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March
2, 2007, (Vancouver, BC) -- Freegold Ventures Limited ("Freegold")
announces that it has entered into a Mining Exploration Agreement with
Option to Lease with Doyon Limited, an Alaskan Native Regional
Corporation, to option Doyon's 100% interest in the Vinasale Gold
Property. The Vinasale project is located 16 miles south of McGrath in
central Alaska and covers an area of approximately 128,000 acres.
Vinasale is located in a northeast trending belt of igneous
intrusion-related deposits that include the 33 million oz Donlin Creek
deposit and the operating Nixon Fork gold mine.
Significant
gold mineralization was first discovered at Vinasale by Central Alaska
Gold Company (CAGC) in 1990. Subsequent drilling by CAGC and then
joint venture partner Placer Dome established an initial gold resource of
614,000 oz (10.4 million tons @ 0.057 oz/ton). While the gold
mineralization was found to be refractory, metallurgical testing showed
that 95% of the gold reported to the flotation concentrate, thereby
considerably reducing the volume of material that would need to be
processed in order to recover the gold. The property was
subsequently optioned by ASA-Montague in 1994 and additional soil
sampling, followed by limited in-fill and expansion drilling was
successful in further increasing the gold resource to 920,000 oz (18.04
million tons @ 0.051 opt) based on the 36 holes that had been drilled into
the Central Zone. (Note that these resource figures are historical
in nature and are provided for informational purposes only. They are
not 43-101 compliant, and as such should not be relied upon.)
Previous wide-spaced drilling northeast and south of the known deposit
indicates these areas may have potential for resource expansion while
previous limited reconnaissance work has indicated that additional gold
mineralization exists on the property outside the area known to contain
resources.
The
main objective of Freegold's program will be to expand the current
resources and test other areas on the property that may have the potential
to host additional resources.
Initial programs will include geological mapping, sampling and
geophysical surveys. Freegold
will also be collecting new samples for further metallurgical testing.
This test work will be conducted under the supervision of
Freegold's new VP of Project Development, Jeff Woods, who has considerable
experience in the metallurgical testing of refractory deposits and in the
design, construction and operation of numerous refractory processing
plants.
Exploration/Lease
Agreement with Doyon Limited.
Under
the Exploration Agreement, Freegold must make cash payments of US$320,000
(US$50,000 first year) over five years, make annual scholarship donations
of US$10,000, and make exploration expenditures totaling US$4,750,000
(US$300,000 first year). Freegold may at its option enter into a one year
extension by making an additional cash payment of US$100,000 and incurring
an additional US $1,500,000 in exploration expenditures. In the event the
property is reduced by 50% or more the additional exploration expenditures
shall be reduced to US $1,000,000.
Freegold
may enter into one or more Mining Leases with Doyon on lands on which it
has expended at least US$600,000, carried out at least 10,000 feet of core
drilling, and submitted a pre-feasibility study. Freegold will be
required to make advance royalty payments and continue to conduct minimum
exploration expenditures on leased lands until such time as a Board
approved positive feasibility study has been delivered. Advance
royalty payments shall be US $100,000 per year during the initial
five-year period, increasing to US$250,000 per year thereafter. The
minimum mandatory exploration expenditures shall be equal to the greater
of US$25/acre or US$250,000 for each of the first five years, and
US$50/acre or US$500,000 in subsequent years. Upon submission of a
Board approved feasibility study Doyon will have the right, for a period
of 180 days, to acquire a minimum 5%, and a maximum 10% participating
interest in Freegold's interest. Within 60 days of Doyon electing to
participate, Doyon shall contribute to a joint venture an amount equal to
2.25 times Doyon's proportionate share of Freegold's cumulative
expenditures on the leased area after the Effective Date of the Lease.
Following the expenditure of such funds, each party will be required to
contribute its pro rata share of further expenditures.
Upon
commencement of commercial production, Freegold must pay Doyon a royalty
on the production of precious metals equal to the greater of a 2 % net
smelter return (NSR) or a 10% net profits interest (NPI). Once
payback has been achieved the royalty shall increase to the greater of a 4
% NSR or a 20 % NPI. Royalties on base metals production shall be the
greater of a 1 % NSR or a 10% NPI pre-payback and the greater of a 3 % NSR
or a 20 % NPI post-payback. For each lease agreement, Freegold will
make ongoing scholarship payments of US$25,000 per year, which shall
increase to US$50,000 per year upon the commencement of commercial
production.
The
Qualified Person for this release is Michael P. Gross, M.S., P. Geo., VP
Exploration, Freegold Ventures Limited.
About
Freegold Ventures Limited
Freegold
Ventures Limited is a North American exploration company with a new
management team experienced in mine development and production that is
actively exploring advanced-stage gold projects in Idaho (Almaden) and
Alaska (Golden Summit). Freegold holds a 100% lease interest in the
Almaden gold project in Idaho. This large tonnage, disseminated,
epithermal gold deposit was the subject of a feasibility study in 1997
calling for the development of a 95,000 oz/year open pit, heap leach mine.
Freegold is currently in the midst of a 34,000-foot drilling program aimed
at further expanding the size of the resource prior to updating the
feasibility study in 2007. Freegold has also discovered new
high-grade veins in surface trenching at its Golden Summit project outside
Fairbanks. A 10,000 ton bulk sample has recently been collected that
will be processed in the spring of 2007, and a 25,000-foot drill program
to further delineate gold mineralization within the current 1,000 foot
wide by 3,500 foot long vein swarm commenced in December. In excess
of 7 million ounces of gold has historically been recovered from the
Golden Summit property, which is located less than 5 miles from the Fort
Knox mine, Alaska's largest gold mine.
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