Liberty Gold confirms Idaho-based Black Pine gold project as technically straightforward with high return potential
TSX-listed Liberty Gold finds in a feasibility study published on the Black Pine oxide gold project, in Idaho, that a large-scale, 16-year oxide gold development based on an openpit, run-of-mine heap leach operation requiring no ore crushing, screening or agglomeration is viable.
The feasibility study supports average yearly payable gold production of 202000 troy ounces in years one to five from a 4.04-million-ounce probable mineral reserve, with an initial capital requirement of $411-million.
In the remainder of the mine life production can average 176700 troy ounces.
Liberty also confirms the project can generate strong economic returns across a broad range of gold price scenarios.
The study assumes a base case gold price of $3 250/oz, in which case the project has an after-tax net present value (NPV) of $2.3-billion, an internal rate of return )IRR) of 60.5% and a payback period of two years.
At a lower gold price of $2500/oz, Black Pine's after-tax NPV decreases to $1.2-billion and the IRR to 33.4%, while the payback period widens to 3.4 years.
At higher prices of about $4500/oz, the project has an after-tax NPV of $4.3-billion, IRR of 104% and payback period of 1.2 years.
Liberty Gold president and CEO Jon Gilligan says the feasibility study confirms the opportunity to build a long-life, large-scale operation with strong economics and a technically straightforward development path.
"Black Pine has the scale, production profile and capital efficiency to support a pathway to becoming a significant US gold producer in the near term. Importantly, the feasibility study demonstrates substantial projected free cashflow generation with robust economics across a broad range of gold prices.
"The NPV-to-initial-capital ratio of about nine times and a payback of just over one year at current gold pricing of more than $4000/oz, are competitive metrics in the gold development space today," Gilligan explains.
The development of Black Pine is poised to support 300 long-term jobs. The company's focus has now shifted to detailed engineering, planning and other activities required to support execution readiness, while permitting remains ongoing.
