High-grade hits at Long Canyon for Fronteer

VANCOUVER — Fronteer Gold’s (FRG-T) Long Canyon project in Nevada is churning out long, high-grade gold intercepts as six drill rigs work to complete a 70,000- metre drill program in the run-up to an initial economic assessment.

Long Canyon is home to an oxide gold deposit that already carries 12.2 million measured and indicated tonnes grading 1.71 grams gold per tonne plus 10.4 million inferred tonnes averaging 1.65 grams gold, for a combined gold count of 1.2 million oz. But recent drilling aimed at expanding the resource along strike to the northeast is returning stellar results.

In the latest set of results, hole 577 returned 12.3 grams gold over 50.4 metres, starting 91 metres downhole and including 20.9 grams gold over 23.5 metres. Hole 568 cut 49.2 metres grading 6.31 grams gold, starting 82 metres downhole. And hole 591 hit 32.9 metres averaging 7.31 grams gold, starting just 26 metres downhole. Other promising intercepts from the latest set of results include 28.5 metres of 7.21 grams gold, 26.2 metres of 4.4 grams gold, and 23.5 metres averaging 4.86 grams gold.

The previous set of results also included some significant hits, such as 39.3 metres of 10.46 grams gold in hole 556, 38.1 metres averaging 6.35 grams gold in hole 548, and 42.7 metres carrying 5.15 grams gold in hole 541.

Fronteer has six drill rigs turning at Long Canyon and plans to continue drilling through the winter.

Once the 2010 drill program is complete, the company plans to embark on another 10,000-metre program, which will kick off the 75,000-metre effort planned for 2011.

Fronteer expects to spend $20- $25 million at Long Canyon next year, with plans to complete a preliminary economic assessment, initiate permitting activities, finish two resource estimates, and start feasibility studies.

Long Canyon is particularly exciting for Fronteer because the company just consolidated ownership of the project by buying AuEx Ventures, which held a 49% stake. Fronteer paid 0.645 of a share, 66¢ in cash, and half a share in a new company for each AuEx share, in a deal valued at $267.6 million. Fronteer also came away from the deal with a 9.9% stake in the new company, which is called Renaissance Exploration.

With its ownership solidified, Fronteer now wants to move Long Canyon to the prefeasibility stage as quickly as possible. The partners spent $14 million on the project in the first nine months of 2010, on top of $12 million spent to buy the Big Springs Ranch. The ranch purchase included 151.7 sq. km of surface rights, nearly all of the water rights in the area, and mineral rights that had been held by the ranch.

Fronteer is also advancing two other gold projects in Nevada, as well as a copper-gold project in Turkey and a uranium project in Labrador.

In Nevada, the Sandman project is a joint venture with Newmont Mining (NMC-T, NEM-N), which is in the last year of a three-year, $14-million effort to earn a 51% interest. The major must also produce a feasibility study and make a production decision. The project is a high-grade, epithermal gold system with four known deposits.

The Northumberland project, also in Nevada, is a large Carlinstyle gold deposit where Fronteer is spending $8.6 million this year.

The company wants to develop a combined underground and open-pit mining operation at the site, with an underground mine selectively mining the higher-grade sulphide resource while the open pit taps into the oxide and transition resources. Fronteer recently kicked off construction of a 280-metre decline intended to aid sulphide exploration and then provide access for the underground mine.

In Turkey, Fronteer and its 60% joint-venture partner Teck Resources (TCK. B-T, TCK-N) recently pulled the longest mineralized intercept to date from the ground at the Halilaga project: 646.5 metres grading 0.26 gram gold and 0.33% copper, starting from surface. Based on that result, the partners added a third drill to Halilaga and anticipate completing an initial resource estimate by year-end.

Fronteer’s share price has performed well over the last year, rising from below $4 to a recent 52- week high of $9.84. On news of the latest results from Long Canyon, the company gained 23¢ to close at $8.97. Fronteer has 150 million shares outstanding.