Fronteer looking for piece of Olympic Dam in the Yukon

Fronteer Development Group‘s (FRG-T) strategy of hunting Iron oxide-copper-gold (IOCG) deposits in Canada is bearing fruit in the Yukon.

The company announced results from its $6 million 2007 exploration program at its jointly held Wernecke Breccias project. Fronteer has an 80% stake and is the operator while Rimfire Minerals (RFM-V) holds the remaining 20%.

Results are from holes drilled at the Hoover deposit and include highlights of: hole HV07-27 1.84% copper and 0.53 grams per tonne gold over 17.3 metres, and 0.56% copper and 0.16 gram per tonne gold over 45.5 metres, and 1.20% copper and 0.48 grams per tonne 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 mineralized zones to beroughly 75% of the stated widths.

Fronteer acquired the property with Rimfire roughly 2 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 lead 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 the section of the Yukon it is exploring was once connected to southern Australia in the period when the Olympic Dam deposit was formed.

“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,” Fronteer states on its website.

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

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

Fronteer and Rimfire acquired the land from Newmont Mining (NEM-N, NMC-T) and a subsidiary of Breakwater Resources (BWR-T) 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 (NSR).

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

As for Fronteer’s exploration budget for 2008, O’Dea says while results from more drill holes still need to come 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 exploration dollars will go to Nevada O’Dea says. Northumberland has a measured and indicated resource of 2.06 million oz. of gold, and inferred resource of 400,000 oz. of gold and 5.11 million oz. of silver.

In Toronto on Jan. 9 the day the news was released Fronteer’s shares were off 35 to $10.33 on roughly 170,000 shares traded. Fronteer’s shares have traded between $7.50 and $17.59 over the last 52 weeks and it has just over 83 million shares outstanding.

Rimfire’s shares were off 6 to $1.62 on nearly 8,000 shares traded. Its shares have traded between $1.38 and $2.34 over the last 52 weeks and it has 25.5 million shares outstanding.