LION One Metals has signed an MoU with Ansteel-CapitalAsia Global Engineering for ongoing development of the Tuvatu Gold Project in Fiji. The MoU covers an engineering, procurement and construction (EPC) contract for a processing plant and a vendor financing agreement.

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Drilling at Lion One Metals’ Tuvatu Gold Project on the Fijian island of Viti Levu.

The contract includes the design, construction, start-up testing and commissioning of the plant. Ansteel will furnish all materials, equipment, machinery, tools and consumables, provide quality control and administration, and will develop the Health and Safety Plan.

It will also provide vendor financing for up to 80% of the anticipated value of the contract in the form of a deferred payment amount of US$39 million to $44 million. Lion One will fund a minimum of US$10 million, or approximately 20% of the anticipated value of the EPC contract.

Ansteel-CapitalAsia Global Engineering is a JV company of Ansteel Group Engineering Technology Development Company and CapitalAsia Consulting (Canada) Inc. The Ansteel Group is based in Liaoning Province, northern China.

Tuvatu is 17km from Nadi International Airport on the main island of Viti Levu. Lion One envisages a low-cost underground mining operation producing 352,931 ounces of gold at head grades of 11.30 g/t over an initial 7-year mine life, including 262,000 ounces at 15.30 g/t through year three, at cash costs of US$567 per ounce and AISC of US$779 per ounce.

Total capex of US$48.6 million includes a contingency of US$6.1 million with an 18 month pre-production schedule and 18 month payback on capital. At a US$1200 gold price the project generates net cash flow of US$112.66 million and an IRR of 52% (after tax).

Drilling, dewatering and development are ongoing with the drill program including infill and extensional targets. One surface drill rig is operating and an underground rig is ready to be mobilised as dewatering of the decline progresses.

Initial infill drilling results include 71.41 g/t gold over 8.41 metres, including 126.67 g/t over 4.56 metres, drilled from surface to a vertical depth of 92 metres. The results confirm the high grades and continuity of near-surface mineralisation.

The decline was developed during a previous feasibility study and consists of 1341 metres of decline, strike and rise development to a depth of 240 metres below surface. It can accommodate 15-tonne trucks and provides access to mineralisation targeted for extraction in years 1-3 of the mine plan.

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