Liberty Gold (TSX:LGD) - Moving Forward: From Exploration to Production

• Liberty Gold, led by Jason Attew, focuses on oxide deposits in the Great Basin and is listed on both the TSX and the OTC.
• Jason Attew has 30 years of experience in the mining industry and believes we are on the cusp of a significant long-term gold cycle.
• Liberty Gold's primary asset, Black Pine in Idaho, is viewed as a "company maker" and the company is progressing towards the permitting process to become a 300,000 ounce producer.
• The company has a strategy of de-risking their asset and emphasizes a simple operational approach, aiming for a nine-month build and a capital expenditure of over $200 million for Black Pine.
• Liberty Gold aims to release a pre-feasibility study in 2024 and has started the permitting process, with the goal of transitioning from exploration to production.

Liberty Gold - The Next Step to Production

Liberty Gold is an exploration and development company focused on advancing its oxide gold projects in the Great Basin of the western United States to production. Under the leadership of new President and CEO Jason Attew, the company is transitioning from being an exploration-focused junior to becoming a mid-tier producer capable of generating strong cash flows. Liberty Gold's flagship asset is the past-producing Black Pine project in Idaho, which Attew believes can be the "company maker" that transforms Liberty into a major player like SSR Mining and its Marigold mine.

The Black Pine Opportunity

Located next to a major highway near historic mining communities in Idaho, Black Pine has district-scale potential with over 8km of strike length identified so far. The project already hosts a mineral resource of over 3 million ounces of gold in the Indicated and Inferred categories, with significant expansion potential remaining through further exploration. Metallurgical test work has demonstrated that the oxidized mineralization is amenable to simple heap leaching, resulting in projected low costs.

Attew aims to advance Black Pine to production in the 150,000-200,000 ounce per year range, which would make it a profitable mid-tier asset even at today's gold prices. The pre-feasibility study currently underway will provide investors with a detailed economic assessment and mine plan for the first time in 2023. Based on initial analysis, Attew expects all-in sustaining costs (AISC) to be around $1000 per ounce, giving margins of $800-900 per ounce at current gold prices.

Fast Track to Cash Flow

A focus under Attew's leadership is minimizing the payback period on the estimated $200+ million in initial capital expenditure. Measures being undertaken include targeting high-grade zones close to surface in the early years through optimal pit phasing. Liberty is also assessing the potential to fast-track production by processing material from historic heap leach pads and waste rock dumps left by previous operators. Attew estimates 70,000-100,000 ounces can be extracted from the old heap leach pads with minimal cost.

The plan is to have Black Pine in commercial production within two years of securing construction financing. The rapid build timeframe of only 9 months is achievable due to the project's simplicity as an open pit, run-of-mine heap leach operation with no tailings or process water issues.

De-Risking on Track

Liberty Gold has been systematically de-risking Black Pine to make it construction-ready. The experienced exploration team has already drilled over 460,000 meters, defining a high-quality resource with over 80% in the Indicated category. Ongoing drilling is aimed at further expanding the resource and collecting additional data for the pre-feasibility study.

Extensive metallurgical test work has demonstrated excellent gold recoveries from uncrushed run-of-mine ore. The project's historic production provides added confidence regarding metallurgy and mineability. Key infrastructure requirements including power, water, and road access are already in place at the site.

Importantly, Attew has secured the key permits required for the heap leach operation, including water rights. The simplified federal permitting process now mandated by recent US legislation also provides a clear 24-month timeline to receive the key approvals needed to commence construction.

Proven Team with Skin in the Game

Liberty Gold has a proven technical team with multiple major discoveries to its name, including Long Canyon which Newmont purchased for $2.3 billion in 2011. The core team has been together for years exploring the Great Basin and discovering over 10 million ounces of gold resources.

Attew has added focus on good governance, requiring all executives and board members to meet minimum share ownership levels. He personally holds over $1 million worth of Liberty Gold shares, giving him significant skin in the game. This alignment of interests between management and shareholders will help drive value.

Significant Exploration Upside

While the focus is on fast-tracking Black Pine to production, the asset offers substantial resource growth potential that can drive further value creation. Attew notes that the scale of the mineralized system is still unknown, with expansion potential across the entire 8km corridor of surface gold mineralization. However, exploration drilling is currently constrained by Liberty's budget limitations as a small developer.

Once Black Pine reaches commercial production and starts delivering cash flow, Libery Gold will be in a stronger position to accelerate exploration activities and fully assess the upside. There is also prospective ground at the company's second project, Goldstrike in Utah, that remains untested.

Valuation Appears Cheap

Liberty Gold is currently trading at a market capitalization of only around CAD$120 million. Assuming Black Pine can achieve commercial production at a 150,000 ounce per year run rate in 2024, it could potentially deliver free cash flows of $75-100 million per year at $1800 gold prices. With exploration upside and a second project in the pipeline, Liberty's current valuation appears extremely cheap relative to its profit generation potential in a few years.

The path forward is clear - systematically derisk Black Pine, deliver a robust pre-feasibility study in 2023, secure construction financing, and achieve commercial production by 2024. Execution by the proven team led by Attew could generate huge returns for early investors at current prices. Liberty Gold offers an attractive investment opportunity with a project capable of transforming the company into a thriving new gold producer.

The Investment Thesis for Liberty Gold

• Black Pine is a quality asset with over 3 million ounces already defined and significant expansion potential. The project has clear scale potential to become a Tier 2 producing mine.
• The oxide mineralization is amenable to low-cost heap leach processing, resulting in projected all-in sustaining costs of around $1000/oz based on studies so far. This gives healthy profit margins at current gold prices.
• There is a clear pathway to near-term cash flow with fast-track production potential from historic heap leach pads, waste dumps, and early mining of high-grade zones.
• The experienced team has systematically derisked the project on many fronts including metallurgy, permitting, infrastructure, and securing water. The pre-feasibility study will be another major derisking milestone.
• The simplified federal permitting process provides clarity on timelines, with key permits achievable within 24 months.
• Attew has added strong corporate governance, ensuring management incentives are tied to performance and has mandated management share ownership. He has personally invested over $1 million in shares, aligning with shareholders.
• Current valuations around $120M look very cheap compared to peers and Liberty's own free cash flow potential once in production. There is an attractive valuation upside as Black Pine gets derisked and built.
• Exploration potential remains substantial, meaning there are opportunities for resource growth and new discoveries that can provide significant additional upside.

Liberty Gold offers an attractively valued opportunity to gain leveraged exposure to a de-risked project that can transform the company into a profitable gold producer within a relatively short timeframe.