U.S.REPORT Fairbanks outlining large gold system on Fort Knox

Encouraged by results from this year’s drill program, Fairbanks Gold (VSE) is optimistic of a significant increase in the size and extent of the Fort Knox “porphyry” gold discovery near Fairbanks, Alaska. The discovery is considered to be a possible source of placer gold in the Fairbanks district, the site of major gold rush at the turn of the century. It is owned 51% by Fairbanks, the operator, with the remainder held by Ventures Trident and Bob Nye.

Chairman Eric Friedland said the current US$9.3 million exploration and development program is “proving and expanding one of the largest gold systems in North America.” He also noted that the area of gold mineralization established during last year’s program was increased “by at least 50%” as a result of current drilling.

At the end of the 1989 program, Fairbanks announced a preliminary geological mineral resource in the range of 80-100 million tons grading 0.036-0.047 oz. gold at a cutoff grade of 0.02 oz.

“We’re pleased with the way things have gone so far,” Friedland told The Northern Miner. “We think we may have a mine.”

Results from recent stepout drilling appear to confirm Friedland’s views. Some of the better results from reverse circulation drilling are: 315 ft. of 0.041 oz. gold per ton; 110 ft. of 0.070 oz.; 70 ft. of 0.10 oz.; 410 ft. of 0.029 oz.; 875 ft. of 0.047 oz.; 760 ft. of 0.032 oz. and 760 ft. of 0.032 oz.

The gold-bearing system on the property is now described as being more than 5,000 ft. long and more than 1,600 ft. wide, with the deposit still open in three directions and to depth. The deepest hole drilled so far is more than 1,000 ft. deep, which the company said “remained in gold mineralization to the bottom of the hole.”

This year the company is doing infill diamond core drilling on 100-ft. grid centres to confirm 1989 reverse circulation drilling results while establishing proven reserves.

Results from this drilling also returned some impressive results: including 514 ft. of 0.050 oz. gold; 600 ft. of 0.057 oz.; 614 ft. of 0.034 oz.; 440 ft. of 0.042 oz.; and 500 ft. of 0.057 oz.

In addition, a 170,000-ton bulk sample is now being excavated by open pit mining equipment. A crushing plant and sampling tower are already on site, and should be operational shortly. The property is accessible by road, and near power, water and a skilled labor force.

The bulk sample test, being carried out under the direction of an independent Canadian engineering firm, is designed to determine the average grade of the deposit. It will also provide a sample for metallurgical test work and assist in detailed mine and process design.

In addition to this, the company intends to compare results (with respect to grade) from the bulk sample to that encountered from diamond and reverse circulation drilling.

The results from the bulk sample will no doubt be anxiously awaited as it is recognized that the density of the quartz veining within the intrusive has a relationship with gold grade.

Gold mineralization at Fort Knox occurs within quartz veinlets, fractures and shears hosted within a quartz monzonite/granodiorite porphyry intrusive, similar to that found in the Grass Valley mining district of California. The gold mineralization occurs as free gold, and the intrusive is reported to be oxidized to the current depth of drilling.

The Fort Knox deposit is considered to be similar in nature and character to the large tonnage copper and molybdenum porphyry deposits in British Columbia and elsewhere, except that it contains gold and not base metals.

Fairbanks has other properties in Alaska which it considers prospective for new discoveries of this type. But this year, the company intends to focus its energies on the Fort Knox property to advance it to the feasibility stage.

A preliminary feasibility study is expected within nine months, and a final “bankable” feasibility study is slated for completion in 1991.

These studies will examine the feasibility of open pit mining and a 15,000- to 30,000-ton-per-day milling operation, possibly using the carbon-in-pulp process. Because the deposit outcrops on surface and has favorable topography, the company anticipates a low strip ratio. A year-round operation is envisioned.

Along with the infill drilling and bulk sampling program, Fairbanks has started follow-up work to further define the geological controls of high-grade mineralization.

A number of deep high-grade targets have already been defined for drilling.