40,000m Drill Campaign Aims to Expand Liberty Gold’s Black Pine

Key Concepts

Black Pine Project: Liberty Gold's flagship gold project in Idaho, USA, a former producer with significant low-grade, heap-leachable oxide gold resources.
Pre-feasibility Study (PFS): A study that outlines the technical and economic viability of a mining project, indicating a go/no-go decision for a full feasibility study. Liberty Gold completed its PFS in October.
Feasibility Study (FS): A comprehensive study that provides a detailed assessment of the technical, economic, and environmental aspects of a mining project, forming the basis for a construction decision. Liberty Gold anticipates releasing its FS in October 2026.
Heap Leach: A mining process where crushed ore is piled on an impermeable liner, and a chemical solution (typically cyanide) is used to dissolve and extract gold.
Run-of-Mine (ROM) Oxide Gold: Gold extracted from oxide ore that is processed directly without crushing or grinding.
Strategic Investment: An investment made by a company in another company with the aim of gaining a significant stake and influencing its strategic direction. Santara Gold's 9.9% investment in Liberty Gold is an example.
Resource Growth: The process of increasing the estimated quantity of mineralized material within a project.
Reserve Growth: The process of increasing the estimated quantity of mineralized material that can be economically and technically extracted.
Strip Ratio: The ratio of waste rock to ore that needs to be removed to access the ore. A lower strip ratio is generally more favorable.
Legacy Heap Leach Pads: Existing piles of previously leached ore from historical mining operations.
Environmental Legacy: Environmental issues or liabilities left behind by past mining activities.
Gold Price Leverage: The extent to which a project's economic value changes in response to fluctuations in the gold price. Low-grade heap leach operations exhibit high leverage.
Net Present Value (NPV): A measure of the profitability of an investment, calculated by discounting future cash flows to their present value.
Permitting Process: The regulatory process required to obtain approvals for mining operations, involving environmental impact assessments and government reviews.
NEPA (National Environmental Policy Act): A U.S. federal law that requires federal agencies to assess the environmental effects of their proposed actions.
Notice of Intent (NOI): A formal notification to the government that a project will proceed with the permitting process.
Draft Mine Plan of Operations: A document submitted to regulatory agencies outlining the proposed mining activities.
Completeness Review: A review by regulatory agencies to determine if a submitted mine plan is complete.
Draft Environmental Impact Statement (EIS): A document that assesses the potential environmental impacts of a proposed project.
Mid-tier Producer: A gold mining company that produces between 100,000 and 300,000 ounces of gold per year.
Foundational Asset: A core asset that forms the basis for a company's growth and development.
Critical Minerals: Minerals deemed essential for economic and national security, such as antimony.
Mergers and Acquisitions (M&A): The process of combining or purchasing other companies.

Santara Gold's Strategic Investment and Market Appreciation

Liberty Gold has recently secured a significant strategic investment of 9.9% from Santara Gold. This investment is viewed as a strong endorsement of Liberty Gold's technical work, particularly its pre-feasibility study (PFS) and its plans for advancing the project. Santara Gold's investment also signifies confidence in Liberty Gold's technical team and their ability to guide the project through feasibility, detailed engineering, and ultimately to a construction decision. This development has coincided with a 60% year-on-year increase in Liberty Gold's share price, indicating a positive market reaction and growing appreciation for the company's prospects.

The Black Pine Project: Technical Progress and Future Outlook

The Black Pine project in Idaho is a key asset for Liberty Gold. It is a former producing mine with a substantial resource of low-grade, heap-leachable oxide gold. The company's recently completed PFS, released in October, outlines an attractive project characterized by run-of-mine oxide gold heap leach open-pit operations.

Key aspects of the current development phase include:

Feasibility Resource Drilling: Liberty Gold is currently undertaking 40,000 meters of drilling to build the feasibility resource. This drilling is primarily focused on the Rangefront resource area, a new discovery from 2002.
Resource Growth and Upgrading: The drilling aims to upgrade inferred resources within the Rangefront area to indicated resources, which will contribute to the overall reserve. Recent drilling has indicated significant growth in this area, with potential for it to become the first material mined due to its near-surface mineralization, which could reduce the strip ratio.
Metallurgical Test Work: Ongoing metallurgical test work is crucial for confirming gold recovery rates.
Geotechnical and Hydrological Work: Fieldwork in these areas is expected to conclude by the end of 2025.
Feasibility Study Timeline: The company anticipates releasing its Feasibility Study (FS) in October 2026.

Anticipated improvements in the FS compared to the PFS include:

Resource and Reserve Growth: An increase in both the estimated resource and proven reserves.
Increased Production Rate: Targeting 200,000 ounces of gold per year for the first five years, positioning Liberty Gold as a solid mid-tier producer.
Modest Capital and Operating Cost Pressure: While some increases in capital expenditure and operating costs are expected, they are anticipated to be modest.
Extended Mine Life: The FS is expected to demonstrate a longer mine life for the project.
More Deliverable Project: The overall project is expected to be more robust and achievable.

Exploiting Legacy Heap Leach Pads

Liberty Gold is also exploring the potential of extracting gold from historical heap leach pads at Black Pine. A recent 24-hole sonic drilling program on these legacy pads, which contain approximately 30 million tons of previously leached ore, revealed an average head grade of just over 0.2 g/t with 50% cyanide leachability. This suggests the potential for 50,000 to 100,000 recoverable ounces.

Benefits of processing the legacy heaps include:

Economic Recovery: Generating revenue from these ounces.
Environmental Remediation: Addressing an environmental legacy by rehabilitating the pads and placing them on a modern, approved heap design.
Pre-strip Reduction: Unloading 30 million tons of pre-strip material from the rock beneath the heaps.
Exploration Target: The mineralization beneath the heaps, identified during condemnation drilling, presents a significant exploration target, potentially connecting to the Rangefront area and the half-million ounces to the north.

Gold Price Assumptions and Project Economics

The current high gold price environment, with prices around $3,600-$3,700 USD per ounce, significantly benefits low-grade, heap-leachable gold operations due to their high leverage to gold price movements.

NPV Uplift: For every $100 increase in the gold price, Liberty Gold anticipates a $100 million increase in its NPV.
Gold Price Assumptions for FS:
- Resource Shell: For the resource shell constraint in the FS, Liberty Gold is likely to use a price around $3,000 USD per ounce if current prices hold.
- Reserve Constraints: For reserve constraints and mine designs in late Q1 of the following year, discussions are ongoing, but the price is likely to be between $2,200 and $2,600 USD per ounce. This is a significant increase from the $1,650 USD per ounce used in the PFS.
Payback Period: With current gold prices holding through to 2028 (construction) and 2029 (assuming spot prices of $3,600), the project could achieve a payback period of under a year.

Permitting Process and Government Support

Liberty Gold initiated the formal U.S. federal permitting process in January of the current year by submitting a draft Mine Plan of Operations. This plan is currently undergoing its second revision with the Forest Service and the BLM.

Completeness Review: A completeness review is anticipated within the next couple of months, marking the end of this initial stage.
Notice of Intent (NOI): Following the completeness review, a Notice of Intent (NOI) will be issued, which is the federal registration of the project.
NEPA Timeline: Once the NOI is issued, the formal NEPA clock starts, with a 24-month timeline to a draft decision. While the administration aims to shorten this timeline, Liberty Gold is confident in meeting it.
Projected Timeline: Liberty Gold is planning for a December 2027 draft decision notice, leading to a March 2028 construction start. With a 9-month construction period, first metal is targeted for late December 2028.
Government Relations: Liberty Gold reports a positive relationship with federal and state governments, who recognize the project's relative straightforwardness, its status as a former producer, and its potential to bring economic development to the area.

Broader Company Strategy and Future Growth

Liberty Gold's ultimate strategy is to build the Black Pine project and become a gold producer. The company's roots are in discovery, but with Black Pine, they see an opportunity to develop a foundational asset for a new mining company.

Internal Development Focus: The company is shifting its focus towards development and building internal discipline to deliver on its commitments and construct a new mine.
Simplicity of Processing: The open-pit heap leach processing circuit is considered one of the simpler circuits, well within the capabilities of a junior developer transitioning to production. It avoids the complexities of mills or flotation, has a relatively low environmental footprint, low water consumption, and low entry costs.
Production Scale: The project's resource base supports a significant production scale of 200,000 ounces per year, offering substantial upside for shareholders.
Diversification and Future Projects:
- Gold Strike Project: Liberty Gold has a second asset, Gold Strike, a smaller gold deposit in southern Utah. While initially considered for packaging with critical minerals into a separate company, the strategy is now to potentially keep Gold Strike in the portfolio as a follow-on project after Black Pine.
- Mergers and Acquisitions (M&A): The company is also open to pursuing M&A opportunities, potentially acquiring a project of similar dimension to Black Pine. The goal would be to leverage the construction team from Black Pine onto new projects.
M&A Considerations: In the current premium gold price environment, acquisitions are likely to be at a premium. Given that available cash is allocated to Black Pine, any potential deal would likely involve paper, leading to shareholder dilution. Liberty Gold remains open to both acquisition and merger opportunities.

Key Catalysts for the Next 6-12 Months

Investors can expect several key catalysts from Liberty Gold over the next 6 to 12 months, categorized into permitting and technical streams:

Permitting Stream:

Notice of Intent (NOI): A critical milestone expected in Q4 of the current year. The issuance of the NOI formally starts the permitting clock and provides certainty of timing for permit approval.
Completeness Review: A press release on the completeness of the Mine Plan of Operations will precede the NOI.
Draft Environmental Impact Statement (EIS): Following the NOI, the next significant milestone is the publication of the draft EIS, expected 12-16 months later.

Technical Stream:

Incremental Drill Results: A series of press releases over the next six months will detail drill results and demonstrate incremental growth in the resource.
Metallurgical Results: Updates on metallurgical results are expected, confirming a strong understanding of recovery rates.
Resource Update: At the end of the current year, a resource update will be released, forming the basis for the feasibility study and expected to show significant resource growth.
Feasibility Study: The full Feasibility Study is anticipated in October of the following year, with updates on engineering progress expected throughout the year.

John Gilligan, President and CEO of Liberty Gold, expressed gratitude for the Santara investment and thanked Paul Harris for the interview. The coverage of the Mining Forum Americas is brought to you by Metalla Royalty and Streaming.