Placer picks up Fairbanks ground

Vancouver-based major Placer Dome (PDG-T) has augmented its holdings in Alaska by signing an agreement with Silverado Gold Mines (GOLDF-Q) to purchase the Ester Dome gold property in the Fairbanks district.

Placer signed an option to buy the property through an investment of US$16 million in work commitments and stock. Silverado retains a 15% net profits interest royalty on any future production.

Over the next five years, Placer plans to spend US$10 million exploring Ester Dome: US$1 million will be spent the first year, and annual spending at Ester Dome will increase by US$500,000 in each successive year.

Placer made an initial payment of US$400,000 and will also invest US$5.4 million to buy 4 million shares of Silverado to complete the earn-in of the first 51%.

The balance (49%) can be earned within the following ten years by producing a feasibility study and obtaining all necessary permits for construction of a mine. Placer is subject to certain conditions and can forfeit its option at any time.

The Ester Dome property covers 20.5 sq. miles of relatively unexplored land in the southeastern part of the Fairbanks district of central Alaska.

Previous exploration has located at least two zones of mineralization, named Rhyolite and Ready Bullion.

Silverado will hold onto the easternmost part of the Ester Dome claim block, including the Grant mine and mill. The block lies adjacent to the Ryan Lode gold project, which Silverado is buying from La Teko Resources (LAO-V) for US$12 million over five years. These two properties contain high-grade, low-tonnage mineralization within quartz veins;

Placer, in contrast, is seeking large-tonnage deposits at Ester Dome.

While it still holds a few claim blocks around the Fairbanks district, Placer released the bulk of its holdings (18,000 acres in the north-central part of the district) to International Freegold (ITF-V) late in 1997. Placer retains a 1.5% net smelter return royalty on the property, dubbed the Vanguard project by Freegold.

Placer also owns the multi-million-ounce Donlin Creek gold deposit in southwestern Alaska.