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By Patricia Liles
Mining News Editor 

Freegold Ventures acquires Yukon property

Company signs option on Grew Creek Gold Project, plans August drilling


Last updated 8/8/2004 at Noon

Long-time Alaska prospector Freegold Ventures has ventured across the border into the Yukon Territory, optioning a gold property west of Ross River with a previously drilled, 221,000 ounce gold and 835,000 ounce silver resource.

In a July 14 press release, Freegold Ventures said it signed an option agreement to earn a 100 percent interest in the Grew Creek Gold property, 35 kilometers (21.7 miles) west of the historical mining town of Ross River in the southeastern part of the Yukon Territory.

The Vancouver, British Columbia-based junior exploration company plans to begin diamond core drilling on the 7,500-acre property later in August, starting with a 10-hole program, the company said.

About 2,000 meters (6,561 feet) will be completed during the first phase of work on the property, according to Peter Dasler, a spokesman for Freegold. Drilling will target known mineralization previously drilled, as well as other new zones called Rat Creek and Tarn.

Past drilling work has identified a mineral resource of 773,012 tonnes, with an average grade of 8.9 grams of gold per ton and 33.6 grams of silver per ton, as reported in the Yukon Mineral property updated in January 2004, according to Freegold's release. That mineral resource translates to 221,000 ounces of gold and 835,000 ounces of silver.

Freegold Ventures has not independently verified those numbers in the historical resource, the company stated in its release.

Near infrastructure

One advantage for Grew Creek is its proximity to infrastructure. The 192 mining claims are one kilometer off the Robert Campbell Highway, which links Carmacks with Ross River and Watson Lake in a southeasterly route following the Pelly River. It is also near the Whitehorse power grid, Freegold noted in its release.

Grew Creek is one of many mineral occurrences located within the Tintina fault, which stretches in an arc from southeastern Yukon Territory across the U.S./Canadian border and through Interior Alaska.

"Unlike the gold occurrences of Interior Alaska, Grew Creek is thought to be an epithermal deposit, meaning it formed at lower temperature, nearer surface and normally something that deposited gold when the fluids rose into a lower pressure zone and boiled, dropping the gold and silver as minerals from solutions," said Curt Freeman, Freegold's geological consultant based in Fairbanks, Alaska. "These types of occurrences can be extremely high grade and that is a big plus in this part of the world."

His company, Avalon Development, conducted research on the property in the late 1990s, although work slowed when market prices for gold dropped. "The real key at Grew is to look for the higher-grade new resources," Freeman said.

Grew Creek covers a sequence of Eocene volcanic and sedimentary rocks preserved within a graven formed by the Tintina Fault System, Freegold said in its press release. Gold and silver mineralization at Grew Creek is hosted by highly permeable felsic pyroclastic tuff.

Property history

Freegold optioned the property from its original prospector, Al Carlos, who discovered the showing at Grew in 1983, according to Kristina Walcott, manager of business development at Freegold.

The property was optioned by Hudson Bay in 1984-85, by Noranda in 1986-87, then by Goldnev, according to Dasler. YGC Resources optioned it next, followed by Wheaton River, then it went back to YGC, he said.

"YGC and Wheaton did most of the drilling on the target, but no drilling since 1996," he said. "Al Carlos has done work in that time and identified other areas. Additional work has identified (a) different geological picture, which gives incentive to drill more holes to increase the size and grade of the current resource."

Drilling planned for this fall will initially test a new vein interpretation that suggests the vein system is subparallel to the previous drill hole orientation, according to the company's statement. "This orientation leaves the deposit open to the south and as a result may significantly increase the grade and tonnage of the resource in the Main zone," Freegold said.

Other targets, including the Rat Creek and Tarn zones, will be tested. Rat Creek is a high priority, as it may host the source for mineralization of the gold-in-till anomaly overlying the Main Zone, the company said.

Grew Creek is the first in a series of Canadian acquisitions for Freegold, as other announcements will be forthcoming shortly, the company said in its press release.

Agreement terms

In its agreement with Carlos, Freegold will spend $1.5 million on exploration, make cash payments of $305,000 over five years and issue 200,000 shares over four years. The property is subject to a 3 percent net smelter return.

In the event that commercial production has not begun by the sixth anniversary of the agreement, Freegold shall make an advance royalty payment in the amount of $50,000. On the seventh anniversary, the annual advance royalty payments shall increase to $100,000.

Freegold Ventures has several active gold exploration projects in Interior Alaska, including its Golden Summit property optioned to Meridian Gold.

Freegold also has a joint venture agreement with Lonmin for its platinum property in Southeast Alaska, called Union Bay.

Outside of Alaska, Freegold has the Almaden Gold property in west central Idaho, and a project in the Sudbury Mining District in Ontario.


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