Australian-listed AurionGold has entered into an agreement to explore and develop properties held by
AurionGold will subscribe to a non-brokered private placement 1 million Fronteer shares at 50 apiece. About $250,000 of the total proceeds will be used to explore Fronteer’s Balmer, Portage and Sandy Point Properties.
The Austrialian company will then be granted the option to earn a 65% interest in Fronteer’s properties by spending $2.5 million on exploration. It can boost its stake by 10% by completing a bankable feasibility study, arranging project debt financing and providing a loan to Fronteer for its portion of project financing.
Exploration in 2002 will consist largely of geophysical, geochemical and geological surveys, as well as drill-testing of high-grade gold occurrences.
Fronteer will act as operator until AurionGold has earned a 65% interest. At that point, AurionGold can elect to take over.
Late last year, Fronteer reported significant results from initial exploration of its Sandy Point property, northeast of Red Lake. Twenty-two grab samples returned 1.7-13.8 grams gold per tonne. Results from chip sampling include 1.7 metres grading 12.6 grams gold and 1 metre of 2.6 grams gold.
The property is underlain by late Archean mafic volcanic strata and intercalated magnetite iron formation. The gold mineralization occupies silicified and pyritized axial zones of tight, east-striking folds in the iron formation. Soil geochemistry suggests gold mineralization extends 70 metres southwest of the showing. Further infill soil sampling and ground geophysics are planned, with drilling to follow.
Elsewhere in the area, chip samples from the Shanty Bay property include 1.75 metres grading 3.4 grams gold per tonne, 1.2 metres grading 11.43 grams, and 0.5 metre grading 7.34 grams. Grab sampling returned up to 9.95 grams gold.
Under a previous option agreement,
Nearby, Fronteer and
Rock samples from three copper-gold showings on the Swain East property returned up to 18.6 grams gold per tonne and 3.9% copper. The property is underlain by Archean felsic-to-mafic volcanic rocks. Two showings, North and South, sit in a broad zone of intense chlorite and quartz-sericite-pyrite alteration.
Grab samples from the Mink Lake property, where a 20-metre-wide corridor of quartz-carbonate veining extends for 2.8 km, yielded up to 35.6 grams gold per tonne.
Mapping on the Grace Lake property failed to reveal the source of a coincident magnetic and conductivity anomaly on which the property is centred. Follow-up ground geophysics and modelling are planned.
Under the terms of an option deal, Glenhaven must spend $250,000 on the properties by April 2003. Glenhaven must also pay Fronteer $10,000 in cash and issue 100,000 shares.
AurionGold is one of the largest gold producers Down Under, with annual output exceeding 1 million oz.
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