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Platinum play progresses Freegold’s Union Bay property receives additional funding from major partner for more work this fall; new mineralized zone and claims staked Patricia Jones Petroleum News Contributing Writer
Prospecting for platinum in Southeast Alaska seems to be paying off for Freegold Ventures, as geologists are starting additional work this month on a mineralized area discovered during the summer exploration program at Union Bay.
Freegold, a Vancouver, British Columbia-based junior exploration company, signed a joint venture agreement earlier this year on the company’s Union Bay property with Lonmin PLC, the world’s third largest underground platinum group metals producer.
Lonmin funded this summer’s exploration program, spending $815,000 for mapping, drilling and sampling at Union Bay, located about 35 miles northwest of Ketchikan, Alaska.
Freegold’s President Harry Barr said Lonmin opted to pay for additional work this fall, approving $120,000 more for further prospecting a mineralized zone discovered this summer.
“Typically the big companies don’t add to budgets unless they think something is going on,” Barr told Petroleum News Sept. 17. “I’m very pleased the company added to the budget. Usually it doesn’t happen very often.”
The additional money gives geologists another 30 to 40 days on the property, Barr said. That information, combined with drill data and other geological information gathered this summer, will be compiled into a report that should be released to the joint venture partners in about 60 days, he said. New mineralized area discovered The recently discovered mineralized area, dubbed the Continental Zone, is some six miles west of where this summer’s exploration work was focused, Barr said. The Continental Zone provides a seventh mineralized target on the Union Bay claim block. “It looks very significant, in terms of surface samples,” Barr said. “The Continental is totally a different geological setting” than the other six known mineralized areas at Union Bay.
This summer, crews drilled three holes at the North Zone, according to a Freegold press release. Between eight to 15 diamond core drill holes were punched this summer, Barr said, and about 10,000 feet of samples were taken from four to five known mineralized areas. Notable about samples taken from Union Bay — the deposit is “pure platinum,” Barr said. “That’s unusual in North America, where there is usually a lot of palladium … 60 to 70 percent palladium, with the rest platinum.”
Platinum prices have hovered near the $700 per ounce mark this summer, while palladium recently has sold for less than $200 per ounce. Both are industrial-useful metals.
Exploration crews also increased the size of the Union Bay claim block this summer, Barr said.
A July 14 press release from Freegold said an additional 396 claims were staked in the project area, increasing the size of the existing project by 100 percent. Last spring, Union Bay was described as 6,000 acres in size.
Barr said that the company has funded four rounds of claim staking since the initial block was staked late in 2000. “The size of the property has tripled since the initial staking,” Barr said.
“With a land mass this size, a $1 million budget allows you only to do so much, so we are in the very early stages with this,” he said.
Lonmin’s commitment to keep its interest in the property requires $1 million in annual exploration spending in 2004 through 2006, and $750,000 each year after. Lonmin can earn a 70 percent interest in Union Bay by delivering a full feasibility study, which would outline economic options for platinum production.
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