Liberty Gold Announces Preliminary Feasibility Study Results for the Black Pine Oxide Gold Project in Idaho, with a 17-year Mine Life and a 32% After-Tax Internal Rate of Return

2024-10-10

TSX - Toronto Stock Exchange · Gold · Silver · Antimony · Canada

Open pit, run-of-mine (no crushing) heap leach operation with a one-year construction period and initial capital expenditure of $327 million

Average annual production of 183 thousand ounces of gold in years 1 to 5 with Life-of-Mine average annual production of 135 thousand ounces of gold

All-In Sustaining Cost for years 1 to 5 of $1,205 per ounce of gold and LOM AISC of $1,380 per ounce of gold

$552 million After-Tax Net Present Value (5%) with a 32% After-Tax Internal Rate of Return and a 3.3 year payback at a base case gold price of $2,000 per ounce

VANCOUVER, British Columbia, Oct. 10, 2024 (GLOBE NEWSWIRE) -- Liberty Gold Corp. (TSX:LGD; OTCQX:LGDTF) ("Liberty Gold" or the "Company") is pleased to announce the results of a Preliminary Feasibility Study (“PFS” or the “Study”) prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) at its flagship Black Pine Oxide Gold Project (“Black Pine” or the “Project”) in southern Idaho, USA. The Study supports a technically straight-forward, low capital intensity, open-pit, run-of-mine (“ROM”) (no ore crushing, screening or agglomeration) heap-leach operation processing oxide gold ore, with attractive economic returns.

This news release should be read in combination with the Study presentation slide deck available at this link: https://libertygold.ca/images/news/2024/October/BlackPineProjectPFSDeck.pdf

The Study assumes a base-case gold price of $2,000/ounce (“oz”) and all figures in this news release are stated in United States dollars (“$” or “US$”) unless otherwise noted. Table 1 below presents a summary of the key metrics for the Black Pine PFS.

Cal Everett, CEO and Director of Liberty Gold commented: “This PFS highlights the strong economic potential at Black Pine, representing our vision for a low-risk, sustainable and long-lived gold mining operation in Idaho. It demonstrates the Project’s ability to exploit higher grades early in the mine life, allowing for solid cash flows over the first five years, with a production profile that reduces the payback period and maximizes the initial return for our investors. The PFS mine plan produces more than 2 million ounces of gold over a projected mine life of 17 years, creating a solid pathway towards mine permitting, project advancement and a future construction decision.”

“We believe there is significant upside for project optimization and resource growth going into a full feasibility study. Growth will be driven by new resource discovery from multiple target areas, upgrade of inferred mineral resources into the measured and inferred mineral resource categories and assessment of gold production potential from the reclaimed heap leach pad. Work in many of these areas is already beginning to yield encouraging results. We look forward to keeping the market apprised of our progress.”

Table 1: Key Black Pine Project Metrics

Conference Call and Webcast

Liberty Gold will be hosting a conference call and webcast to discuss the results of the PFS:

The conference call will be archived for later playback until October 17, 2024, and can be accessed by dialing Toll-free in U.S. and Canada: +1.800.770.2030 or Toll: +1.609.800.9909 using the Playback ID 5058354#.

Project Economics Sensitivity Analysis

A sensitivity analysis was carried out on the after-tax financial metrics from the PFS base case to illustrate the Project’s sensitivity to commodity prices, initial capital and operating costs. Results are illustrated in Tables 2 and 3 (all figures in US dollar millions unless otherwise indicated).

Table 2: After-tax NPV (5%), IRR and Payback Sensitivity to Gold Price

| Gold Price ($/oz) | $1,700 | $1,850 | $2,000 | $2,150 | $2,300 | $2,450 | $2,600 | | After-Tax NPV (5%) ($M) | $174 | $362 | $552 | $739 | $924 | $1,110 | $1,296 | | After-Tax IRR (%) | 15% | 24% | 32% | 40% | 47% | 55% | 62% | | Payback (years) | 4.3 | 3.8 | 3.3 | 2.4 | 1.8 | 1.7 | 1.5 | | | | | | | | | |

Table 3: After-Tax NPV (5%) and IRR sensitivity to Changes in Project Parameters & Gold Price

| | | Gold Price/oz | | | | | After-tax NPV (5%) in $M | Change | $1,850 | $2,000 | $2,300 | $2,600 | | Total Capital Costs | 15% | $323 | $512 | $884 | $1,256 | | 0% | $362 | $552 | $924 | $1,296 | | | -15% | $403 | $593 | $965 | $1,336 | | | Operating Costs | 15% | $131 | $323 | $701 | $1,072 | | 0% | $362 | $552 | $924 | $1,296 | | | -15% | $591 | $776 | $1,148 | $1,516 | | | | | Gold Price/oz | | | | | After-Tax IRR (%) | Change | $1,850 | $2,000 | $2,300 | $2,600 | | Total Capital Costs | 15% | 20% | 27% | 41% | 54% | | 0% | 24% | 32% | 47% | 62% | | | -15% | 29% | 38% | 56% | 73% | | | Operating Costs | 15% | 13% | 22% | 39% | 54% | | 0% | 24% | 32% | 47% | 62% | | | -15% | 33% | 41% | 56% | 70% | | | | | | | | |

PFS Overview

The PFS incorporates geological, assay, hydrological, metallurgical, geotechnical, environmental and cultural information collected by Liberty Gold and its consultants and contractors, as well as extensive historic information captured from the previous mining operation on site.

Project Description

Black Pine hosts a large, Carlin-style, sedimentary-hosted oxide gold system, located in southeastern Cassia County, southern Idaho, USA, a 2-hour drive north from Salt Lake City, Utah. The currently identified surface footprint of the gold mineralization extends over an approximate 18 square kilometre (“km 2 ” ) target area contained within Liberty Gold’s 69.3 km 2 project area of which 40.6 km 2 are permitted for exploration activities including drilling. (see press releases dated June 11, 2024 and September 25, 2024 ).

Black Pine is a past-producing open-pit, ROM heap leach mine, active from 1991 to 1997 when Pegasus Gold produced 435,000 oz of gold and 189,000 oz of silver from five open pits. Road access to the site is well established with the I-84 highway running directly adjacent to the project area and existing power at the mine gate. The location is sparsely populated, semi-arid, with no surface water exposed in the project area and no threatened or endangered species.

The production from the Project is subject to a 0.5% net smelter royalty (with a 50% buyback right to the Company, which has been assumed to be exercised in the economic analysis).

For a 3D video of a run through of the site layout, click on this link: https://youtu.be/ScIQ4cF_QwE

Mining

The PFS utilizes open pit mining with mine planning based on economic pit shells generated by mine planning software. Ore feed to the leach pad is planned at 50,000 tonnes per day or 18.3 million tonnes per year for the estimated 17-year life of mine. There will be a 9-month pre-production period to provide access to higher grade ore horizons for early years processing. There are significant opportunities to improve mid-life production through resource growth and conversion ahead of the feasibility study. Lower-grade ores are stockpiled throughout the mine life and re-handled on to the heap to optimize gold production.

Total material movement averages 47 million tonnes per year over life of mine, with a peak at 55 million tonnes per year. Ore is sourced from two large multi-phase open pits, together with six smaller ‘satellite’ open pits. The strip ratio is favourably low at 1.3:1 (waste:ore), resulting from the extensive envelope of lower-grade oxide gold mineralization surrounding the higher-grade horizons and permeating through the mass of carbonate host rock units.

The open pit mining at Black Pine is designed as a conventional, owner-operated surface mining operation, where the owner is responsible for planning and executing direct mining and all mine fleet maintenance, equipment mobilization, supervision, labor, geology and grade control. Blasting would be performed as a contract service. The PFS mine plan proposes a blended mine fleet of 400 tonne-class hydraulic excavators, 100 tonne-class hydraulic excavators, 11.5 cubic metre bucket front end loaders, 136 tonne off-highway haul trucks and 64 tonne off-highway haul trucks.

Metallurgy

Six phases of metallurgical testing have been completed on Black Pine oxide ores, using bulk samples and predominantly, large diameter PQ core. A total of six bulk samples and 174 variability composites have been tested at Kappes, Cassiday & Associates in Reno, Nevada and included extensive geo-metallurgical characterization, comminution testing, bottle roll and column leach testing and environmental characterization of head samples and column residues. The oxide ores respond very well to cyanide leaching with typically >80% of the leachable gold extracted in the first 10 days of laboratory column leaching. Modeling of column test data support ROM leaching as the preferred processing method, with a primary leach cycle of 90 days.

Commercial scale ROM gold and silver grade-recovery models have been developed for the geo-metallurgical oxide ore types, defined by gold cyanide solubility, location and lithology. The limited amount of mineralized carbonaceous material present at Black Pine has been extensively modelled and has been treated as waste rock.

Processing

Gold will be recovered using run-of-mine (no crushing, screening or agglomeration) heap leaching with material placed by mine haul truck stacking onto a single heap leach pad sited at the eastern extent of the Project. The pad is designed in four phases to contain up to 315 million dry tonnes of leachable material, with operational segregation of the oxide ore types in isolated cells on the leach pad to prevent comingling.

ROM-sized ore will be stacked in 10 metre (“m”) vertical lifts to a maximum heap height of 100 m. Lime will be added prior to truck dumping on the pad, ore will be ripped and subsequently leached with dilute cyanide solution using conventional irrigation. Leach solution will flow by gravity through the heap and be conveyed to the process solution tank. No surface ponds other than an emergency event pond are included in the PFS design.

Leached gold will be recovered from solution using a 3-train, activated carbon adsorption circuit. The gold (and any silver) will then be stripped from carbon using a desorption process followed by electrowinning to produce a precipitate sludge, which is refined on site in a furnace to produce final doré bars.

Process water is drawn from five existing, active water wells, located within 5 kilometres from the processing facility. Power is grid supply over an existing 25 kV line to the mine gate.

Cost Estimates

Capital and operating costs were estimated by M3 Engineering for the processing and general and administration components of the PFS costs estimate; all mining costs were estimated by AGP Mining.

The capital costs estimate presented in Table 4, is considered to have overall accuracy of -20% / +25%.

Table 4: Black Pine PFS Capital Cost Breakdown

| Capital Costs | Initial | Sustaining | Total | | US$ Million | US$ Million | US$ Million | | | Pre-stripping and Stockpile (1) | $89.3 | $0.0 | $89.3 | | Mine ( 2 ) | $31.4 | $55.9 | $87.3 | | Process | $161.4 | $121.3 | $282.6 | | Contingency | $35.3 | $31.4 | $66.7 | | Owners Cost | $9.2 | $10.6 | $19.8 | | Total Capital Costs ( 3 ) | $326.6 | $219.2 | $545.8 |

1. 13 million tonnes of ore stockpiled during pre-stripping 2. Includes down payment for lease financing of mine equipment 3. Excludes reclamation and closure costs estimated at $54 million

A summary of the operating costs estimate for Black Pine is presented in Table 5. Operating costs are based on ownership and owner’s direction of all mine and processing equipment and facilities. Reclamation and closure costs estimated from first principles at $54 million and validated with a Nevada Standardized Reclamation Cost Estimator model, are additional to sustaining capital costs illustrated in Table 4 and are included in the Project economic evaluation.

The mining costs are based on quotes for mining equipment and estimated owners’ costs. The PFS base case assumes the mine fleet is leased with the mine operating cost carrying the annual lease payment. Processing costs were estimated by M3 Engineering and NewFields, based on first principles, assuming the owner employs and directs all operations and maintenance for all site facilities. Labor costs were estimated using Idaho labor rates and specific staffing requirements. Unit consumption of materials, consumables, power and water were estimated from first principles.

Table 5: Black Pine Operating Cost Estimate

| Operating Costs | LOM | Unit Costs | | US$ Million | US$/tonne ore | | | Mining (1) | $1,943 | $6.49 | | Process Plant | $538 | $1.80 | | G&A | $220 | $0.73 | | Refining | $22 | $0.07 | | Total Operating Cost | $2,724 | $9.10 |

1. Assumes lease financing of mine equipment

Operating costs have an effective date of June 1, 2024, and are presented with no added contingency.

Sustainability

At Liberty Gold, sustainability is integral to our operations and decision-making, ensuring long-term value for stakeholders. Since 2021, we have published annual sustainability reports, reinforcing our commitment to transparency and accountability. At Black Pine, we engage regularly with stakeholders through updates, tours, and local events. We are deeply committed to preserving biodiversity, supporting sage grouse habitat restoration and funding a four-year mule deer migration study with Idaho Fish and Game. Sustainability initiatives included in the Black Pine PFS include renewable energy supply through local utility, no net increase in water draw, habitat mitigation, and waste rock backfill. We propose to explore mine fleet electrification and other key sustainable initiatives during feasibility to minimize our carbon and project footprint.

Further Opportunities

Optimization of the Black Pine Project will be evaluated ahead of and during feasibility. This includes:

Potential to significantly increase the size and confidence of the resource at Black Pine. Approximately 60% of the project area has not yet been drill-tested: The infill drilling and step-out drilling at Rangefront, M-Zone and Discovery, if successful, could expand the mineral resource and convert inferred mineral resource into the measured and indicated mineral resource categories. Evaluation of the historic heap to determine the nature and extent of residual gold in the heap and its amenability to further processing. New discovery from a currently on-going drill exploration program on seven high-priority targets across the project area. The resulting feasibility mine plan would likely change based on continued exploration success and resource expansion.

Mine planning and design focusing on cut-off grade optimization, stockpiling strategy, bulk-material movement options (e.g. conveyors) for ore to the heap, haul road layout optimization and the potential to expand leaching capacity to 24 million tonnes per year. Use of electric and potentially autonomous mining equipment in the open pits (shovels, drills & haul trucks). Further define the options for renewable energy, such as solar, to supply site requirements, particularly important for future electrification options.

Next Steps

A Mine Plan of Operations is currently being drafted and is planned for submission to US federal and cooperating agencies in the fourth quarter of 2024 to commence formal mine permitting under the National Environmental Policy Act (“NEPA”). Advance all baseline studies required to support the mine permit applications. Technical work to further advance and de-risk the project towards feasibility level will continue into 2025 and the Company intends to conduct a feasibility study to provide the basis for a construction decision. Key areas of work include: Resource upgrade and growth, Evaluate historic heap potential as a future ore supply, Refine geo-metallurgical models and complete metallurgical testing required, Completion of additional studies on groundwater sources & quality, geotechnical data collection and design for the heap, pit slopes and rock waste facilities, and Feasibility level rock geochemical characterisation for environmental studies.

An NI 43-101 compliant technical report on the Black Pine PFS will be available on SEDAR within 45 days of this release (the “Technical Report”), including all qualifications, assumptions and exclusions that relate to this PFS. The Technical Report is intended to be read as a whole and sections should not be read or relied upon out of context.

Black Pine Mineral Reserve Estimate

Mineral Reserves have been estimated for a conventional, multiple pit, open pit mining operation utilizing surface waste rock storage facilities, pits backfill, extensive ore stockpiling and direct haul to a single ROM heap leach facility. Pit slope angles were defined by geotechnical evaluation supported by hydrological analysis.

Table 6: Black Pine Mineral Reserve Estimate

| Reserve Class | Million tonnes | g/t Au | (000) oz Au | | Probable | 299.4 | 0.32 | 3,110 | | Total | 299.4 | 0.32 | 3,110 | | | | | |

Notes:

The Mineral Reserve estimate was prepared by AGP Mining Consultants Inc., Toronto, Canada (“AGP”) and has an effective date of June 1, 2024. The Qualified Person responsible as defined under NI 43-101 for the Mineral Reserve estimate is Todd Carstensen RM-SME, Principal Mine Engineer and independent of Liberty Gold. Mineral Reserves reported are consistent with the CIM Definition Standards for Mineral Resources and Mineral Reserves (2014). Mineral Reserves are converted from Mineral Resources through the process of pit optimization, pit design, production scheduling, stockpiling and cut-off grade optimization. Mineral Reserves are reported to a cut-off grade of 0.10 g/t gold and are based on a gold price of US$1,650/oz. Metallurgical recovery of gold is based on a variable gold leach recovery model derived from extensive metallurgical studies. All mineralized carbonaceous materials have been treated as waste. Mine dilution was estimated based on a 1.0 m skin applied to ore to waste contacts. Units are metric tonnes, metric grams & troy ounces; “Au” = gold. The estimate of mineral reserves may be materially affected by geology, environment, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.