Resource World Magazine

FIEL D R E PORT Lion One seeking to develop Vatukoula lookalike in Fiji by David Duval The island of Viti Levu in Fiji is roughly the same size as the volcanically active Big Island in Hawaii. Unlike Hawaii, however, Fiji has some notable gold deposits, the largest being Vatukoula which has produced approximately 7 million ounces of gold and 2 million ounces of silver over a period of 70 years. In the vast shadow of the Vatukoula gold deposit and within the same favorable geological host belt lies the Tuvatu Gold Project of Lion One Metals Ltd. [LIO-TSXV] which was the subject of a feasibility study in the late 1990s by Emperor Gold Mines, in addition to numerous geological studies by various groups including the Japanese and United Nations. As a former consultant to the UN, I can attest to the fine work that organization has done on the minerals side, identifying gold and base metal deposits with economic potential throughout the developing world. Discovered in 1932, with small scale production achieved during the initial gold rush, Emperor assumed full control of Tuvatu in 1958 and was responsible for the resource drilling and subsequent underground development which is quite extensive. If the portal entrance is any indication, Emperor obviously knew what it was doing. Constructed from reinforced concrete, the entrance way was rock-bolted and shotcreted and showed no signs of deterioration after more than two decades. HQ drill core, being logged by Fijian geologists when I visited the site, was extremely competent (unbroken), suggesting good ground conditions which will serve to reduce mining dilution. By mid-2000, work completed at Tuvatu included over 80,000 metres of drilling (60,000 metres core and over 20,000 56 www.resourceworld.com metres reverse circulation), completion of a 1,630-metre decline and cross-cuts, bulk sampling and test mining, metallurgical testing, reserve and resource estimation, underground mine design and optimization, and completion of a feasibility study in conjunction with Bateman Engineering. A preliminary mine plan was developed based upon a production rate of 400,000 tonnes of ore and output of 80,000 ounces of gold per annum. In 2000, capital and operating costs were projected to total US $21 million and US $185/oz gold. At the time of that study, gold was at historic lows, trading at US $279/oz. While the feasibility study concluded that the project was economically viable, further deterioration of gold prices led to the project being placed on care and maintenance in late 2000. Tuvatu shares a number of similarities to Vatukoula which is located 35 km to the northeast. Both are situated on the western margin of a caldera, a volcanic collapsed structure, and they appear to have similar metallogenesis and many common geological characteristics. Lion One's Tuvatu holdings cover approximately 105 km2 in the upper Sabeto Valley approximately 20 km and a half-hour road commute from the Nadi International Airport. Advanced exploration and development conducted by previous operators in the late 1990s and 2000 provide Lion One with an opportunity to capitalize on over $20 million in historic expenditures and infrastructure. The company completed a $15 million financing during a sweet spot in the market in 2011 and currently has a working capital of slightly under $15 million which it is managing prudently. The feasibility study completed by Diamond drilling a target at the advanced stage Tuvatu Gold Project of Lion One Metals on the Island of Viti Levu, Fiji. Photo courtesy Lion One Metals Ltd. Emperor and Bateman examined the viability of starting a mining operation in the Tuvatu area which currently has an NI 43-101 compliant resource of 172,000 ounces gold in the indicated category, and 480,000 ounces in the inferred category at a cut-off grade of 2.00 g/t. Gold mineralization in the Tuvatu area occurs as sets and networks of narrow veins and fissures. The lodes vary in width from 0.5 to 5.0 metres with an average width of 1.6 metres. The individual lode structures can be traced for distances of 100 to 600 metres along strike with good continuity in all directions. High-grade, epithermal gold veins at Tuvatu occur along the margins of an eroded volcanic centre in a geologic environment that appears to have been subjected to multiple mineralizing events as porphyry-style DECEMBER 2012/JANUARY 2013

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