Liberty Gold Corp. (LGD:TSX; LGDTF:OTCQX) announced a nonbrokered, private placement for CA$9.5 million (CA$9.5M) in gross proceeds to fund continued advancement of its two U.S. projects, Black Pine and Goldstrike, reported BMO Capital Markets analyst Brian Quast in an April 29 research note.
"We view this transaction as positive as this will allow the company to continue to explore and develop the Great Basin," Quast wrote.
BMO has an Outperform rating on the British Columbia-based explorer, currently trading at about CA$0.36 per share.
Specific use of capital
Quast relayed that Liberty intends to primarily use the placement proceeds on exploration and drilling of seven, identified, high-priority target areas at Black Pine in Idaho, finish the preliminary feasibility study in Q3/24 and start the mine permitting process in Q4/24.
In the deal, up to 27,142,858 units will be issued at CA$0.35 apiece, explained the analyst. Each unit will consist of one common share and one-half of a common share purchase warrant. With each warrant, the holder may acquire one Liberty Gold common share for CA$0.45 during the 24 months after the offering is completed, expected on or around May 17, 2024.
Sale of ex-U.S. asset
Quast pointed out in his report that Liberty also recently announced the sale of its 72.1% share of the TV Tower project for US$8.3M, a divestment intended to also bolster the mining company's balance sheet.
Of the total gross proceeds from the sale, noted Quast, Liberty is to receive US$3.6M on the transaction closing date, US$2.2M on the first anniversary of the closing and the final US$2.5M on the second anniversary. BMO anticipates the closing to happen in Q3/24.
"The sale of TV Tower in Turkey will allow Liberty to focus on the Great Basin going forward," Quast wrote.
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