Black Pine's $2.4 Billion Feasibility Study: Bigger Mine, Same Value — and $411 Million Still to Raise

A 200-ton haul truck at Liberty Gold's (LGD) Black Pine project in southern Idaho is expected to carry only about two ounces of gold. The host opens The Deep Dive's analysis with that image because 0.29 grams per tonne looks, on its face, uneconomic. The video's central argument — put forward by Liberty Gold CEO John Gilligan — is that the business runs on margin, not grade. The new feasibility study is his attempt to prove it: 433 million tonnes of ore, a US$2.4 billion after-tax NPV (net present value — the discounted value of future cash flows), a 61% IRR (internal rate of return — the project's annualized return), and a two-year payback.

## Why such low grade can work

Black Pine is designed as a run-of-mine heap-leach operation, which the video describes as about as simple as gold mining gets. Rock is blasted, hauled, and stacked directly onto a leach pad, where a weak cyanide solution trickles through and picks up the gold. There is no crusher, no mill, and no tailings dam — just a truck shop, a heap-leach pad, an ADR plant (where gold is stripped from solution and poured), and some offices. The host notes this suits a modular build, and that the simplicity is what allows the economics to work at 0.29 grams per tonne.

To compensate for the low grade, the plan stacks 74,000 tonnes of ore per day — 48% more than the 2024 pre-feasibility study assumed, partly because the reserve was redrawn at $2,250 gold instead of $1,650. Everything else stays cheap: a 1.3-to-1 strip ratio (waste rock mined per unit of ore), no crushing, and under $9 per tonne to mine, stack, and leach.

The flip side is recovery. The study assumes 70% recovery from uncrushed rock, which the video notes is still being confirmed in large column tests — though Pegasus Gold leached this same rock the same way for seven years in the 1990s, pulling 435,000 ounces before abandoning the site. Liberty picked up the reclaimed ground, power line included, in 2016 and has spent about ten years and roughly US$100 million drilling it back to feasibility.

## What the feasibility study actually changed

The study outlines an open pit averaging 202,000 ounces per year over the first five years and 177,000 ounces per year across the life of mine, totaling 2.8 million ounces. Reserves grew 30% to 4 million ounces, first-five-year production rose 10%, and life-of-mine output jumped 31%. Initial capital rose 26% to support the larger reserve, with unit operating costs roughly unchanged.

The headline, though, is where the host pushes back. The study's NPV went from $552 million to $2.4 billion — but compare both studies at the same gold price and their values land within about 6% of each other. The extra $1.8 billion in the headline came from pricing gold at $3,250, not from a better plan. Even that $3,250 assumption is conservative relative to peers: 13 of 15 other gold studies tracked this year used a higher price, and at the most common $3,600 assumption Black Pine would be worth about $2.9 billion after tax.

## Costs, and a mid-life trough

Operating costs run about $9 per tonne — roughly $6 mining, $2 for the leach pad and ADR plant, and $0.80 on-site G&A. Spread over 2.8 million payable ounces with royalties, that yields a cash cost near $1,400 per ounce. Add sustaining capital ($254 million), closure spend (nearly tripled to $160 million from the PFS, which the video flags as unexplained), and taxes, and AISC (all-in sustaining cost — what it really costs to produce an ounce) lands at $1,566. That is up from $1,381 in the PFS, mainly because grade fell from 0.32 to 0.29 grams per tonne, putting more rock behind every ounce. The host calls $1,566 a strong business case — a 52% margin at the study price, 64% at spot — but notes it sits toward the upper end of the peer group, so a falling gold price bites harder here.

On the results call, analyst Lauren McConnell raised a production trough in years 7–10, where output falls to roughly 95,000–120,000 ounces and all-in costs peak near $3,000 an ounce — close to break-even at the study price. Gilligan responded that pushing Range Front forward removes some, but not all, of the mid-life drop. The video also notes the study leases the entire mining fleet, which flatters its upfront capital against peers that buy their own.

## The gating items: permitting, build schedule, funding

Three open questions dominate the video's conclusion. First, permitting: the study stacks 74,000 tonnes per day, but the plan of operations being permitted was drafted around 55,000 tonnes per day. Management says the study fits inside the permitted footprint, with anything beyond it reviewed after the record of decision expected in January 2028 — so the study-case mine still carries a permitting question mark.

Second, Liberty plans the whole build in a single construction season. The host quotes management admitting the schedule is aggressive while insisting it is doable.

Third, money. Liberty had $36 million in cash at the end of June, plus up to $60 million owed from the spring sale of Gold Strike — enough to reach a construction decision, nowhere near the $411 million needed to build. Beyond conventional debt and equity, Gilligan keeps returning to selling a royalty on Black Pine's production stream, which he describes as essentially non-dilutive. The project carries only a 0.25% royalty once Liberty exercises its buyback, leaving room to sell more — though Wheaton, holder of that royalty and 3.6% of the company, has right of first refusal on any deal.

## Where the market sits

At Wednesday's close of C$2.04, the host puts Liberty's enterprise value around US$783 million — about 0.32 times Black Pine's NPV at the study price, or 0.18 times at spot. Gilligan argued in June that Liberty sits in the lower quartile of developers because investors price permitting risk. The host broadly agrees that on each company's own numbers Liberty looks cheap — only Vista trades lower — but notes most peers priced their studies on cheaper gold, which inflates Liberty's apparent discount. Normalized to $3,250 gold, Liberty moves to the top half of the group.

The wrap-up is measured: the feasibility study adds definition — a 4-million-ounce reserve, 16 years of scheduled mining, and the document lenders price off. The mine got bigger; its value, at a constant gold price, did not. What decides the project now is the list above: a mine plan larger than the one being permitted, an aggressive one-season build, and $411 million to raise. As the host puts it, Gilligan may convince investors this is a margin story, not a grade story — the open question is whether he can convince lenders.