Just weeks after announcing that it had increased its resource estimate for its flagship Black Pine project in southern Idaho, Liberty Gold Corp. (LGD:TSX; LGDTF:OTCQX) has released drill results that include the highest-grade gold assay ever returned at the project.
Hole LBP813 in the M zone returned 7.07 grams per tonne gold (g/t Au) over 18.3 meters, including 11.92 g/t Au over 10.7 meters, and 46.7 g/t Au over 1.5 meters.
Analyst Chris Thompson of PI Financial, who maintained his Buy rating with a target of CA$0.90, called the results "a pleasant surprise."
The hole "provides the grade kicker that many have forgotten Black Pine can deliver," Thompson wrote in a Feb. 22 update note. "Results from offset holes are pending, further verifying — we hope — potential for resource growth at the M Zone."
Analyst Chris Thompson of PI Financial, who maintained his Buy rating with a target of CA$0.90, called the results "a pleasant surprise."
The results released this week included 34 additional reverse circulation drill holes from the M and Back Range zones that were drilled in 2022. The goal was to upgrade the current mineral resource estimate (MRE) and discover new higher-grade, near-surface oxide gold mineralization.
The company said it found such a new area of near-surface high-grade oxide gold in the results from 25 holes drilled in the Black Range zone. It said the unexpected results in the M zone also are promising.
"The high-grade, near-surface characteristics of M zone makes it an area of focus for 2023 as we believe M zone has the grade, continuity, location, and scale for potential early cash flow generation as we work through pit optimization and mine scheduling studies," Liberty President and Chief Executive Officer Jason Attew said. "In addition, the encouraging Back Range results underpin our theory that the Back Range and Discovery zones are linked, for which we will test once we receive permits anticipated in late 2023."
Earlier this month, the company announced it increased its resource estimate for Black Pine 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 Catalyst: 'Strong Potential' for Even Larger Estimate
That estimate may just be the beginning of the potential for the project, analyst Alex Terentiew wrote in an update note on Feb. 21. He reiterated his Buy rating with a target price of CA$1.80 per share.
"In our view, these new holes once again demonstrate both strong potential for a larger mineral endowment than that published in the Feb. 7 Mineral Resource Estimate, as well as the potential for higher grades," Terentiew wrote.
Terentiew said Black Pine is "one of the most advanced and prospective gold deposits in the Great Basin."
"While the drills continue to turn, work behind the scenes advances to de-risk the project as water and surface rights are acquired and metallurgical testing helps prepare the project for a (preliminary feasibility study) PFS," he wrote.
Other highlights from the M zone include hole LBP736, which returned 1.17 g/t Au over 47.2 meters, including 2.23 g/t Au over 15.2 meters; and hole LBP823, which returned 0.93 g/t Au over 38.1 meters, including 2.35 g/t Au over 6.1 meters.
For the Back Range holes, LBP796 returned 3.1 g/t Au over 27.4 meters, including 4.33 g/t Au over 18.3 meters; LBP774 returned 1.36 g/t Au over 15.2 meters, including 3.79 g/t Au over 3 meters; and LBP782, which returned 0.78 g/t Au over 115.8 meters, including 1.29 g/t Au over 25.9 meters.
More Fieldwork, Drilling Upcoming
Analyst Geordie Mark of Haywood Capital Markets continued to double down on his view that Liberty could be an M&A target downstream.
"We continue to be encouraged by ongoing exploration success at Black Pine," said Mark, who reiterated his Buy rating with a target of CA$2.
The Black Pine resource released this month used a constraining resource pit at a cut-off grade (COG) of 0.2 g/t Au.
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 million ounces (Moz) Au in 2021.
That estimate may just be the beginning of the potential for the project, analyst Alex Terentiew wrote in an update note on Feb. 21. He reiterated his Buy rating with a target price of CA$1.80 per share.
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 PFS level. It also plans to drill 32,000 more meters at Black Pine.
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.
"Between Black Pine and Goldstrike, Liberty now controls approximately 4.3 Moz of undeveloped, high-margin oxide gold in the Great Basin, underscoring the company's potential M&A appeal, analyst Brock Colterjohn wrote Feb. 23 for Cormark Securities. "Liberty Gold trades at just 0.18x our NAV (at $1,800/oz Au) which we believe is a considerable discount for a company with two robust development projects within highly sought-after North American mining camps."
Streetwise Ownership Overview*
Liberty Gold Corp. (LGD:TSX; LGDTF:OTCQX)
Colterjohn stuck with his Buy rating and a target of CA$2.20.
Ownership and Share Structure
Institutions and strategic investors own 41.6% of Liberty, including Newmont Corp. (NEM:NYSE), which owns 4.3% or 13.76 million shares. In addition, Van Eck Associates Corp. owns 11.83% or 37.75 million shares, and Franklin Advisers Inc. owns 8.21% or 26.21 million shares, according to Reuters.
Management and insiders own 7.6%, including Director Cal Everett, who owns 3.01% or 9.6 million shares, and Board Chairman Mark O'Dea, who owns 1.74% or 5.56 million shares.
The rest, 50.8%, is retail.
Liberty has a market cap of CA$158.91 million with 319.1 million shares outstanding, including 295.6 million free floating, Reuters reported. It trades in a 52-week range of CA$1.21 and CA$0.315.
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