In a Sept. 9 research note, Haywood Securities analyst Geordie Mark reported that the first drill results from Liberty Gold Corp.'s (LGD:TSX; LGDTF:OTCQB) Goldstrike in Utah bode well for the project.
They "demonstrate the potential to not only derisk the asset through migration to prefeasibility analysis but also the concurrent potential to grow the defined asset through the drilling campaign and potentially augment the value of this under-rated asset," Mark wrote.
Further, noted Mark, additional exploration work could enhance project economics by altering the project resource grade, given the high-grade mineralization the drill bit recently hit. The current Goldstrike resource, as updated in 2018, amounts to 925,000 ounces (925 Koz) of 0.5 g/t Au in the Indicated category and 296 Koz of 0.47 g/t Au in the Inferred category.
The Goldstrike preliminary economic assessment (PEA), Mark indicated, outlined an open-pit to heap-leach operation producing about 715 Koz annually throughout the mine's 7.5-year life at an all-in sustaining cost of US$793 per ounce. Using a US$1,700 per ounce gold price, the net present value discounted at 5% for the Goldstrike operation was forecasted to be US$292 million and the internal rate of return, 52.4%.
Mark reviewed the just reported maiden reverse circulation drill results from Goldstrike, which are for 17 holes over 2,216 meters (2,216m) placed in the historic Hamburg pit, part of the main zone from which most of the project resource came) and the Beavertail deposit, southwest of Hamburg. Some highlight intercepts are from three holes.
From Hamburg, hole PGS 748 returned 22.9mm of 2.09 g/t Au, including 9.1m of 4.36 g/t Au. PGS 754 showed 15.2m of 3.6 g/t Au, including 6.1m of 7.75 g/t Au.
At the Beavertail target, hole PGS 739 demonstrated 12.2m of 1.02 g/t Au, including 1.5m of 6.01 g/t Au.
Turning to Liberty Gold's Black Pine project in Idaho, Mark reiterated that the initial resource estimate compiled for it in July "furnishes an initial proof of concept of the Black Pine deposit, which we view capable of eventually supporting a multimillion-ounce, low-cost, heap-leach project in a tier one jurisdiction."
Upcoming catalysts for the exploration company include additional drill results from both Goldstrike and Black Pine as well as a Black Pine PEA, expected in Q3/21.
Haywood has a Buy rating and a CA$2.75 per share target price on Liberty Gold, the shares of which are trading today at around CA$1.22 per share.
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Disclosures from Haywood Securities, Inc., Liberty Gold Corp., Exploration Update, Sept. 9, 2021
I, Geordie Mark, hereby express that the views expressed in this report (which includes the rating assigned to the issuer's shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my compensation was, is, or will be directly or indirectly related to the specific recommendations.
Haywood Securities, Inc. has reviewed lead projects of K92 Mining Inc., Liberty Gold Corp., Osisko Mining Corp., and Pure Gold Mining Inc. and a portion of the expenses for this travel have been reimbursed by the issuer.
Haywood Securities, Inc. or one of its subsidiaries has managed or comanaged or participated as selling group in a public offering of securities for Osisko Mining Corp. and Pure Gold Mining Inc. in the past 12 months.