Northern Freegold confirms Burro Creek gold and silver grades

Vancouver – Northern Freegold Resources (NFR-V, NFRGF-O) completed a 33-hole, 2,565-metre drilling program this winter at Burro Creek in southeastern Mohave County Arizona to get a handle on the project’s potential and verify the accuracy of historical drilling.

The junior focused on the Central Block, the area of most of the 2,000 acre project’s historic work, sinking the majority of holes into the zone. It punched most of the rest into the North Block to assess mineralization beyond the better known Central Block; those results are pending.

Hole 23 hit 47.6 metres grading 0.85 gram gold per tonne and 51.3 grams silver from 22 metres down-hole from near the centre of the zone. Close by, hole 24 returned a shorter 35.7 metres grading 1.11 grams gold and 30.25 grams silver from 15 metres depth, but the intercept included 14.4 metres of 2.32 grams gold and 20.5 grams silver.

Towards the south end of the zone, hole 28 cut 21 metres grading 2.72 grams gold and 43.15 grams silver from just 10 metres depth. Neighbouring hole 30 cut a short, high-grade intercept: 4.6 metres of 7.99 grams gold and 192.72 grams silver. Just 50 metres farther south, hole 26 returned 38.5 metres grading 0.84 gram gold and 48.5 grams silver, essentially from surface.

In the latest set of results, hole 38, collared near the northern end of the central zone, produced 0.94 gram gold and 56.1 grams silver over 51.3 metres. Another 50 metres north, hole 42 cut 1.6 metres at 7.9 grams gold within a broader interval of 8.9 metres grading 1.88 grams gold and 34.12 grams silver.

“The continuity and consistency of gold-silver mineralization over good widths in the system has again been confirmed,” says Northern Freegold CEO Bill Harris, referring to the results.

News of the latest assays at Burro Creek pushed up Freegold’s share price slightly, by 2.5 to close at 50 June 5, but trading volume hit the week’s high at 156,200.

The next step for Northern Freegold, which owns a 100% stake in the property, is to draw up a resource estimate to better reflect the mineralization at Burro Creek. Mineralization is contained within a low-sulphidation epithermal vein system within a fault-shear zone cutting tertiary rhyolite and Precambrian basement rocks.

Burro Creek was fully permitted to start production in the 1980s. Northern Freegold is the first company back on the site since the production decision was indefinitely deferred due to the falling price of gold. Adding to Northern Freegold’s excitement over its recent result is the corroboration between the new drill results and those from two decades earlier. Both consistently turn up concentrations of gold in the 1- to 2-gram range and silver in the 20- to 60-gram range.

Based on the historical results, a 1988 feasibility study estimated that there were 2.57 million tonnes grading 0.85 gram gold per tonne and 31.1 grams silver in Burro Creek’s Central Block.

The historical report proposed that, with gold at US$420 oz., a cutoff grade of 0.57 gram gold, and a recovery rate of 70% for gold and 27% for silver, an open pit could recover 1.2 million tonnes at 1.1 grams gold and 41.7 grams silver with a stripping ratio of 1.34.

Northern Freegold commissioned an updated, National Instrument 43-101-compliant study of Burro Creek last year. As report author Jean Pautler notes in reference to the old study, “Only 50% of the ore resource. . . was used and considered measured, recoverable by open-pit mining methods. . .”

The 1988 parameters calculated a gold extraction cost of US$231.89 per oz. and a rate of return on investment at over 50%. The report envisioned a three-year mining operation with throughput of 400,000 tonnes a year.

In his new report, Pautler also emphasizes that the 1988 plan costed in larger and longer-lasting infrastructure than the size of the recoverable resource would require. The reason is simple: there was confidence not only in the Central Block deposit but in the discovery of more gold and silver in adjacent blocks, as only 305 metres of the discontinuous 1.7-km strike length had been extensively explored.