Partners release encouraging results from Gil gold project

Second phase of drilling released for Fort Knox Alaska area gold resource; mineralization seems to be holding up

Patricia Jones

Petroleum News contributing writer

Partners in the Gil gold project northeast of Fairbanks, Alaska, some six miles east of the operating Fort Knox gold mine, have released “encouraging” results from the 2003 second phase program in early 2004.

In two press releases, one on Jan. 8 and another on Jan. 20, junior partner in the project, Teryl Resources, released drill intercepts taken from the property during the fall 2003.

The drilling was part of an additional or second phase of exploration for the gold project, which, if found to be economically feasible, could provide additional feedstock for the neighboring Fort Knox gold mine.

“The Gil is a relatively small satellite deposit at the moment, but it has upside potential. The drilling results that were released have some good hits and they give us a number of targets for follow up. We’ve seen some encouraging results at the deposit, but they will require future confirmation,” Lorna Shaw, spokeswoman for Fairbanks Gold Mining Inc., told Petroleum News Jan. 21.

Fairbanks Gold Mining, the operator of the neighboring Fort Knox gold mine and mill, is a subsidiary of mining giant and Toronto, Ontario-based Kinross Gold, the major partner and operator of the Gil project.

In production since late 1995, Fort Knox churns through more than 17 million tons of rock to produce more than 400,000 ounces of gold per year. One satellite deposit — True North — has been tapped to provide additional feedstock for Fort Knox.

“The numbers they got out of Gil are pretty good. The thing is holding together,” said Curt Freeman, Teryl’s consultant in the Fairbanks area. “Each time they update the drilling, the project seems a little more assured that Gil will be the next pearl on the string.”

Company updating model

“It then becomes an economic decision whether to proceed with development. The model isn’t finished yet, and our future exploration plans for the project hinge on completion of the modeling exercise and a pre-feasibility study,” Shaw said. “As the results from this past summer’s exploration are modeled, the exploration plans and budget are being set for the upcoming season.”

Teryl’s president, John Robertson, said he is waiting for a budget and detailed plans for 2004, and to see how much his company’s 20 percent share will cost. Some of that work will include engineering studies that would estimate the cost of putting in a road from the Gil prospect to the Fort Knox mill, he said.

“It’s pretty encouraging assays they’re getting on the Main Gil,” Robertson told Petroleum News Jan. 20. “We’re quite enthused about the results. They seem to be better all the time.”

Work last year focused on the Main Gil mineralization, Robertson said. Encouraging results from the North Gil zone and the Sourdough zone may warrant additional work in those areas, he said.

Detailed assay information

Best results came from a 135 foot intersection that assayed 0.087 ounces of gold per ton of rock. Included in that interval was an 85 foot section of 0.121 ounces of gold per ton of rock.

That drill intercept provided some of the deeper mineralization reported in the Jan. 8 release. But some of the assays showed significant mineralization just below the surface.

A 10 foot section, grading 0.155 ounces of gold per ton, was found 25 to 35 feet below surface. Some of the assays showed mineralization at surface, indicating a deposit with little overburden or waste rock to remove.

Most of the past drilling at Gil indicates a relatively shallow level of mineralized rock. Robertson said work in 2003 indicated a zone of mineralization at the Main Gil that is 3,000 feet in length and 70 feet thick.