A piezometer used to measure underground water pressure installed in a brownfields pit as part of Liberty’s Black Pine permitting work. Credit: Henry Lazenby
Centerra Gold (TSX: CG, NYSE: CGAU) agreed to buy 9.9% of Liberty Gold (TSX: LGD) for about C$28 million to add a stake in a junior miner that’s focused on developing its Black Pine open-pit project in Idaho.
The deal disclosed Monday calls for Centerra to acquire just over 50 million Liberty Gold common shares at C$0.56 apiece. This represents a 10% premium to the stock’s five-day volume-weighted average price on the Toronto Stock Exchange and a 5.7% premium to Friday’s close.
Centerra gains the right to appoint one board member and maintain its ownership stake in the future, according to a Liberty Gold statement.
“We have recently observed a resurgence in interest in domestic projects, particularly those with visibility on permitting, and today’s transaction supports this trend,” National Bank Financial analyst Rabi Nizami said Monday in a note.
Centerra’s investment “bolsters visibility for the project as one of the few pre-feasibility stage multi-million-ounce heap leach projects in the US,” he added.
“We expect continued focus to remain on exploration to uncover more resources, which we believe is needed to help to re-optimize future mine plans to smooth out the production profile and supplant reliance on stockpile rehandling in the middle years of the currently envisioned pre-feasibility study mine plan.”
Growing resource
Liberty’s main asset is the past-producing Black Pine in southeastern Idaho, which has a growing resource. Located a two-hour drive north of Salt Lake City, Black Pine is part of the Great Basin that stretches across Nevada, Utah and Idaho and is considered one of the world’s most prolific gold-producing regions.
Liberty Gold jumped 9.4% to C$0.58 in midday trading Monday on the Toronto Stock Exchange. That gave the company a market value of about C$258 million. Centerra added about 1.9% to C$12.20.
Shares of Vancouver-based Liberty Gold have been on a tear in the past month, rising 41% through Friday. That’s more than double the gain for an index of Canadian junior gold miners, according to Nizami.
The deal is expected to close on or about Oct. 1. Liberty Gold will use proceeds to advance technical studies at Black Pine and for general corporate purposes.
Construction decision
The cash injection comes as Liberty Gold conducts metallurgical studies and a 40,000-metre drill program at Black Pine to inform a feasibility study that’s expected in the second half of next year. Executives are targeting a construction decision in late 2027.
Centerra’s investment “is a strong endorsement of our progress and the compelling potential of our flagship U.S. oxide gold project, Black Pine,” Liberty Gold CEO Jon Gilligan said in a statement.
“With Centerra’s technical depth, operational experience and existing presence in Idaho, we see a clear path to unlocking value and de-risking Black Pine’s development timeline. We look forward to collaborating closely as we accelerate Black Pine towards feasibility and on to a construction decision.”
Toronto-based Centerra said last month it would move ahead with development and construction of its Goldfield project in Nevada after rising gold prices boosted estimated returns.
Centerra is counting on Goldfield to boost total output and offset natural declines at Turkey’s Öksüt gold mine. It predicts Goldfield will become a “strategic” asset once production starts by the end of 2028.
Idaho is home to another key Centerra project – the Thompson Creek molybdenum mine, which is targeting first production in 2027.