Left leaderless and weighed down with about C$11 million in debt in mid-2009, it appeared Freegold Ventures Ltd. would become another casualty of the market collapse of 2008. Many believe this surely would have been the case if not for the tenacity of Kristina Walcott, then the company's vice president of corporate development.

Stepping into the leadership role at Freegold, Walcott leveraged the value of the company's four gold assets in Alaska and Idaho. Over the course of a few short months, the new president and CEO slashed C$5.2 million from the C$6 million tab the company had run up in past-due, short-term debt, converted about C$1.6 million of its unsecured debt into some 14.5 million shares of Freegold, raised enough money to sate the appetites of the service and supply vendors to whom the company owed nearly C$4 million and negotiated exploration agreements on two Alaska properties.

"We have been working with our creditors for some time and are very pleased that they have shown the confidence in Freegold and its projects and management team to accept Freegold shares in satisfaction of a significant portion of our indebtedness," Walcott said in January. "After giving effect to the new debt settlements and reduction in indebtedness from the sale last fall of our Almaden project and the related conversion by Tiomin Resources Inc. of the amount that we owed to it, we are in a much-improved financial position, compared to where we were a few months ago. We certainly appreciate the patience and support of our shareholders and creditors through a very difficult period."

Having saved Freegold from financial ruin, Walcott is now negotiating a merger between her company and Western Standard Metals Ltd.

"It is going to be a very positive move for both companies," she told Mining News.

New force in Alaska

Freegold and Western Standard on Feb. 17 unveiled plans to join forces in a new exploration company called Amalco. The amalgamated company will retain the management and exploration teams of both Freegold and Western Standard, providing it with greater financial and technical strength to move its advanced stage projects forward.

Walcott described Amalco as "a new force in Alaska exploration."

Upon completion of the merger Amalco will have a portfolio of four gold properties (the Golden Summit, Vinasale and Rob projects in Alaska and the Almaden project in Idaho) all of which were former Freegold properties.

Western Standard Chairman and CEO Alvin Jackson will assume the same role at Amalco, Walcott will serve as vice chairman and chief operating officer of the new company. David Knight, Bruce Ramsden, Amin Somani and Garnet Dawson will round out the board of directors.

Other officers of Amalco are Walter Melnyk, president; Tanuja de Silva Skerlec, chief financial officer; and Gordon Steblin, controller.

"I think it (the merger) will be a great thing for both companies. It combines a great asset base with a strong management team," Walcott told Mining News.

"I am very, very positive on bringing this together," Jackson said. "I certainly like the assets. It sort of brings the whole package under one roof again."

"Certainly having Kristina playing a major role in the new company is very important; there is no question about it. She is extremely knowledgeable and a very capable individual," Jackson told Mining News.

The Western Standard CEO said Amalco will probably start drilling at Vinasale first and conduct a late season program at the more accessible Golden Summit property.

"We will be going forward with drill programs on both Golden Summit and Vinasale; we will be doing some ground geophysics to begin with and follow-up drilling on both," Jackson said.

Bulk tonnage at Golden Summit

The Golden Summit project, about 20 miles or 32 kilometers north of Fairbanks, will be one of Amalco's primary 2010 exploration targets in Alaska. The project is host to a number of gold occurrences that are similar in age and style to the multimillion-ounce intrusion found at Kinross Gold Corp.'s Fort Knox Mine about 5 miles, or 8 kilometers, to the south.

Freegold has conducted numerous exploration programs at Golden Summit since it acquired an interest in the 2,194-hectare- or 5,421-acre-property in 1991. The company's past exploration includes 26,900 meters of drilling, 5,500 meters of trenching, 7,729 soil samples, mapping and geophysics.

Freegold's exploration has identified a number of significant new gold occurrences and found extensions to mineralization adjacent to historic mines, however a number of targets remain untested or have had limited exploration.

According to Western Standard, exploration targets with significant potential include from west to east: Tolovana-Dolphin deposit, Newsboy Mine, Cleary Hill Mine, American Eagle Vein Swarm and Hi Yu Mine.

Amalco said its initial 2010 drill program will focus on extending the near-surface intrusion hosted gold mineralization intersected in historic drill holes at the Tolovana-Dolphin deposit.

"With Golden Summit, we will be taking a much closer look at the Dolphin intrusive," Walcott said.

The top executives from both Freegold and Western Standard told Mining News that Amalco will be looking for bulk-tonnage targets at Golden Saddle.

"We are not chasing after the narrower high-grade stuff on Golden Summit, Jackson said. "Basically we are targeting the bulk-tonnage-type situations there."

Jackson said Amalco is currently looking at spending between C$750,000 and C$1 million on exploration at Golden Summit in 2010.

Expanding the Vinasale resource

The Vinasale gold project - found on the northern end of the Kuskokwim Gold Belt about 16 miles or 26 kilometers south of McGrath - will be Amalco's other primary exploration target in 2010.

Gold mineralization was first discovered at Vinasale by Central Alaskan Gold Co. in 1989. Central Alaskan Gold and joint venture partner Placer Dome completed 5,285 meters of drilling as well as soil sampling, geophysics and metallurgical work from 1990 through 1993. An additional 5,262 meters of drilling was completed by ASA-Montague the following year.

A non-NI43-101-compliant resource of 925,000 ounces of gold (14.5 million metric tons grading 1.95 grams per metric ton) was calculated for the Central Zone of Vinasale in 1994.

Freegold optioned the property from Doyon Ltd., an Alaska Native regional corporation, in 2007. The company flew an airborne geophysical survey over the entire 140,000-acre property as well as conducting a mapping and sampling program.

The following year Freegold carried out a ground-based induced polarization and magnetic survey over the northern part of the deposit. According to Western Standard, this work has identified chargeability and resistivity targets associated with the northern edge of the Vinasale stock as well as regional targets that require follow-up exploration.

Amalco plans an initial exploration program consisting of data compilation and verification to identify targets for follow up in 2010. The exploration program will include geophysics, geochemistry and diamond drilling with the objective of expanding the existing resource as well as identifying new areas that may have the potential to host additional resources. In addition to the exploration program, the company will collect samples for metallurgical testing.

"I think Vinasale is a great project; it is a project I brought to the company (Freegold) originally," Walcott said.

Jackson said Amalco plans to spend out C$1.5 million in exploration at Vinasale in 2010.

Considering a partner at Rob

Amalco is looking at optioning off or bringing in a partner at the Rob high-grade gold project, which will be the company's third Alaska asset.

"We are trying to position ourselves to be primarily looking at these bulk-tonnage-type things. Although Rob is definitely of interest because it had some pretty good intercepts on it," Jackson said.

Freegold acquired the Rob property in 2002. The company said gold mineralization at Rob exhibits many of the same geological and geochemical characteristics as those found at Sumitomo Metal Mining's Pogo gold mine about 20 miles, or 32 kilometers, to the east.

The company first drilled the property in 2007; the best intersections of an eight-hole program targeting a vein known as the Grey Lead were a 4.1-meter interval averaging 20.1 g/t gold and another 4-meter intersect grading 29 g/t gold.

In 2008 Freegold drilled 12 holes targeting the Grey Lead vein at depth. Three holes hit the vein, including the first hole of the season that cut 2.4 meters, starting at a depth of 22.4 meters, with an average grade of 62 g/t gold.

Idaho gold project

Amalco also will have the Almaden project in western Idaho in its portfolio of bulk tonnage gold properties.

In a deal structured to relieve Freegold of much of its short-term debt, Western Standard acquired Almaden in October 2009.

According to a NI43-101 technical report completed in January of this year, the Idaho property hosts a measured resource of 239,000 ounces of gold (9.81 million metric tons grading 0.754 g/t), an indicated resource of 625,000 ounces of gold (29.25 million metric tons grading 0.651 g/t) and an inferred resource of 84,000 ounces of gold (4.78 million metric tons grading 0.549 g/t.)

The company said gold mineralization at Almaden is a relatively flat-lying, strata-bound, near-surface, disseminated gold zone interpreted as forming in a hot-spring environment in the upper levels of an epithermal system.

The company said the large near-surface resource is open along strike to the north and south, and down dip. Amalco plans to complete additional drilling to expand the resources and will embark on environmental and metallurgical studies to advance the project through feasibility.

Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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