It also
drilled nine large-diameter (PQ) holes to extract representative
material for a round of metallurgical testing to include
fragmentation, crush-size and gold recoveries.
Some of the company's recent deep
drilling has provided encouragement with holes such as C-37,
collared in the southern portion of the deposit, returning a
152-metre intersection grading 0.72 gram gold per tonne, including
a 30-metre interval of 1.27 grams gold. Previous drilling only
tested mineralization to a depth of about 60 metres in this
section of Almaden, hinting at significant potential resource
growth.
In mid-2006, the company blasted
out about 40 tonnes of mineralized material from three surface
pits to undergo lab testing designed to ascertain optimum gold
recoveries. Assays from the 39 blast holes averaged about 0.7 gram
gold; the company says the results were representative of the
project's overall resource grade.
A new resource estimate, compliant
with National Instrument 43-101, was delivered to Freegold
in early 2006. Resources are estimated at 22.5 million indicated
tonnes grading 0.72 gram gold (about 516,000 contained ounces)
plus additional inferred resources of 18.1 million tonnes of 0.62
gram gold (360,000 contained ounces). The study by engineering
firm Hatch included extensive data from several hundred drill
holes on the Main and North zones of Almaden. Based on the
project's drill density plus the continuous and homogenous nature
of the mineralization, Freegold
expects to upgrade its resource categorization in the next updated
calculation.
Almaden first underwent mining
activity in the 1930s by a group tapping the mercury deposit
occurring at surface on the deposit. Evidence of this activity
remains and was evident during a recent visit by The Northern
Miner.
In the 1970s, the project was
re-evaluated with the recognition that mercury mineralization can
indicate underlying hot springs, or epithermal systems. Such
systems can also carry gold mineralization, with the potential to
accumulate as significant bodies "pooling" beneath
impermeable cap rocks.
A series of exploration efforts by
the likes of Homestake, Freeport, Ican (Searchlight), Western
States Mining, Hycroft-Granges and Amax from 1980 through 1995 saw
some 39,000 metres of reverse-circulation drilling in 651 holes
and 26 core holes totalling about 1,900 metres completed on the
project. The effort delineated a flat-lying, gold-mineralized body
hosted in mid-Tertiary sandstones beneath an opalite cap unit.
Two years after Freegold's
initial option of Almaden in 1995, it completed a feasibility
study (based on US$364 per oz. gold) that modelled a
95,000-oz.-per-year, open-pit, heap-leach gold operation with an
attractive 0.6:1 strip ratio extracting about 20,000 tonnes of ore
daily. Unfortunately, slumping bullion prices countered
development plans, resulting in the project being shelved due to
unsatisfactory economics.
Geology
The Almaden deposit is situated on
the southeastern edge of the Columbia Plateau and is underlain by
a sequence of mid-Tertiary Payette formation sediments comprised
predominantly of arkosic sandstones, shales and mudstones.
Primary alteration came from a low-sulphidation
epithermal hot springs system. Circulating fluids formed a
silica-rich opalite cap at surface that pooled subsequent flow
beneath, allowing for the concentration of significant amounts of
gold and silver mineralization in the permeable underlying
sandstones.
Mineralization is controlled by
both regional and district-scale structures trending northwest,
north-northeast and east-west. Metal deposition is associated with
silica flooding and multiple phases of veining and brecciation
plus argillic-carbonate alteration.
Gold mineralization is quite
fine-grained, tending to be below the 1- to 9-micron size range,
occurring as very fine disseminations in the sedimentary units.
Almost all of the mineralized zones drill tested to date are
oxidized.
Beyond defining a large,
bulk-tonnage gold deposit at Almaden, Freegold
is also eyeing the potential for a deeper, high-grade feeder-zone
at the deposit. The company looks to apply analogies to the Midas
gold deposit in Nevada -- a mid-1990s discovery that also features
surface mercury mineralization above a significant gold
occurrence.
The northern Nevada rift zone, host
to many of that state's major gold deposits, is similar in many
ways to southwestern Idaho, including common geologic age,
structure and mineralogy.
Deep drilling remains an important
target for Freegold for both
resource expansion and blue-sky high-grade.
In late 2005, Freegold
appointed Steve Manz as president. Coming from a geological
engineering background, Manz previously served as top financial
officer for Royal Oak Mines (ROAKF-O) from its creation and
through a series of acquisitions, mergers and financings that
propelled the company to mid-tier gold producer status. He was
also involved as top officer of New York-listed Atlas Corp.,
during a period of significant financings, and served as
vice-president of the merchant metal firm Gerald Metals.
Soon after his appointment, Manz
brought Michael Gross on board as exploration vice-president. An
old colleague of Freegold's
newly appointed president, Gross has considerable experience in
Idaho, having worked on the revitalization of Hecla Mining's
(HL-N) Lucky Friday silver mine.
Almaden is held under a 100% lease
interest by Freegold. The
company earned its initial 60% stake by completing exploration
programs and a positive feasibility study on the deposit in 1997.
It acquired the remaining 40% in 2001 through share issuances and
cash payments.
Freegold recently lined up a
non-brokered private placement of up to 5.1 million units for
gross proceeds of about $2.8 million to finance further drilling
at Almaden and its other projects.
Besides its Idaho gold project, the
company has been active on its Golden Summit project near
Fairbanks, Alaska. Surface trenching has yielded extensive
high-grade gold in a number of vein structures in an area of past
production. Recent sampling has returned numerous bonanza-grade
values including a bulk sample of high-grade vein material
designed to generate revenue for continued exploration.
Shares of Freegold
have recently risen to a new 52-week high around 75�, giving the
company a $29-million market capitalization based on its 39
million shares outstanding.
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