Fronteer looking for a piece of Olympic Dam in the Yukon

Fronteer Development Group’s (FRG-T, FRG-X) strategy of hunting iron oxide-copper-gold (IOCG) deposits in Canada is bearing fruit in the Yukon.

The company recently announced results from its $6-million 2007 exploration program at the jointly held Wernecke Breccias project. Fronteer, the operator of the project, has an 80% stake while Rimfire Minerals (RFM-V, RMFRF-O) holds the remainder.

Results are from holes drilled at the Hoover deposit and include highlights of 1.84% copper and 0.53 gram gold per tonne over 17.3 metres, and 0.56% copper and 0.16 gram gold over 45.5 metres in hole HV07-27. Drilling also encountered 1.2% copper and 0.48 gram gold over 7.9 metres in hole HV07-26, which stopped in mineralization due to technical problems with the drill.

The company estimates the true width of the intervals at roughly 75% of the stated widths.

Fronteer acquired the property with Rimfire about two years ago, after recognizing it as a potential host to the style of deposit it was looking for.

“We’re trying to leverage our in-house experience on Olympic Dam-style deposits,” says Fronteer’s president and chief executive Mark O’Dea, whose PhD led him to study the IOCG deposit at Mount Isa in Australia.

“We’re looking for terrain in districts with similarity to Olympic Dam-style mineralogy.”

Fronteer theorizes that during the period when the Olympic Dam deposit was formed, the section of the Yukon it is exploring was connected to southern Australia.

“Prior work in the area suggests that similar Olympic Dam-type deposits may have formed in the Wernecke Breccias 1.6 billion years ago, before the two continents were torn apart,” states Fronteer’s website.

While the Hoover deposit itself doesn’t host uranium — unlike Olympic Dam or other areas within the 400-sq.-km Wernecke Breccias — it is shaping into a higher-grade copper-gold deposit with potentially good tonnage, Fronteer says.

The basis of this belief is that mineralization has been intersected in 11 widely spaced drill holes and remains open to the north, south and at depth.

Fronteer and Rimfire acquired Wernecke Breccias from Newmont Mining (NEM-N, NMC-T) and a subsidiary of Breakwater Resources (BWR-T, BWLRF-O) over two years ago. By spending $2 million on exploration in 2006, the companies gained a 100% interest with Newmont retaining a 2% net smelter return royalty.

Newmont spent four years exploring the area, drilling 14,600 metres of core. The geoscientific data it compiled is being studied by Fronteer.

As for Fronteer’s exploration budget for 2008, O’Dea says while results from drill holes are still coming in, he estimates the company will put roughly $2 million into exploration for the year.

With its acquisition of NewWest Gold and its Northumberland project in September, the bulk of Fronteer’s exploration dollars will go to Nevada, O’Dea says. Northumberland has a measured and indicated resource of 2.06 million oz. gold, plus inferred resources of 400,000 oz. gold and 5.11 million oz. silver.

In Toronto on the news, Fronteer’s shares were off 35 to $10.33. Fronteer’s shares have traded between $7.50 and $17.59 over the last 52 weeks with just over 83 million shares outstanding.

Rimfire’s shares were off 6 at $1.62. Its shares have traded between $1.38 and $2.34 over the last 52 weeks with 25.5 million shares outstanding.