Freegold Ventures` Golden Summit Project

North American mining giants such
as Newmont, Barrick, Placer Dome
and Freeport McMoran are burning
through their reserves by producing
by Leonard Melman
many million ounces of gold per
_______________
year—and those reserves must be replaced in order for their companies
Massive area-wide forest fires
to remain in operation.
left the air near Fairbanks, Alaska
Given these realities, Freegold’s
looking like a London fog and
strategy has been to
smelling like the
acquire as many ore
residue of a fireplace
bodies as possible.
late this August as I
They have been focusleft the airport on a
ing on bringing into
recent visit to Freetheir portfolio those
gold Ventures Ltd.
locations that have
However, the poor
the potential to bevisibility did little to
come “elephants”—
dampen my interest
that is, mining propin exploring this area
erties holding rethat is so rich in minsources sufficiently
ing history.
large enough to be atJunior
mining
tractive to those gicompanies appear to
ants seeking to rehave three important
place their dwindling
factors working in
reserves.
their favor in this
While some juniors
general time frame.
attempt to move toFirst, the ability of
gold to hold near the Curt Freeman, Senior Geologist for Freegold, talks to a group about the Gold- ward early production
$400 per ounce level en Summit Project.
—Photo courtesy of Freegold Ventures Ltd. of high-grade areas to
Freegold Ventures’
Golden Summit Project
has made many ore bodies attractive
that were potentially unprofitable
with gold at or below $300 per ounce.
Second, South Africa is becoming an
increasingly difficult place to operate for the capital-rich South African
mining giants who are now looking
to shift their capital and operational
expertise elsewhere. Third, the
(Left) Trench sampling at Golden Summit. (Right) A view of the Union Bay project location.
—Photos courtesy of Freegold Ventures Ltd.
ICMJ’s PROSPECTING and MINING JOURNAL/October 2004
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29
well as examination of core samples
at the company core shack located
just outside of Fairbanks.
The project is located in the history-rich Fairbanks Mining District,
which has witnessed various mining
operations for over a century. Placer
operations began
near the turn of the
last century and
approximately ten
million ounces of
placer gold were
recovered by 1964.
Two thirds of that
amount was found
in streams draining the Golden
Summit area while
the remaining one
third came from
the Ester Dome region to the south.
In addition to placer operations, some
538,000 ounces of
lode gold was produced in the region
between 1902 and
1980. The area
then remained relatively inactive until the Fort Knox
main focus of my visit, and the trip mine was opened in 1996, with total
included briefings from corporate ex- production from that mine now nearecutives and geologists, visits to ex- ing three million ounces of gold.
Fort Knox’s operations are of parploratory trenching in various parts
of Golden Summit, inspection of the ticular interest to Freegold’s future
nearby Fort Knox mine and mill, as plans. Fort Knox is currently producing approximately 350,000
ounces of gold per year. At that rate
their ore body will become seriously
depleted over the next several years,
barring new and major discoveries
on their properties. As the time of depletion draws near, excess capacity
will develop at the milling plant and
Freegold may be able to have their
low-grade ore processed at Fort Knox
on a fee basis. This would eliminate
the enormous capital cost of building
an entirely new milling operation to
process low-grade ore—and the cost
of building large scale mills is significant indeed. When the Fort Knox
mine and mill were brought into production about a decade ago, the total
development costs were in the area
of $350 million.
According to Peter Dasler, vice
president at Freegold, plans are in
the works to develop both low- and
(Left) Trench sampling at Golden Summit. (Right) A view of the Union Bay project location.
high-grade reserves at Golden Sum—Photos courtesy of Freegold Ventures Ltd.
mit. The lower grades would be
raise capital, and others acquire
large amounts of debt to fund exploration and pre-development, Freegold’s plan has been to raise modest
amounts of capital, acquire as many
potential ore bodies as possible and
then seek out joint venture partners
who will fund the
exploration expenses needed to prove
up a quality ore
body—giving
up
the rights to some
portions of the
properties in the
process. Their specific goal is to prove
up at least three
million ounces of
drill-indicated reserves over the next
three years.
Freegold’s list of
properties includes
locations in Idaho,
Yukon Territory
and the province of
British Columbia
with the greatest
number of properties to be found in
Alaska. Projects
there include the
Golden Summit, Rob, Rainbow Hill
and Union Bay. The first three are
primarily gold projects, while Union
Bay involves the platinum group
metals (PGMs).
Freegold has partnered with
30
Meridian Gold at Golden Summit,
northeast of Fairbanks, while Lonmin PLC has joint ventured with
Freegold for exploration at the Union
Bay Project in the southern Alaskan
panhandle.
Golden Summit Project was the
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ICMJ’s PROSPECTING and MINING JOURNAL/October 2004
processed as a heap-leaching operation, trucking the ore a few miles to
the Fort Knox mill for processing,
while Meridian would build a
smelter/refinery plant to process
higher-grade ore bodies on site.
Golden Summit contains several
areas of particular interest including Cleary Hill, Hi Yu, Tolovana and
Dolphin. Freegold recently completed trench sampling at Tolovana in
order to prioritize drill targets for a
program set to begin in late summer
or early fall of 2004. Previous drilling
ICMJ’s PROSPECTING and MINING JOURNAL/October 2004
at Tolovana intersected high-grade
gold values in intrusive and associated metamorphic rocks. The extent
of this mineralization is as yet unknown, but it bears striking similarity to mineralization at nearby Fort
Knox.
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31
Cleary Hill was the Fairbanks
District’s largest lode gold producer with 281,000 ounces of gold recovered from ore that graded an average of 1.3 ounces per ton. The
mine was closed down in 1942 by
the War Production Board and there
has been no production since that
time. Freegold performed trenching
exploration during 2002 that intercepted multiple shear zones and
veins with grades as high as 12.5
ounces per ton. Drilling operations
in early 2003 and 2004 also intercepted multiple shear zones of lower grade ore. Additional step-out
drilling is planned.
Union Bay, in southern Alaska, is
Freegold’s major PGM project and is
joint ventured with major platinum
producer Lonmin PLC. Results of a
drilling program in 2003 suggest that
the Union Bay project has the potential to host significant accumulations
of platinum group mineralization.
Lonmin’s joint venture agreement
calls for them to expend a minimum
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of one million dollars per year in
2004, 2005 and 2006, with an additional $750,000 each year thereafter.
Based on preliminary explorations, Freegold’s other two Alaska
properties, Rainbow Hill and Rob
Project, appear to be in favorable geological areas and plans for further
development work are being formulated.
In keeping with their expansion
plans, Freegold Ventures continues
to acquire additional properties.
During the early summer of 2004,
they entered into an option agreement whereby they may earn a
100% interest in the Grew Creek
Gold Project located in Canada’s
Yukon Territory near the town of
Ross River in one of the coldest regions in all of North America. The
project is located less than one mile
from a major highway and is close
to the Whitehorse power grid. Some
resources have already been identified at the project and a ten-hole
diamond drill program is now underway.
Shortly following the Grew Creek
announcement, Freegold also acquired a 100% staking interest in 400
claim units in the Kinesian area of
northern British Columbia. A British
Columbia Survey map released in
January 2004 identified the area as
being prospective to host Eskay
Creek type VMS deposits. Eskay
Creek remains one of the most notable ore body finds in Canadian mining history.
Their remaining major property is
the Almaden Gold Project in Idaho,
where a feasibility study indicated a
potentially mineable resource of 44
million tons of ore grading at 0.021
ounces per ton. The study indicated
more than 500,000 ounces of gold was
recoverable through open pit mining
and heap leach technology. When the
study was completed in 1997, the
price of gold was too low to justify the
expenditures required to bring the
project to life, but at current gold
prices near $400, Freegold has begun to actively seek a joint venture
partner.
_______________
Freegold welcomes your questions
or comments via email at: spiros@
freegoldventures.com or visit: www.
freegoldventures.com
Drop in and visit our Quartzsite store at 980 West Main in Quartzsite, Arizona!
32
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ICMJ’s PROSPECTING and MINING JOURNAL/October 2004