Liberty Gold Corp. (LGD:TSX; LGDTF:OTCQX) announced it had upgraded its nonbrokered, private placement from CA$9.5 million to CA$12.5 million in gross proceeds. The cash is meant 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-developer, trading at the time of the report 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 35,715,362 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-US 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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- Liberty Gold Corp. is a billboard sponsor of Streetwise Reports.
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Disclosures for BMO Capital Markets, Liberty Gold Corp., April 26, 2024
Analyst's Certification I, Brian Quast, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients. Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Company Specific Disclosures Disclosure 16: A research analyst has extensively viewed the material operations of Liberty Gold Corp.. Disclosure 17: Liberty Gold Corp. has provided at its expense some or all of the itinerant travel for the research analyst related to facilitating a material site visit.
Methodology and Risks to Target Price/Valuation for Liberty Gold Corp. (LGD-TSX) Methodology: NA Risks: NA
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