Freeman Gold triples Lemhi project value, builds 1M oz reserve

A feasibility study for Idaho-focused Freeman Gold‘s (TSXV: FMAN; US-OTC: FMANF) Lemhi project raises its value threefold, increases mine life and establishes 1 million oz. of gold reserves compared to a previous economic study. Shares surged.

The study gives Lemhi a post-tax net present value (discounted at 5%) of $696 million (C$988.9 million), a 227% increase over the preliminary economic assessment (PEA) from 2023, Freeman reported Monday. That increase is aided by the 130% rise in the gold price since 2023. The feasibility also lifts the internal rate of return by 12 percentage points to 34% and mine life by four years to 15 years. However, initial costs rise by 73% to $329.7 million for the open pit project. Lemhi is about 300 km northeast of state capital Boise.

"The completion of the Lemhi feasibility study represents a major milestone in the advancement of the Lemhi gold project and confirms what we believe is one of the most compelling undeveloped gold projects in the United States," Freeman CEO Bassam Moubarak said in a release. 

"Importantly, the project generates more than two dollars of post-tax NPV...for every dollar of initial capital invested, underscoring its capital efficiency and robust economic foundation." 

Advanced ranking

The feasibility now puts Lemhi in a small group of advanced gold development projects in Idaho, including Perpetua Resources’ (TSX, Nasdaq: PPTA) Stibnite, Liberty Gold’s (TSX: LGD) Black Pine and Integra Resources’ (TSX-V: ITR; NYSE-A: ITRG) DeLamar, in a state better known for its silver mines than gold.

Freeman shares jumped almost 20% to 34¢ apiece, their highest level in one month, giving the company a market capitalization of $93 million. The stock has traded in a 12-month range of 10¢ to 46¢.

972,000-oz output

Lemhi could produce 972,000 oz. over its life, at all-in sustaining costs of $1,718.95 per oz. and at a base case gold price of $3,650 per ounce.

The feasibility boosted output by about 120,000 oz. compared to the 2023 PEA, Moubarak said, adding that the mine plan enhanced the mill’s crushing and grinding capacity.

That higher output estimate is based on infill drilling completed last year at Lemhi. A total of 92,696 metres of drilling has been completed at the project, Freeman said.

The company plans to pursue acceptance into the federal FAST-41 permitting fast track, which fellow Idaho developer Liberty Gold achieved for its Black Pine project.