On June 11, 2024, Liberty Gold Corp. (LGD:TSX; LGDTF:OTCQX) announced the approval of the fourth Plan of Operations amendment on its Black Pine oxide gold project in Idaho, increasing the permitted area of exploration by 51% to 37.3 km2. Ventum Capital analysts Alex Terentiew and Maximilian Myers, in a research report published the same day, maintained a Buy rating on the stock and a target price of CA$0.70.
"Liberty Gold's permitted exploration area has increased by 51% to 37.3 km2 following the approval for an amendment. The expanded exploration permit allows the Company to explore at least seven new targets that have been identified where the gold-bearing carbonate sequence is known to occur at shallow depths," the analysts noted. "Drilling of the new target areas is set to commence this month, and considering Liberty Gold's track record of discovering new ounces at Black Pine, we expect defined resources to grow as gaps within the current resource are filled in and boundaries of the resource limits are extended."
Terentiew and Myers highlighted Liberty Gold's impressive track record of resource growth at the Black Pine project.
"Since the maiden resource estimate for Black Pine in 2021 of 2.1 million ounces, LGD has grown the defined resources at the project following each successive drill program and resource update with 3.5 million ounces now defined, representing nearly a 70% increase in less than three years," they stated. "With this track record, new targets to be tested, and a significantly expanded exploration permit (Figure 1), we are confident that LGD will add more ounces in future updates."
The analysts also discussed the upcoming Pre-Feasibility Study (PFS) for the Black Pine project, expected in August or September 2024, which they view as a materially significant catalyst for the company. Key details they are watching for include the mining grade sequence, strip ratio (estimated at 2.5:1), and initial capex (modeled at US$390M).
Ventum Capital compared Liberty Gold to its peer group, noting that the company currently trades at one of the lowest enterprise value to ounce (EV/ounce) ratios.
"On a company-wide resource basis, LGD trades at US$19/oz Au, a discount to its more advanced peers and more in line with costs of discovery. As resources increase and the economics of the project are more clearly defined in the upcoming PFS, we anticipate a re-rating of LGD stock and the valuation gap to diminish," Terentiew and Myers commented.
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Disclosures for Ventum Capital Markets, Liberty Gold Corp., June 11, 2024
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