Liberty Gold sells Goldstrike project in Utah to Heliostar Metals for $72.5M

Liberty Gold (TSX: LGD) will sell its Goldstrike project in southern Utah to Heliostar Metals (TSXV: HSTR) as it continues to advance its flagship project in Idaho.

Under the terms of an agreement signed this week, Liberty will receive approximately $70 million in staged cash payments, some of which are tied to project milestones, plus approximately 1.6 million shares of Heliostar valued at $2.5 million.

The transaction, Liberty said, will provide the company with additional capital to advance its main asset: the Black Pine gold project in southern Idaho.

Black Pine represents one of the few large-scale oxide gold deposits in the US. It holds 402.6 million indicated tonnes grading 0.32 gram gold per tonne for contained metal of 4.16 million oz. gold and 97.7 million inferred oz. grading 0.23 gram gold for 712,000 oz. gold., according to a 2024 estimate.

A prefeasibility study published that year gave the project a net present value (at a 5% discount rate) of $552 million and an internal rate of return of 32%. Once in operation, it is expected to produce 2.2 million oz. gold over 17 years, at an average all-in sustaining cost of $1,380 per oz.

The Black Pine project recently joined the FAST-41 federal government program, allowing the company to expedite its permitting process.

A year earlier, Liberty had sent in its draft mine plan and signed an interagency memorandum of understanding, starting the countdown to a 2028 construction start.

“This transaction provides meaningful non-dilutive capital, with total consideration of $72.5 million, strengthening our balance sheet at an important stage in the advancement of Black Pine,” Liberty Gold CEO Jon Gilligan said in a news release.

“The structure delivers near-term funding while maintaining exposure to additional value as Goldstrike advances, supporting feasibility and long-lead procurement at Black Pine, without shareholder dilution,” Gilligan said.

By market close in Toronto, Liberty Gold’s stock was up 3.8%. The Vancouver-based company has a C$568.6 million ($413.1 million) market capitalization.