Liberty Gold expands mineralized footprint in Utah at Goldstrike

By Northern Miner Staff / November 25, 2018 / / Article Link

Shallow infill and step-out drilling - 250 metres south of the main deposit at Liberty Gold's (TSX: LGD) flagship Goldstrike project in Utah - suggests that oxide gold-bearing feeder structures follow multiple orientations that cross-cut the main deposit trend, the company says.

Exploration results from the Peg Leg area at the past-producing mine also indicate that the zone has starter-pit potential, given the higher-grade results over significant widths.

"Peg Leg had limited historical drilling - a few holes that intersected a bit of gold in the past," Cal Everett, the junior explorer's president and CEO, told The Northern Miner in an email. "Liberty Gold went into the area, as follow-up targeting the preferred Claron Formation host rocks to most of the Goldstrike deposit, and identified a high-grade oxide gold system with associated feeder structures."

Highlights of the most recent reverse-circulation drilling include 1.17 grams gold per tonne over 67.1 metres from 40 metres downhole, including 2.21 grams gold over 25.9 metres, in hole 630; 0.44 gram gold over 32 metres from surface, and 1.14 grams gold over 42.7 metres from 78 metres downhole, including 2 grams gold over 18.3 metres in hole 579; 0.99 gram gold over 51.8 metres from 44 metres downhole, including 2.45 grams gold over 10.7 metres in hole 631; and 1.63 grams gold over 9.1 metres from surface in hole 636.

The project, near the Nevada border in southwestern Utah, hosts disseminated gold mineralization similar to deposits on the Carlin Trend. Between 1988 and 1994, past producers mined 209,000 oz. gold there from 12 shallow pits at an average grade of 1.2 grams gold.

A resource estimate for Goldstrike that Liberty Gold completed in February outlines 49.6 million indicated tonnes grading 0.54 gram gold for 865,000 contained oz. gold, and 16.4 million inferred tonnes grading 0.52 gram gold for 274,000 oz. gold.

The resource estimate is based on 1,730 drill holes (historic and Liberty Gold drilling) and uses a cut-off grade of 0.25 gram gold.

According to a preliminary economic assessment (PEA) in July - which was based on the February resource estimate, but uses a lower cut-off grade of 0.20 gram gold - Goldstrike would have a 7.5-year mine life and produce an average 95,000 oz. gold annually. Direct operating cash costs are estimated at US$642 per oz. and all-in sustaining costs at US$793 per oz. gold.

The PEA estimates a 1.2-to-1 stripping ratio, US$113.2 million in pre-production capital, with payback in 2.3 years, and a US$129.5-million, after-tax net present value at a 5% discount rate, along with a 29.4% after-tax internal rate of return.

The study does not include benefits from by-product silver production or processing any residual gold in the historic heap-leach pads, which are being drill tested.

In October the company raised $11.6 million in a bought-deal financing that will be used to explore and develop Goldstrike, as well as Liberty Gold's Black Pine project in Idaho and its Kinsley deposit in Nevada.

Institutional shareholders include Van Eck, Resource Capital Funds, Newmont Mining (NYSE: NEM) and Teck Resources (TSX: TECK.B; NYSE: TECK).

This story was written by Trish Saywell and it first appeared in the print edition of The Northern Miner, volume 104 number 23 november 12 - 25, 2018.