berukoff founded two junior mining companies: Miramar Mining and Northern Orion Resources. Both companies were acquired by majors after Berukoff left. Newmont Mining (NYSE: NEM) bought Miramar in 2007 for $1.5 billion and Yamana Gold (TSX: YRI; NYSE: AUY; LSE; YAU) acquired Northern Orion the same year for $1.1 billion, as part of a three-way merger with Meridian Gold.

In addition to Tuvatu, Lion One holds two prospecting licences on the Fijian island of Vanua Levu; joint ventures on gold and uranium projects in Argentina’s Chubut province; and is advancing its Olary Creek iron project with joint-venture partner Henan Yukuang of China in South Australia.

Olary Creek is situated on the Braemar iron formation, 70 km southwest of Broken Hill, and has indicated resources of 214 million tonnes grading 26.3% iron and an inferred resource of 296 million tonnes averaging 26.4% iron.

Joint-venture partner Henan Yukuang is a subsidiary of Henan Yukuang Resources Development Co. in the Chinese city of Zhengzhou. Henan Yukuang International holds mineral rights in over 140 gold, silver, copper, niobium-tantalum, antimony and molybdenum projects in 20 countries.