Liberty Gold Corp. (LGD:TSX; LGDTF:OTCQB) used its 2022 drilling campaign at its flagship Black Pine project in southern Idaho to upgrade and expand its resource while working to de-risk the site at the same time.
The company extended the shallow mineralization along the southern edge of the Discovery Zone with results including 0.60 grams per tonne gold (g/t Au) over 80.8 meters from 24.4 meters to 105.2 meters and 1.47 g/t Au over 13.7 meters.
To de-risk the project, Liberty acquired new water rights needed to sustain a large, open-pit heap leach mine, and the outlook for a power hookup looked favorable, as well.
"We continue to be encouraged by ongoing exploration success at Black Pine and view the Company to be well positioned for resource growth over the near-term, and (it) is well positioned to furnish growth given its strong balance sheet,” Haywood Capital Markets analyst Geordie Mark wrote Nov. 29. "Furthermore, given the Company's oxide dominant asset base and attractive valuation, we view LGD to be a notable downstream M&A target in a tier-one jurisdiction."
Mark rated the stock a Buy with a CA$2 target price.
"We continue to be encouraged by ongoing exploration success at Black Pine and view the Company to be well positioned for resource growth over the near-term," Haywood Capital Markets analyst Geordie Mark wrote.
"Looking ahead, LGD shares continue to trade at an attractive valuation, particularly given the incremental de-risking being demonstrated through ongoing drilling on Black Pine,” Mark wrote. "We await the (preliminary economic assessment) PEA on Black Pine (2023) to be informed after a resource update (2023).”
Chris Thompson of P.I. Financial Corp. rated Liberty a Buy with a CA$0.90 target. Drilling results from this year reflect "potential for resource growth and refinement in multiple areas,” he wrote.
"We anticipate continued drilling at lower elevations during the winter months aiding LGD in refining its Black Pine resource model in preparation for an updated resource estimate,” Thompson said.
The Catalyst: Updated Resource Estimate
Analysts said they were looking to an expected updated resource estimate in Q1 of 2023 to push the stock to the next level.
In the F Zone at Black Pine, hole LBP744 returned 0.47 g/t Aug over 47.2 meters. The drilling further defined the oxide gold mineralization in the A Basin with 0.30 g/t Au over 33.5 meters in hole LBP675, discovered new oxide gold mineralization in the Bobcat target with 0.64 g/t Au over 19.8 meters in hole LBP761, and found 0.57 g/t Au over 51.8 meters in hole LBP708.
The company also registered the title to water rights for production at the site and an initial impact study to deliver the power needed was positive.
More results are still to come. "We look forward to continued success in the new year with the release of assay (results) from an estimated 80 pending holes to close out the 2022 drilling campaign, an updated resource estimate, and further growth and advancement of the project,” President and Chief Executive Officer Jason Attew said.
Bulk Mining Possible at Goldstrike
Earlier this fall, Liberty also reported results from its Goldstrike project in Utah, where the drilling program continued to confirm the presence of high-grade, oxide gold mineralization over significant thicknesses and above cutoff-grade mineralization in surface rock storage areas.
"Results . . . support potential offered by Goldstrike as a small but potentially economically viable heap leach oxide gold deposit,” Thompson wrote on Dec. 6.
"This 750 (meter) distance was not previously thought to be barren, as past drilling had already identified anomalous mineralization,” wrote analyst Rabi Nizami of the National Bank of Canada, who rated the stock Outperform.
A total of 12 metallurgical large-diameter core holes were drilled at Goldstrike. Highlights included: 0.87 grams g/t Au over 74.3 meters in hole PGS863C, including 1.51 g/t Au over 12.3 meters, and 0.68 g/t Au over 42.2 meters in hole PGS872C.
The company also finished 100 reverse circulation holes totaling 8,453 meters, including highlights of 1.75 g/t Au over 24.4 meters in hole PGS874, and 3.52 g/t Au over 10.7 meters in the Main Area.
"The results demonstrate that as drilling continues, gold mineralization at Black Pine tends to merge into larger, continuous mineralized zones that have the potential for bulk mining,” Thompson wrote.
‘An Underexplored Gold Trend’
The drilling at Black Pine showed a possible connection between two of the largest areas of concentrated gold and seemed to validate previously reported mineralization between the zones.
"This 750 (meter) distance was not previously thought to be barren, as past drilling had already identified anomalous mineralization,” wrote analyst Rabi Nizami of the National Bank of Canada, who rated the stock Outperform with a target of CA$1. The "results validate and extend this mineralization, filling in the gaps between earlier resource pits.”
The company acquired the 5,088-hectare Black Pine property from Western Pacific Resource Corp. in 2016 for US$800,000 and 300,000 shares of Liberty Gold and a 0.5% NSR reserved to Western Pacific.
It’s a Carlin-style gold system, like the prolific deposits on Nevada’s Carlin trend. It operated from 1992 to 1997, producing 435,000 ounces of gold (Au). Liberty released a maiden resource estimate for the project of 2.1 Moz Au last year.
The company holds large land tracts at Black Pine, "where the continuation of the gold mineralized envelop is being concurrently tested on several fronts,” Mark from Haywood wrote.
"Liberty has focused on the interpreted extensions of the main gold trends in the Great Basin, with Goldstrike situated on the southeast side of the Eastern Calderas in Utah,” Mark said. "Black Pine, meanwhile, is located approximately 100 kilometers east of the Long Canyon Trend across the border in Idaho, an area that could represent another underexplored gold trend.”
Ownership and Share Structure
Nearly half of the company is held by institutions, including Van Eck Associates Corp., which owns 11.9%; Franklin Advisors Inc., which owns 8.2%; and Merk Investments LLC, which owns 3.9%, according to Reuters. Insider shareholders include former CEO Cal Everett, who owns 3%, and Chairman of the Board of Directors Mark O'Dea, who owns 1.8%. Newmont Mining Corp. owns 4.4%.
Liberty has a market cap of CA$177.98 million with 318 million shares outstanding, including 294.5 million free floating. It trades in a 52-week range of CA$1.21 and CA$0.315.
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