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Gold Co. Expands Idaho Project's Resource Estimate

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Building on a maiden resource released in 2021, Liberty Gold Corp. announces it has substantially increased its resource estimate for its flagship Black Pine project in southern Idaho.

Liberty Gold Corp. (LGD:TSX; LGDTF:OTCQX) announced it has increased its resource estimate for its flagship Black Pine project in southern Idaho by 52% in indicated and 31% in inferred ounces.

Building on a maiden resource released in 2021, the new estimate shows an indicated resource of 2.6 million ounces (Moz) of oxide gold (Au) at an average grade of 0.52 grams per tonne (g/t) Au totaling 157.3 million tonnes, and an inferred resource of 483,000 ounces of oxide Au at an average grade of 0.43 g/t Au totaling 35.1 million tonnes.

The resource used a constraining resource pit at a cut-off grade (COG) of 0.2 g/t Au.

Analyst Geordie Mark of Haywood Capital Markets reiterated his Buy rating last week with a target of CA$2. The stock was CA$0.52 Monday afternoon.

Analyst Geordie Mark of Haywood Capital Markets reiterated his Buy rating last week with a target of CA$2. 

Mark said he viewed the company to be a “notable downstream M&A target in a tier-one jurisdiction.”

“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,” Mark wrote.

The company is trading at “a considerable discount” for having two robust development projects — the other being its Goldstrike project in Utah, wrote analyst Brock Colterjohn with Cormark Securities last week.

“Regarding the new resource, Liberty’s cost per ounce of gold discovered (including acquisition costs) equates to an impressive (~US$16 an ounce),” Colterjohn wrote. “Results from an additional 12,000 (meters) drilled post-cut-off date are expected in the coming weeks, which we believe will continue to demonstrate resource growth potential.”

Colterjohn rated Liberty a Buy with a target of CA$2.20.

Catalyst: Project in ‘Rarified Territory’

The company attributed the significant increase in ounces to intensive drilling in the Rangefront Zone, expansion and combination of several existing zones, testing of surface waste rock storage and backfill, and definition drilling in areas of previously defined mineralization.

“Compared to the July 2021 resource estimate, tonnes are up significantly while grade has improved using conservative input assumptions, positioning Black Pine in the rarified territory of an oxide resource with more than 2.6 million indicated ounces and a further half a million ounces inferred,” Liberty President and Chief Executive Officer Jason Attew said. “We are encouraged that Black Pine continues to expand in all directions with future resource growth expected as drill results continue to impress.”

Colterjohn,with Cormark Securities, rated Liberty a Buy with a target of CA$2.20.

The company acquired the 5,088-hectare Black Pine property from Western Pacific Resources Corp. (WRP:TSX.V) 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 Au. Liberty released the maiden resource estimate for the project of 2.1 Moz Au in 2021.

A high-grade subset of the estimate within the 0.20 g/t Au resource pit using a COG of 0.50 g/t Au consisted of an indicated 1.5 Moz Au at an average grade of 1.02 g/t Au totaling 47.4 million tonnes, and an inferred 219,000 ounces Au at an average grade of 0.93 g/t Au totaling 7.3 million tonnes, the company said.

“With 84% of the resource in the (measured and indicated) category, the model built upon 2,398 (meters) of tightly spaced drill holes (362,423 [meters]) showcases a high degree of confidence in the integrity of the estimate,” Alex Terentiew of Stifel GMP wrote last week while rating the stock a Buy.

De-Risking Continues

The company said it is continuing to de-risk the project by advancing the geotechnical program, waste-rock characterization, hydrologic work program, and permitting to preliminary feasibility study (PFS) level.

“Liberty's already commenced 2023 drill program constitutes 32,000 (meters) of (reverse circulation) drilling aimed at resource-upgrading and expansion over several areas of the deposit,” Terentiew stated.

“With 84% of the resource in the (measured and indicated) category, the model built upon 2,398 (meters) of tightly spaced drill holes (362,423 [meters]) showcases a high degree of confidence in the integrity of the estimate,” Alex Terentiew of Stifel GMP wrote last week while rating the stock a Buy.

Assays from 40 holes drilled in 2022 are still outstanding, as well. Other upcoming catalysts include the expansion of permits to drill in a wider area, and metallurgical column test results, wrote analyst Rabi Nizami of National Bank of Canada Financial Markets, who rated the stock Outperform with a target of CA$1.

Black Pine is definitely the centerpiece in Liberty’s crown, Terentiew wrote.

“While the company’s Goldstrike project in Utah is more advanced and also holds promise, Black Pine’s greater scale and potentially easier development path is rightfully taking center stage and the most significant value drive for the company,” he wrote.

Last fall, Liberty also reported results from Goldstrike, where the drilling program continues to confirm the presence of high-grade, oxide gold mineralization over significant thicknesses and above cutoff-grade mineralization in surface rock storage areas.

Ownership and Share Structure

Streetwise Ownership Overview*

Liberty Gold Corp. (LGD:TSX; LGDTF:OTCQX)

*Share Structure as of 2/14/2023

Institutions and funds own 37.3% of Liberty, management, and insiders own 7.6%, Newmont Corp. (NEM:NYSE) owns 4.3%, and the rest is retail, according to the company.

Liberty has a market cap of CA$165.27 million with 319.1 million shares outstanding, including 295.5 million free floating. It trades in a 52-week range of CA$1.21 and CA$0.315.

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1) Steve Sobek compiled this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.

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