Liberty Gold advances Black Pine, Goldstrike

Liberty Gold (TSX: LGD) has shown an interest in past-producing oxide gold projects in the Great Basin area of the southwest United States.

The historic Goldstrike heap-leach mine on its Goldstrike project in Utah’s portion of the Great Basin  produced 209,000 oz. gold from 12 shallow pits at an average grade of 1.2 grams gold per tonne between 1988 and 1994.

In Idaho, the historic Black Pine heap-leach mine on the site of its Black mine project produced 435,000 oz. gold at a grade of 0.63 gram gold from seven shallow pits between 1992 and 1997.

The company plans to drill both projects again this year and has high hopes for each of them.

But Moira Smith, the company’s vice-president of exploration and geoscience, says she anticipates Black Pine results the most because, after an 18-month wait, the company is on the cusp of getting a large plan of operations permitted that will open up a 7 km area within a 12 km gold system.

Shallow historic drilling and mining of outcropping gold mineralization on the Black Pine property in southeastern Idaho, northwest of Snowville, Utah, has left compelling targets at depth between pits and pit margins, she says, as well as beneath historic drilling, where the median drill hole depth is less than 100 metres.

Of the 1,866 historical holes drilled at Black Pine, 19% bottomed in oxide gold mineralization and 42% had unmined gold intercepts. Some of the unmined gold intercepts included 1.80 grams over 50 metres; 2.85 grams gold over 23 metres; 3.63 grams gold over 17 metres; and 6.88 grams gold over 11 metres.

While the average historic life-of-mine head grade at Black Pine was just 0.63 gram gold, there was variability in mined head grade, with 30% of production coming from three of the seven pits averaging 1.2 grams gold. This is reflected in high grades obtained during drill definition of the historic mineralization in these pits, including 14.66 grams gold over 20 metres; 19.13 grams gold over 24 metres; and 7.15 grams gold over 32 metres.

View to the south of the historic C-D pit at Liberty Gold’s Black Pine gold project in Idaho. Credit: Liberty Gold.

So far, Liberty Gold has drilled 13 holes of its own under a plan of operations that came with the property acquisition. Its second hole, No. 2, drilled the best unmined intercept on the property beneath historic gold mineralization, returning 78 metres of 1.49 grams gold. Drill hole 6 cut 1.80 grams gold over 8 metres; drill hole 4 returned 6.18 grams over 2 metres; and hole 11, 10.7 metres of 2.37 grams gold.

This year Smith plans to drill up to 20,000 metres.

The geologist has found three target types for the drill program: down-dip, gold-mineralization extensions from mined pits under shallow cover; unmined mineralization bodies identified by previous owners; and undrilled, high-priority gold-in-soil anomalies.

“Most historic drill holes were … 92 metres deep, and a lot of them ended in mineralization, and our 3-D modelling suggests we have quite a bit of room underneath that  would be prospective for mineralization. So we’re going to test as many areas as we can over that 7 km to see if our model is correct, and see if there is mineralization there,” Smith says.

“Some time last year we put out guidance that there is potential for 2–4 million oz. in that gold system,” she adds. “That’s the size of the system we’re looking for there. We have 1,866 historic drill holes and quite a few of those have a lot of gold mineralization in them. I can’t name another gold anomaly at surface in the Great Basin that is that large, and … hasn’t been mined already, or [isn’t] in production or [isn’t] being heavily explored, so this is an amazing opportunity for us.”

Liberty Gold acquired the property from Western Pacific Resources in June 2016 for US$800,000 in cash, 300,000 shares and a 0.5% net smelter return royalty.

Black Pine’s large, shallow, Carlin-style gold system is similar to Liberty Gold’s Goldstrike project in southwestern Utah, next to the Nevada border.

The company intends to drill at least 10,000 metres at Goldstrike this year, and update its resource estimate before the end of 2019.

A maiden resource completed in February 2018 outlines 49.6 million indicated tonnes grading 0.54 gram gold per tonne for 865,000 contained oz. gold, and 16.4 million inferred tonnes averaging 0.52 gram gold for 274,000 oz. gold. The resource is based on 1,730 drill holes — both historic holes and those drilled by Liberty Gold — and uses a cut-off grade of 0.25 gram gold.

A preliminary economic assessment from mid-2018 uses a lower cut-off grade of 0.20 gram gold and envisions a 7.5-year mine life, with average annual production of 95,000 oz. gold. The study estimates direct-operating cash costs of US$642 per oz., and all-in sustaining costs of US$793 per oz. gold.

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

In November, the company upgraded the plan of operations to expand access along the Goldstrike deposit trend from a fragmented area of 5.11 sq. km to a contiguous 8.66 sq. km area.

Within this area, the company is no longer restricted to operating on site-specific roads and drill pads with fixed locations. This gives Liberty more flexibility when it comes to infill and step-out drilling in and around all of the zones in the current resource.

“Now we’re in really good shape in terms of going where we need to go, and doing what we need to do,” Smith says, noting that her focus will be on the Dip Slope zone along the northern margin of the deposit, where drill holes on fixed, widely spaced pads did not adequately test the shallow mineralization, and where access to many areas was previously unavailable.

In 2018, the company drilled 24,700 metres in 200 reverse-circulation and 15 diamond core holes focusing on several goals: infill and expansion of the resource; testing the historic heap-leach, stockpile and waste dump areas that are largely situated within the PEA pit, and counted as waste in the model; and examining new targets across the property.

The overall objective was to connect oxide mineralization zones to form a larger, single pit.

In January, Liberty Gold released more infill and step-out results from RC drilling along the southern margin of the main Goldstrike deposit in the Peg Leg zone, with highlights of 2.95 grams gold over 18 metres in hole 670 and 1 gram gold over 14 metres in hole 669. Assays from the Hamburg Extension zone include 1.29 grams gold over 37 metres in hole 677, and 1.18 grams gold over 6 metres in hole 676.