Extracted
from the March 25, 2004
Interim Update
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New
Recommendation
Liberty Star
Gold Corp.
(LBTS – OTC.BB)
Liberty Star has recently staked a large property position adjacent
to Northern Dynasty’s massive Pebble gold-copper deposit in
Alaska. The company began trading at the end of February, and is
so far almost completely unknown among investors.
Liberty Star’s project is at an early stage, but there is
strong geological evidence suggesting the potential for additional
discoveries on the scale of Pebble. Northern Dynasty recently published
an independent resource calculation that established Pebble as the
largest gold deposit in North America and also the second largest
copper resource. The 2.7 billion tonne Pebble deposit is part of
a vast mineralized system described by the U.S. Geological Survey
as the largest of its kind in the world, based on the area on which
Northern Dynasty and a previous operator have demonstrated the presence
of mineralization.
Liberty Star’s management and technical team includes some
very experienced geological experts and that team has been working
on the project for more than half a year.
James Briscoe, the president of Liberty Star, and John Guilbert,
director, are highly regarded experts in the type of geology that
hosts Pebble. The Liberty Star team recognized the significance
of the fact that Pebble occupies a portion of the contact area around
a large batholith (a rock mass that originated from a body of molten
rock that cooled beneath the surface). The circular feature defined
by the disturbed area around the batholith is often referred to
as a caldera. Metal deposits are frequently found around the periphery
of calderas in this type of geological setting.
The area is covered by a shallow layer of clay and gravel, making
it difficult to see the underlying rocks and get a good understanding
of the geology. Briscoe and his team worked for months to pull together
all of the available regional geological information, satellite
imagery, and regional airborne geophysics as a basis for the staking.
Ultimately, they staked 237 square miles to secure a large property
position around the periphery of the caldera.
The team is presently conducting an extensive, detailed airborne
geophysical survey over the area. That survey will incorporate the
known Pebble deposit, which will provide a reference signature to
help identify prospective areas on the Liberty Star property.
Results of the geophysical survey are expected to identify areas
on which to begin preliminary ground work, including more detailed
geophysics, geochemistry and other techniques. The Liberty Star
team anticipates that they will be able to identify drill targets
and carry out some drilling before the end of the summer season.
Liberty Star carries a fairly hefty market valuation for a project
at such an early stage. The lure for speculative investors is that
the geological setting has the potential to generate additional
deposits on the scale of Pebble. Such a discovery could generate
a very substantial payoff for investors.
In short, if the Liberty Star ground turns up indications of the
presence of a deposit like the one located on the adjacent property,
then the value of the company could easily be several times the
current value. The company has a lot of geological talent, and particularly
a lot of expertise with regard to this type of geology. My sense
is that there is a very realistic chance that the team will come
up with results before the end of the summer justifying a share
price that could be a multiple of the current level.
So far, the company is almost completely unknown outside of the
individuals closest to the project. I expect that Liberty Star will
very soon begin to attract a lot of investor attention, based on
the highly prospective geological setting and the highly regarded
team of management and advisors. As work gets underway in the field
over the coming weeks, that level of interest will continue to build.
Although this company is speculative, exploration success could
result in a substantial reward for investors who get a position
near the current price level.
Shares
outstanding: 37.5 million
Price: March 25, 2004: US $1.53
Market cap: US $57.3 million
Contact, Jim Briscoe 520-721-1375
www.libertystargold.com
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