MINING NEWS: Freegold buys Tolovana gold project

Freegold Ventures Ltd. said June 16 it has entered into an agreement with Nautilus Alaska Inc. that allows it to acquire Nautilus’s rights to a 20 year lease on the Tolovana Gold property in the Fairbanks mining district of eastern Interior Alaska. The lease may be extended for an additional 10 years on the same terms, Freegold said.

The Tolovana Gold property lies southwest of the historic Cleary Hill Mine and will form part of the Golden Summit property under the Freegold/Meridian Joint Venture, Freegold said.

Previous drilling on the Tolovana property “intersected high grade gold values in intrusive and associated metamorphic rocks. An extensive hydrothermal system is present on the property with mineralization open to the east, west and to depth,” Freegold said.

Exploration is expected to begin within the next month.

Under the terms of the agreement Freegold will assume all of Nautilus’s obligations under the lease, which include making annual payments of $1,000 per month for first 23 months, increasing to $1,250 per month for months 24 to 48, and increasing to $1,500 after the 49th month and for duration of the lease, Freegold said.

The property is subject to a sliding scale NSR as follows: 1.5 percent NSR if gold is below $300, in the event the price of gold is between $300-$400 a 2.0 percent NSR is in effect.

In the event that the price of gold is above $400, the property is subject to a 3.0 percent NSR.

In addition, Freegold made a payment of $7,500 on signing and will issue 400,000 shares on regulatory approval and an additional 200,000 shares within 30 days of a minimum 200,000 ounce mineral resource being calculated on property. This clause is in effect for a period of five years from the date of the agreement, Freegold said.

The agreement is subject to regulatory approval.

Cleary Hill results

The six holes were aimed to “intersect the down dip extension” of the Cleary Hill Mine.