Fairbanks, Alaska — With what appears to be an upturn in the gold market,
The company’s flagship property in the state is Golden Summit, which lies 30 km north of Fairbanks and 8 km south of the Fort Knox mine, owned by
Golden Summit is accessible via the paved Steese Highway. State and privately maintained gravel roads provide easy access to any area of the property on a year-round basis.
Freegold has a 93% leasehold interest in the 19-sq.-km, Golden Summit project. The property consists of 14 patented Federal lode claims, 72 unpatented federal lode claims and 77 state mining claims. The land is zoned as mineral land by the Fairbanks North Star Borough, which grants mineral development activities first-priority use.
“Our mission is to satisfy the desperation that the majors have for new reserves,” Freegold President Colin Bird told the Miner during a site visit. “We want to explore systems where the potential for reserves are more than two million ounces.”
He went on to say that the Fort Knox mine will eventually require more ore to keep operations going, and that the Golden Summit project has the potential to feed that hunger.
Fort Knox went into production in 1997 with proven and probable reserves of 154 million tonnes grading 0.8 gram gold per tonne, or 4.1 million contained ounces. Kinross also holds the True North deposit, 10 miles to the northwest, where resources are estimated to be 16.5 million tonnes averaging 2.5 grams per tonne, or 1.3 million contained ounces.
Kinross plans to mine 34.1 million tonnes of material from the Fort Knox open-pit mine this year. In addition, 14.9 million tonnes of material are to be mined from the True North pit. Mill throughput is pegged at 14.8 million tonnes, with 11.6 million tonnes coming from Fort Knox and 3.2 million tonnes from True North. Combined gold recovery is forecast at 85%, and gold production this year is estimated at 440,000 oz. The projected average mill grade for 2002 is 1.09 grams gold per tonne, with Fort Knox ore averaging 0.84 gram gold per tonne and True North averaging 1.99 grams. The total cash cost will likely be about US$210 per oz. this year.
Placer and lode gold have been mined in the region since mineralization was discovered there, about 100 years ago. More than 500,000 oz. of lode gold were recovered from past-producing underground mines on the Golden Summit property. In addition, 7 million oz. of placer gold were recovered from streams that drain the property.
Freegold is delineating the newly discovered Currey Shear zone, as well as the past-producing high-grade veins and associated disseminated low-grade mineralization at Cleary Hill. Earlier this year, the company performed a resistivity survey in an attempt to define the possible extensions of the zone. This was followed by a trenching and sampling program.
“We have more mineralization in wider zones than we anticipated,” said Senior Consulting Geologist Curtis Freeman. “We certainly have high-grade stuff, and now we’re going to drill it.”
The property boasts several past-producing high-grade underground mines that have been dormant since the 1940s.
“The average vein production was about one ounce per ton,” said Freeman. “These were small-scale mines; the deepest was about four-hundred feet.”
Freegold first acquired interest in the Golden summit property in mid-1991. Since that time, the company has performed extensive mapping, soil and rock sampling, as well as trenching, geophysical surveys and core and reverse-circulation drilling.
In 1996, the junior drill-tested a high-grade shear-hosted quartz vein at the Cleary Hill mine (estimated production: 281,000 oz. grading 44.6 grams per tonne). Hole 96-1 cut 69 metres averaging 0.9 gram gold per tonne gold per ton, included a 10.7-metre interval that averaged 3.6 grams gold per tonne. Hole 96-7 intersected 4.6 metres averaging 7.2 grams gold, including 1.5 metres of 20.1 grams gold.
Cleary Hill
The Cleary Hill vein strikes to the northwest and dips 45-70 to the south. Subsequent soil sampling over the Cleary Hill area defined a high-grade gold anomaly with values as high as 2.75 grams gold per tonne. Follow-up work outlined a northeast-trending shear zone, dubbed Dolphin. This district-scale feature hosts the 600,000-oz. past-producing Dolphin deposit, about 450 metres southwest of the Cleary Hill mine area.
Highlights of 1997 drilling include hole 97-3, which cut 0.9 metre averaging 33.8 grams gold; this was followed by a 49-metre interval grading 0.9 gram gold. Hole 97-4 cut 45 metres of 1.3 grams gold, followed by 19 metres of 1 gram gold.
Freegold believes that this low-grade disseminated gold mineralization in association with the existing high-grade vein mineralization represents a resource potentially minable by open-pit methods.
In 1998, Barrick funded a $2.5-million program designed to investigate a geochemical anomaly in the eastern portion of the Golden Summit property. The anomaly was similar to the one that led to the discovery of the Fort Knox mine. Freegold tried, but failed, to convince Barrick to drill a few holes outside of its target area below the old workings of the Cleary Hill mine (hole 98-01 had returned 1.8 metres averaging 128 grams gold per tonne, followed by 30 metres of 1.3 grams per tonne in the immediate footwall of this high-grade interval). The major terminated its agreement with Freegold in 1999.
Anna-Mary shear
Freegold believes that the Cleary Hill vein is one of several veins along what is locally known as the Anna-Mary shear. Mineralization is controlled by the intersection of the Dolphin and Anna Mary shear zones. In 2000, Freegold drilled hole CHD-1. It was collared south of the Wyoming vein at the intersection of these two shear systems. The hole cut 19.2 metres (18.9 metres true width) averaging 5.4 grams gold per tonne. The surface projection of this interval was dubbed the Currey zone. Gold mineralization in the Currey zone is characterized by strong quartz veining and flooding, sericite alteration and polyphase hydrothermal brecciation.
Anomalous gold values are associated with highly anomalous arsenic and antimony, with lesser amounts of lead and silver. Fragments of previously altered, quartz-vein intrusions are present in the core, which suggests a possible igneous genetic relationship at depth. The zone remains open at depth, as well as to the south.
More recently, International Freegold acquired a high-grade gold prospect, dubbed Rob, in the Pogo area. The Rob project is in the prospective Tintina gold belt, 30 km southeast of the 5.6-million-oz. Pogo gold deposit, which is being developed by
Freegold has the option to acquire a 100% interest in the project subject to payments totalling US$29,000 in cash over seven years, plus payment of 500,000 shares prior to July 2003 and an additional 500,000 shares once Freegold has spent US$1 million on exploration. The property is also subject to a 1% net smelter return royalty.
At present, Freegold is conducting due diligence sampling and reconnaissance work, which will be followed by trenching and drilling.
The Rob property is cut by a series of northeast-trending high-angle structures, which are, in turn, cut by younger east-west-trending high-angle structures. Most of the mineralization runs parallel to the northeast structures. Freegold intends to focus its initial exploration efforts on these high-angle structures.
Previous work conducted between 1995 and 1998 on the Gray Lead prospect returned grab-sample values as high as 186 grams gold per ton and drill intercepts of up to 4.1 metres grading 34.6 grams gold per tonne. Grab samples from the Michigan prosp
ect returned up to 991 grams gold, while grab samples from the Blue Lead prospect returned up to 953 grams gold. Drill intercepts from Blue Lead returned up to 23 metres averaging 1.4 grams gold. The Wolverine prospect returned grab samples values of up to 77.1 grams gold.
Only limited drilling has been conducted, and several large gold-in-soil anomalies remain untested.
Freegold also holds the Union Bay platinum group metals project, in southeastern Alaska. Joint-venture partner
Almaden
Freegold also owns a 100% interest in the Almaden gold project, 120 km northwest of Boise, Idaho. In 1997, a feasibility study was completed by Watts, Griffis & McOuat, which outlined a mineral resource of 35.9 million tonnes grading 0.7 gram gold. The gold is recoverable by open-pit heap-leach methods, and the estimated internal rate of return was 18.9% at a US$364 per oz. gold price. Freegold believes the project has excellent potential for reserve enhancement as the deposit is open in two directions and at depth.
International Freegold currently has 48.8 million shares outstanding and 64 million on a fully diluted basis. The junior recently elected to proceed with a 4-for-1 share rollback and a name change. The new company name will be known as
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