In a July 13 research note, PI Financial analyst Chris Thompson reported that Liberty Gold Corp. (LGD:TSX; LGDTF:OTCQB) completed a "positive" maiden resource estimate for its Black Pine property and did so earlier than the analyst expected.
"Of the +2M oz [million ounce] global resource, over 1M oz gold is contained in the high grade (+1 g/t) material surrounding past producing pits, which we see providing a significant boost to the early years of the mine life relative to our current estimates, which would be accretive to the project NAV," Thompson commented.
The analyst presented the highlights of the resource estimate report. For one, more than 80% of the resource ounces are Indicated, "providing increased confidence," because of the great amount of drilling in one area, particularly the Discovery Focus Area. Inferred ounces, on the other hand, are mostly based on historical drilling.
"In all cases, the Indicated grades improve upon the Inferred grades, showing the potential to enhance the resource through additional drilling (underway)," wrote Thompson.
The second key point is that the satellite deposits at Black Pine could be expanded with additional drilling. About 25% of the resource is in areas that Liberty Gold could drill but has not drilled extensively.
Three, further upside potential exists in the majority of Liberty Gold's highly prospective Black Pine property, which remains unexplored, Thompson noted. This land includes the area between the DFA and the M and Rangefront zones and the F and J zones. The company is now addressing this, with its in-progress drill program.
"We remain encouraged by the exploration potential offered by the remainder of the Black Pine land package excluded from the current resource; much of which has returned grades consistent with, or improving upon the released resource grade," Thompson wrote.
Finally, the waste to ore strip ratio in the DFA, noted in the resource update, is consistent with PI Financial's estimate, at 2.4:1.
Thompson noted that Liberty Gold already is working on a preliminary economic assessment (PEA) of Black Pine to include this resource estimate, completion of which is expected later this quarter, Q3/21.
PI Financial has a Buy rating and a CA$2.80 per share price target on Liberty Gold, the current share price of which is about CA$1.24.
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Disclosures from PI Financial, Liberty Gold Corp., July 13, 2021
We, Justin Stevens and Chris Thompson, hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject securities or issuers. We also certify that no part of our compensation was, is, or will be, directly or indirectly related to the specific recommendations or views expressed in this report. We are the research analysts primarily responsible for preparing this report.
Research Disclosures for Liberty Gold Corp.:
4) PI Financial Corp. and/or its affiliates expect to receive or intend to seek compensation for investment banking services from the subject company.
Analysts are compensated through a combined base salary and bonus payout system. The bonus payout is amongst other factors determined by revenue generated directly or indirectly from various departments including Investment Banking. Evaluation is largely on an activity-based system that includes some of the following criteria: reports generated, timeliness, performance of recommendations, knowledge of industry, quality of research and investment guidance, and client feedback. Analysts are not direct
