Media

February 22, 2007

Freegold Ventures Will Take Full Advantage Of Rising Gold Price

When Steve Manz took over as chief executive of Freegold Ventures towards the end of 2005 he described its Almaden gold project in Idaho as a diamond in the rough. Since then he had been doing a fair bit of polishing and this project may not be that far away from development. In fact a feasibility study was carried out on it back in 1997, but then along came Bre-X and knocked the junior mining sector on the head and there was no follow-up. Now Freegold is carrying out a 34,000 foot drill programme aimed at boosting the resource to over 1 million ounces by testing areas that remain open at depth and along strike.

The mineralization is hosted in a classic hot springs-style epithermal setting which  may be the upper part of a deep-seated hot springs system with potential for bonanza grade quartz vein-hosted gold-silver mineralization similar to that being mined at the Ken Snyder (Midas) mine in Nevada.

As a result it is likely that  this mineralization will continue well below the 200 ft depth previously drilled and this is proving to be the case. In fact no deep drilling has ever taken place and  the programme is now aimed at seeking higher-grade mineralization  in discrete zones under the main deposit.  The current indicated resource  is 22.48 million tonnes grading 0.65 g/t gold for some 515,134 ounces of contained gold, plus another 359,802 contained ounces of gold in an inferred resource of around 18 million tonnes grading 0.56 g/t gold, so it would be nice to blend in some higher grades. 

In December Freegold reported  additional assay results from this  expansion drill program which continued to confirm depth extensions of resource-grade mineralization in the southern portion of the Main Zone below the level of the pit designed in the  1997 feasibility study. Assays from in-fill drilling, on average, are also exceeding the gold grades found in previously drilled neighboring holes.The first six holes of the program, totaling 2,990 feet, were large diameter core holes designed to test areas of known gold mineralization and recoveries throughout the mile-long deposit. These holes are part of an ongoing metallurgical testing program  to help determine the optimal relationship between fragmentation, crush size and gold recovery for the project. Assays from the first four of these holes were reported last October and one of them extended the depth of known resource-grade gold mineralization from 200 feet to 500 feet below surface in the southern portion of the deposit.

The previous  study was based  on a 22,500 tonnes/day open pit, heap leach operation producing  around 95,000 ounces of gold/year. The fact that the mineralisation occurs in flat lying, tabular, disseminated deposits beneath a thin impermeable opalite cap rock  means that  the overall strip ration should be no more than 0.6 to 1 which will put a useful restrain on costs. Tests carried out by the present team at Almaden confirm that heap leach is a viable option so the new feasibility study should  come up with some attractive figures in view of  higher ore grades and a considerably improved gold price. It would not be wise to anticipate development in very short order as environmental requirements could take a couple of years, but re-scoping following the new resource estimate accompanied by more infill drilling could increase the size of the project.

Meanwhile over at the Golden Summit project, which is only 5 miles away from Fort Knox which is  the largest gold mine in Alaska,  drilling is in progress to delineate new veins and shear zones encountered in surface trenching.  The project contains a number of past producers  and the area around the Cleary Hill mine is the focus at the moment as the Cleary Hill vein  was the source of approximately 280,000 ounces of gold production at an average grade of 44.6 g/tonne  in the early 1900s. Last year Freegold not only discovered a new 1,300 foot eastern extension of the Cleary Hill vein but,  more importantly,  found  that extensive bleeding of gold mineralization, via smaller quartz vein splays and horsetails into both the hanging and foot wall rocks, resulted in the formation of mineralised zones up to 100 feet wide.

Golden Summit may therefore  have the potential to host bulk tonnage gold mineralization in addition to high-grade gold mineralization. Current  shallow drilling is taking place in three closely spaced parallel lines to test for gold mineralization through the Cleary Hill vein system and the swarm of veins and shear zones that run subparallel and immediately south of it. The interesting thing is that  the Fort Knox mine is due to run out of feed for its 40,000 ton mill in 2010, so Kinross  will be watching the progress of  this exploration programme with interest and may come knocking on Steve Manz's door before long.