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Steadily falling snow in late September and a quiet equipment yard at the Golden Summit project didn't dampen Michael Gross' enthusiasm. He's the vice president of exploration for Freegold Ventures and a moving force behind the company's recent, rapid advancement of its Fairbanks-area gold property.
"There's so much more potential here than what I imagined when looking at the data a year-and-a-half ago," said Gross, during a tour of Golden Summit, a large claim block that has been explored by the Vancouver-based junior exploration company for nearly 20 years. "It has amazed all of us--how widespread the gold mineralization is ... much more than what we thought last fall."
Despite a long history of working Golden Summit, sometimes with partners and sometimes going it alone, Freegold has changed the focus and mode of work recently, thanks to new corporate management with a different view of the property.
Gross and Steve Manz, named president of Golden Summit about two years ago, are part of the new plan for the Fairbanks-area property, as well as Freegold's other properties in Alaska and a well-defined gold project in Nevada.
At Golden Summit, the focus is still on exploration, but with a twist to the traditional methods of drilling diamond core or reverse circulation holes and plugging the data into a geological model.
The company is using a smaller-sized drill rig, a rotary air blast unit, to complete shallow, closely spaced drilling sections, called fences--work designed to identify and trace high-grade gold zones for bulk sampling.
KEEP IT HERE
But instead of collecting piles of rock and sending it to Outside laboratories for treatment, Freegold decided to do the analysis on-site. Independent, initial laboratory tests completed last year indicated that Freegold could expect to achieve 70 percent to 79 percent recovery of gold from its host rock through simple crushing and gravity processing.
Crews began last year assembling some bulk sample piles for processing, with plans to run the material through a sluice box, a separation method combining water and gravity that is commonly used by placer miners.
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"We ran out of weather (for sluicing) so we kept digging and creating stockpiles," Gross said. "Over the winter, we decided that rather than sluicing the piles, we could set up a process to gain a better rate of recovery."
Freegold found a used Knelson concentrator and some other used and new equipment. A self-contained, modular and portable gravity plant that incorporates four Knelson concentrators was designed, built and shipped up to the Fairbanks area project this summer. The equipment was set up at the Golden Summit property, located about 25 miles northeast of Fairbanks and less than a dozen miles from the Fort Knox gold mine.
In its current configuration, the plant can process up to 1,200 tons of gold-bearing rock a day, extracting valuable gold without using chemicals. With the addition of more crushing equipment anticipated to be acquired and added to the processing circuit next year, that throughput rate could increase to 2,000 or even up to 4,000 tons per day, Gross said.
But throughput is not the main goal with this operation, even though the economics of recovering gold are quite attractive with current market prices at more than $700 per ounce.
ACCURACY COUNTS
Instead, the key recovery of the company's bulk-sampling program will be mining accurate geological facts from the exposed mineralized zones. Last year's summer exploration program highlighted the need for bulk sampling, Gross said.
The company began trenching from a historical mine shaft, following the mineralized zone of rock, with plans to dig a total of 3,500 lineal feet. Gross said he called his boss the second day of the project, saying he had good news and bad news.
The planned trenching program would not be adequate to follow the anticipated 5-foot-wide mineralized zone, Gross said.
"That's because the trench was 30 feet wide and we were still hitting mineralization in the walls."
Golden Summit contains complex swarms of high-grade gold veins intersecting in a variety of structures, with lower-grade shear zones surrounding. Some of the high-grade veins have already been tapped by underground drift mining in the early to mid-20th century. The Cleary Hill underground mine, which was the largest hard-rock gold producer in the Fairbanks Mining District during the 1920s and 1930s, is located on Golden Summit and current exploration work has encountered remains of those underground workings.
Bulk sampling the mineralized zones will provide more accurate understanding about the geological setting, enabling geologists to use that information to establish a model for exploration at other targets on the claim block, Gross said.
In addition, bulk sampling will reveal more about the characteristics and grade of both the high-grade veins and the lower-grade shear zones; information that sometimes was previously less accurate because of dilution in drilling samples.
Bulk sampling and the on-site gravity processing also will allow Freegold to establish a history of information about the recovery characteristics of the high-grade and the lower-grade mineralization, Gross said.
OPTIONS OPEN
While that recovery information could be valuable in the future if a mining company is brought into the exploration project, that very traditional method of advancing Golden Summit is not the only option for Freegold.
"We have to look at what would be the best deal for the shareholders," Gross said. "Between us (new Freegold management), we have the experience to put this into production ... we've been involved in a lot of start-ups in the last 30 years."
Typically, junior exploration companies complete initial exploration on mineral projects, weeding potentially productive projects from uneconomic properties. Advanced exploration, development and production work usually occurs once a project is vended to a major mining company.
"We're not married to the idea that we will develop it ourselves, but also we're not married to the idea that we have to finance a big project or sign with a major," Gross said. "Maybe we can bootstrap it up, instead of having a major financing."
Gold recovery from the bulk sampling could help with that effort. How much gold will be recovered has yet to be determined, although Gross hopes it will lift the project into a break-even position. Cash generated after costs will help Freegold continue exploration on the property, drilling the deeper core holes needed to test the depth of the known mineralization.
Under the state and federal permits issued in mid-July for the bulk sampling and gold processing at Golden Summit, Freegold can collect and process up to 108,000 tons of mineralization per year for five years. The permits also cover Freegold's water usage, tailings storage and site reclamation requirements for the sampling and processing program.
Installation and commissioning of the processing plant was completed in early September. During the Sept. 25 tour, processing equipment sat idle, as mechanics were installing a new bearing in the crusher. Snow blanketed the area, a reminder that the water-based gold processing plant would soon experience freezing temperatures in Interior Alaska.
With an initial capital investment of about $1.5 million for the processing plant, Freegold hopes to soon recover that cost.
"Even if the bulk sampling doesn't work, we've got a whole lot of experience and knowledge about the property for a minimal expense," Gross said.
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