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Prospecting old mine sites Freegold Ventures drills beneath high-grade historical mine site Patricia Jones Petroleum News Contributing Writer
Vancouver, British Columbia-based Freegold Ventures has found significant high-grade gold mineralization at its Golden Summit exploration property about 30 miles northeast of Fairbanks, Alaska, where it has been drilling beneath historical hard-rock gold mines.
Additional work, planned for mid-May and June, will determine whether gold resources on the site could be large and rich enough to warrant its own modern mill complex, or whether it could be developed as a satellite mine site for the neighboring Fort Knox gold mine, the company said April 2.
“Either scenario is a possibility at this point,” said consulting geologist Curt Freeman, owner of Fairbanks-based Avalon Development. “It doesn’t take a lot of capital to bring a small mine into production.”
Freegold, a junior-sized exploration company, will resume diamond core drilling and trenching in April, following up on an “encouraging” winter drilling program completed in March, Freeman said.
Three holes punched 400 feet below the shuttered Cleary Hill Mine — 800 feet below ground surface — yielded high-grade intercepts, including two sections totaling 20 feet with grades of more than 0.2 ounces of gold per ton of rock.
That same hole produced an intercept more than 400 feet thick with an average gold grade of 0.03 ounces per ton, slightly higher than the average grade at Fort Knox, located about five miles away. Drilling develops interest Freegold Chairman and CEO Harry Barr told Petroleum News April 29 that drilling and past trenching work has already generated interest by major mining companies, including three that have signed confidentiality agreements to review the geological data.
Barr said he has also discussed exploration options with several other mining companies, including Kinross Gold, owner of Fort Knox. “Lots of good things came out of the drilling program,” he said.
While he has yet to land a joint venture option for Golden Summit, Barr remains optimistic about the property. “We’re driving ahead ourselves with development,” he said, referring to drilling and trenching planned.
Total exploration spending at the Cleary Hill area will be about $300,000. Freegold’s second phase of work planned involves prospecting high-grade gold vein swarms at other historical mine sites on the 17,000-acre exploration property. Looking at old mines Since 1991, Freegold has spent about $6 million on Golden Summit, a claim block owned in large part by Keystone Mines Partnership, a group of Fairbanksans. Some other land owners are also involved.
Of total property spending so far, less than $500,000 has gone to the Cleary Hill Mine prospects, Freeman said.
Despite its historical production of about 281,000 ounces from 1908 through the start of World War II, when gold mines were ordered closed by the U.S. government, Cleary Hill has “not been on the radar screen,” Freeman said.
“That’s partly because people have been looking for bulk tonnage occurrences — open pit, large scale things. Small occurrences did not fit the corporate strategies,” he said.
But lower gold prices have given such smaller, high-grade deposits a second life, Freeman said. “High grade occurrences give you a better margin. The other thing is the footprint — the capital cost of a large open pit is tremendous compared to small underground mines, so this is within reach of a lot more companies.”
During its life, Cleary Hill’s grade averaged 1.3 ounces per ton of rock, Freeman said, a production statistic gleaned from a number of different historical public information sources. Comparatively, Fort Knox ore averages 0.024 ounces per ton of rock.
Recently recovered mine records show one two-year period of operation at Cleary Hill yielded production grades of 2.35 ounces of gold per ton of rock. (See related story.) Vein swarms repetitive? Gold at Cleary Hill is hosted in quartz veins and quartz stockwork zones in highly altered schists, and mineralization is open along strike in both directions and at depth, according to Freegold’s April 2 news release.
So far, geology work has identified a mineralization trend at least 1,400 feet in width, stretching from the Cleary Hill Mine south to the old Wyoming Mine. Length of the mineralized zone is currently unknown, Freeman said.
Three other historical gold mines on the Golden Summit property are located in a trend running from Cleary Hill east, Freeman said, exhibiting similar types of high-grade vein swarms in a pattern occurring 8,000 feet apart. “There seems to be a control of some sort that we don’t fully understand,” he said.
Cleary Hill was selected over other prospects for the first phase of core drilling in the vein swarms, Freeman said, mainly because the property offers geologists more historical data. “With the old underground workings, it was the most understood of the four, so it carries the least amount of risk,” he said.
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