Fronteer inks strategic alliance with Aussie major

Australia’s AurionGold has entered into a strategic alliance to explore and develop Fronteer Development Group‘s (YFV-V) gold properties in the Red Lake – Birch-Uchi belt of northwestern Ontario.

Under the proposed deal, AurionGold will subscribe to a non-brokered private placement 1 million Fronteer shares at 50 apiece. Of the total proceeds, $250,000 will fund a first phase of exploration on Fronteer’s Balmer, Portage and Sandy Point Properties. AurionGold will also spend another $250,000 on exploration in 2002.

Once the initial expenditures are completed, AurionGold will be grated the option to earn a 65% interest in Fronteer’s properties by spending another $2. 5million on exploration, with at least $500,000 spent per year. AurionGold 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.

AurionGold’s exploration funding during 2002 will go toward regional and property-scale geophysical, geochemical and geological surveying plus drill testing of several high-grade gold occurrences already identified on Fronteer’s properties.

Fronteer will act as operator until AurionGold has earned a 65% interest. At that point, AurionGold can elect to assume project operatorship.

Late last year, Fronteer reported significant results from initial exploration of its Sandy Point property, northeast of Red Lake, Ont. 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 for at least 70 metres southwest of the showing. Further infill soil sampling and ground geophysics are planned, in anticipation of drilling.

Elsewhere in the area, chip samples from the Shanty Bay property include 1.75 metres running 3.4 grams gold, 1.2 metres of 11.43 grams, and 0.5 metre of 7.34 grams. Grab sampling returned up to 9.95 grams gold.

Under a previous option agreement, Talus Ventures (TVV-V) must spend $100,000 on the two properties by August 2002.

Nearby, Fronteer and Glenhaven Ventures (GHM-V) have completed an exploration program on their Birch Lake project, which includes the Swain East, Mink Lake and Grace Lake properties.

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, where 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 about 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 was formed from the merger between Goldfields Limited and Delta Gold, and is one of the largest Australian-based gold producers with annual production of over 1 million ounces.