Freegold advances Almaden

SITE VISIT

Weiser, Idaho — A buoyant bullion price coupled with past engineering studies has Freegold Ventures’ (ITF-T, FGOVF-O) recently revitalized management team convinced its Almaden gold project in west-central Idaho has serious development potential.

Over more than a decade at Almaden, the company has endeavoured to win over doubters while battling variable metal price trends and skeptics who don’t like the location of the project. The bottom line is that Freegold has delineated a large-tonnage, low-grade gold deposit amenable to heap-leach extraction — not dissimilar to many deposits situated a short distance south, in northern Nevada. Recent additional drill data is being incorporated into a revised resource estimate, due shortly.

Freegold completed well over 10,000 metres in its 2006 drill program aimed at resource expansion and deeper delineation drilling. It also drilled nine large-diameter (PQ) holes to extract representative material for a round of metallurgical testing to include fragmentation, crush-size and gold recoveries.

Some of the company’s recent deep drilling has provided encouragement with holes such as C-37, collared in the southern portion of the deposit, returning a 152-metre intersection grading 0.72 gram gold per tonne, including a 30-metre interval of 1.27 grams gold. Previous drilling only tested mineralization to a depth of about 60 metres in this section of Almaden, hinting at significant potential resource growth.

In mid-2006, the company blasted out about 40 tonnes of mineralized material from three surface pits to undergo lab testing designed to ascertain optimum gold recoveries. Assays from the 39 blast holes averaged about 0.7 gram gold; the company says the results were representative of the project’s overall resource grade.

A new resource estimate, compliant with National Instrument 43-101, was delivered to Freegold in early 2006. Resources are estimated at 22.5 million indicated tonnes grading 0.72 gram gold (about 516,000 contained ounces) plus additional inferred resources of 18.1 million tonnes of 0.62 gram gold (360,000 contained ounces). The study by engineering firm Hatch included extensive data from several hundred drill holes on the Main and North zones of Almaden. Based on the project’s drill density plus the continuous and homogenous nature of the mineralization, Freegold expects to upgrade its resource categorization in the next updated calculation.

Almaden first underwent mining activity in the 1930s by a group tapping the mercury deposit occurring at surface on the deposit. Evidence of this activity remains and was evident during a recent visit by The Northern Miner.

In the 1970s, the project was re-evaluated with the recognition that mercury mineralization can indicate underlying hot springs, or epithermal systems. Such systems can also carry gold mineralization, with the potential to accumulate as significant bodies “pooling” beneath impermeable cap rocks.

A series of exploration efforts by the likes of Homestake, Freeport, Ican (Searchlight), Western States Mining, Hycroft-Granges and Amax from 1980 through 1995 saw some 39,000 metres of reverse-circulation drilling in 651 holes and 26 core holes totalling about 1,900 metres completed on the project. The effort delineated a flat-lying, gold-mineralized body hosted in mid-Tertiary sandstones beneath an opalite cap unit.

Two years after Freegold’s initial option of Almaden in 1995, it completed a feasibility study (based on US$364 per oz. gold) that modelled a 95,000-oz.-per-year, open-pit, heap-leach gold operation with an attractive 0.6:1 strip ratio extracting about 20,000 tonnes of ore daily. Unfortunately, slumping bullion prices countered development plans, resulting in the project being shelved due to unsatisfactory economics.

Geology

The Almaden deposit is situated on the southeastern edge of the Columbia Plateau and is underlain by a sequence of mid-Tertiary Payette formation sediments comprised predominantly of arkosic sandstones, shales and mudstones.

Primary alteration came from a low-sulphidation epithermal hot springs system. Circulating fluids formed a silica-rich opalite cap at surface that pooled subsequent flow beneath, allowing for the concentration of significant amounts of gold and silver mineralization in the permeable underlying sandstones.

Mineralization is controlled by both regional and district-scale structures trending northwest, north-northeast and east-west. Metal deposition is associated with silica flooding and multiple phases of veining and brecciation plus argillic-carbonate alteration.

Gold mineralization is quite fine-grained, tending to be below the 1- to 9-micron size range, occurring as very fine disseminations in the sedimentary units. Almost all of the mineralized zones drill tested to date are oxidized.

Beyond defining a large, bulk-tonnage gold deposit at Almaden, Freegold is also eyeing the potential for a deeper, high-grade feeder-zone at the deposit. The company looks to apply analogies to the Midas gold deposit in Nevada — a mid-1990s discovery that also features surface mercury mineralization above a significant gold occurrence.

The northern Nevada rift zone, host to many of that state’s major gold deposits, is similar in many ways to southwestern Idaho, including common geologic age, structure and mineralogy.

Deep drilling remains an important target for Freegold for both resource expansion and blue-sky high-grade.

In late 2005, Freegold appointed Steve Manz as president. Coming from a geological engineering background, Manz previously served as top financial officer for Royal Oak Mines (ROAKF-O) from its creation and through a series of acquisitions, mergers and financings that propelled the company to mid-tier gold producer status. He was also involved as top officer of New York-listed Atlas Corp., during a period of significant financings, and served as vice-president of the merchant metal firm Gerald Metals.

Soon after his appointment, Manz brought Michael Gross on board as exploration vice-president. An old colleague of Freegold’s newly appointed president, Gross has considerable experience in Idaho, having worked on the revitalization of Hecla Mining’s (HL-N) Lucky Friday silver mine.

Almaden is held under a 100% lease interest by Freegold. The company earned its initial 60% stake by completing exploration programs and a positive feasibility study on the deposit in 1997. It acquired the remaining 40% in 2001 through share issuances and cash payments.

Freegold recently lined up a non-brokered private placement of up to 5.1 million units for gross proceeds of about $2.8 million to finance further drilling at Almaden and its other projects.

Besides its Idaho gold project, the company has been active on its Golden Summit project near Fairbanks, Alaska. Surface trenching has yielded extensive high-grade gold in a number of vein structures in an area of past production. Recent sampling has returned numerous bonanza-grade values including a bulk sample of high-grade vein material designed to generate revenue for continued exploration.

Shares of Freegold have recently risen to a new 52-week high around 75, giving the company a $29-million market capitalization based on its 39 million shares outstanding.