Lion One raising $27 million for Fijian gold project

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Lion One Metals Ltd. [LIO-TSXV, LOMLF-OTCQX, LLO-ASX] said Wednesday it is raising $27 million from a bought deal financing with proceeds earmarked for the company’s 100%-owned Tuvatu Alkaline Gold Project in the South Pacific Island of Fiji. Back in early April, 2023, the company said it commenced high grade gold mining at Tuvatu.

Lion One said it has struck a deal with underwriters who have pledged to purchase on a bought deal basis 29.35 million units of the company at 92 cents per unit. Each unit will consist of one common share and one-half of one common share purchase warrant. Each warrant can be used to acquire one common share for $1.25 for up to 30 months from the date of closing of the offering.

However, the expiry date can be accelerated if the volume weighted average trading price of the shares equals or exceeds $2.00 for any 20 consecutive trading days after the closing date of the offering.

The underwriters have been handed a green shoe option to purchase up to an additional 15% of the units sold in the offering. That option can be exercised for a period of 30 days after the closing date of the offering, which is expected to be May 11, 2023.

On May 3, 2023, Lion One shares closed at $1.05. The shares are currently trading in a 52-week range of $1.66 and 59 cents.

The Tuvatu project is located 24 kilometres northeast of the town of Nadi on the island of Viti Levu, in the Republic of Fiji. It is a large gold-bearing vein system that lies at elevations of 100 to 600 metres in the southern reaches of the Navilawa Volcano, overlooking the Sabeto River Valley.

Gold mineralization is predominantly hosted in monzonite (alkaline granite-like rocks) but also occurs in adjacent volcanics

According to a June, 2014, estimate, the project hosts an indicated resource of 1.1 million tonnes at 8.46 g/t gold or 299,500 ounces. On top of that is an inferred resource of 1.5 million tonnes at 9.70 g/t gold or 468,000 ounces.

Lion One holds a 13,619-hectare exploration license package covering the entire Nailawa volcano, with the Tuvatu mining lease at its centre. The company has said the project is fully permitted for construction, mining and processing, with a 5% government royalty and 3% export tax.

Access to the mineralization at Tuvatu will be made from two declines from surface and internal declines, with two ventilation raises to surface. It said the primary planned mining method is shrinkage stoping with limited breast stoping for flat dipping lodes.

The company recently said initial mining of near-surface, high-grade gold bearing mineralization has commenced from a recently discovered mineralized lode. The company said 475 tonnes of material has been added to a mining inventory stockpile that will constitute initial feed for a processing facility that is currently under construction.

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