Fronteer chomping at the drill bit

Fronteer Development Group (FRG-T, FRG-X) is eagerly awaiting drill permits after surface sampling turned up a new silver-gold discovery on the Clara project in southwestern Mexico.

Highlights from sampling on the 34-metre-by2-km area include:

• 147.1 grams silver (or 4.29 oz. Per ton), 0.28 gram gold per tonne, 0.18% lead, and 0.52% zinc over 34 metres, 8 metres of 272.2 grams silver (7.94 oz.), 0.52 gram gold, 0.27% lead, and 1.22% zinc;
• 15.1 metres of 179.3 grams silver (5.23 oz.), 2.86 grams gold, 0.27% lead, and 0.63% zinc;
• 3.6 metres at 116.2 grams silver (3.39 oz.), 6.79 grams gold, 5.06% lead, 1.56% zinc and 0.75% copper;
• 5 metres of 72 grams (2.1 oz.) and 2.74 grams gold;
• 3.4 metres running 95 grams silver (2.77 oz.) and 1.97 grams gold; and
• 5 metres of 30.9 grams silver (0.90 oz.), 2.77 grams gold, 2.35% lead and 0.62% zinc.

“This system is an outstanding new target with no historical drilling and excellent grade-tonnage potential,” said Fronteer’s vice-president of exploration Rick Valenta in a prepared statement. “We are very encouraged by our surface results and look forward to the upcoming drill program on the property.”

The company has already lined up land use agreements with all of the local ejidos and private landowners. Drilling is scheduled for mid-May, pending permitting.

Fronteer can acquire the Clara and San Pedro properties from Teck Cominco (TEK.SV.B-T, TCKBF-O) by spending a total of US$2 million on exploration over 4 years. The company plans to spend some $500,000 exploring the two projects this year.

The two properties are round 100 km apart in Jalisco state. Both are centred on large, high-sulpidation epithermal gold systems. At San Pedro, the target area measures 600 metres by 700 metres. Mapping and sampling are underway in anticipation o f drilling, once the program at Clara wraps up.

Teck retains a back-in right on each project. The major also holds a 1.5%-2% net smelter royalty, which will be extinguished if it exercises its back-in option. Teck can initially take back a 51% stake in either project by doubling Fronteer’s expenditures over three years. Another 14% can then be had by funding a feasibility study, with further 5% available by arranging project financing.

Shares in Fronteer ended 75, or 10.6%, higher at a 52-week high of $7.80 following the new in Toronto on Apr. 18.