In a July 16 research note, Haywood analyst Geordie Mark reported that Liberty Gold Corp.'s (LGD:TSX; LGDTF:OTCQB) just released maiden resource estimate "furnishes an initial proof of concept of the Black Pine deposit," and the company's ongoing exploration success there bodes well for expanding the resource via the current drill program.
The Black Pine resource, Mark relayed, consists of 105,100,000 tons (105.1 Mt) containing 1,715,000 ounces (1.715 Moz) of 0.51 grams per ton gold (0.51 g/t Au) in the Indicated category, and 31.2 Mt containing 370,000 ounces (370 Koz) of 0.37 g/t Au in the Inferred category, using a 0.20 g/t Au cutoff. Combined, these resources amount to 136.3 Mt containing 2.08 Moz Au at an average grade of about 0.5 g/t.
Using a higher cutoff of 0.50 g/t Au, the Indicated resource is 1.02 Moz Au at an average grade of 1.04 g/t, and the Inferred resource is 134 Koz Au at an average grade of 0.94 g/t.
The pit-constrained resource is 2.1 Moz Au at an average grade of 0.48 g/t or, at the higher 0.50 g/t Au cutoff, 1.2 Moz Au at an average grade of about 1.0 g/t.
"While the initial resource estimate came in below expectations on grade," Mark wrote, "we note ~75% of the posted resource ounces are carried within the Discovery zone, centered on the high grade oxide gold D-1, D-2, and D-3 areas, while a higher grade 0.5 g/t Au cut-off subset outlines a grade of ~1.0 g/t Au."
Mark wrote that potential for resource expansion exists given that the discovery zone remains open in all directions and at depth, and given the property's broad-scale anomalies at surface. Also, the maiden resource estimate includes only a portion of the 14 square kilometer mineralized system at Black Pine.
Liberty Gold has been drilling its current 52,000-meter drill campaign at Black Pine since April. Part of those efforts will drill test beyond the pit-constrained resource. Ounces defined there could be added to the existing resource following release of the imminent Black Pine preliminary economic assessment.
"We view [the Black Pine deposit as] capable of eventually supporting a multi-million-ounce low-cost, heap leach project in a tier-one jurisdiction," Mark wrote.
He also noted that metallurgical column testing showed "rapid" gold recoveries, 78% in phase one and 82% in phase two, "relatively insensitive to crush size." This means heap leach recovery would be easy and low cost. More metallurgical testing is being done, the results of which are expected this quarter, Q3/21.
Haywood updated its model on Liberty Gold and Black Pine, assuming a 3 Moz Au resource with a 0.50 g/t grade and production of about 20,000 tons per day via a heap leach process. After making these changes, Haywood maintained its Buy recommendation but lowered its target price on the gold explorer to CA$2.75 per share from CA$3.15. Liberty's current share price is about CA$1.27.
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Disclosures from Haywood Securities, Liberty Gold Corp., Research Report, July 16, 2021
Analyst Certification: I, Geordie Mark, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.
Important Disclosures
▪ Haywood Securities, Inc. has reviewed lead projects of Liberty Gold Corp. and a portion of the expenses for this travel have been reimbursed by the issuer.
Other material conflict of interest of the research analyst of which the research analyst or Haywood Securities Inc. knows or has reason to know at the time of publication or at the time of public appearance: n/a.
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