Results rolling in from Fire River Gold Corp.'s multifaceted evaluation of Nixon Fork bode well for a near-term startup and the long-term potential of the high-grade gold mine in Interior Alaska.

Richard Goodwin, who was named Nixon Fork project manager in March, is leading a geological and engineering team that is studying the viability of reprocessing gold-laden tailings through a carbon-in-leach circuit at the mine.

Goodwin is a mining engineer with more than 25 years of experience in underground mine operations, engineering consulting and corporate management. Goodwin's prior experience includes vice president of mining for Yukon Zinc Corp.'s Wolverine zinc-silver project in the Yukon Territory and vice president of mining and chief operating officer for Redcorp Resources Ltd.

Fire River's geological team has been busy resampling some 9,400 meters of core from underground drilling completed in 2007 and 2008. The reassessment is helping the explorer understand the structure of the complex geology of the skarn deposit at Nixon Fork.

"It has reaffirmed that the model is pipe-shaped, and we are trying to establish the strike length and continuity vertically. We know that we are going to be looking for more of these pipe-shaped structures," Goodwin explained.

The near-term production potential at Nixon Fork lies in a tailings pond estimated to contain some 40,000 ounces of gold. The young junior, which completed its initial public offering just a year ago, is currently finishing an assessment of what it will take to complete installation of a 250-ton-per-day carbon-in-leach circuit already onsite and begin recovering precious metal from the 150,000 tons of milled tailings deposited by St. Andrew Goldfields Ltd., the previous operator of the high-grade gold mine.

Gold-laden tailings

Though it is estimated that former Nixon Fork miners captured about 83 percent of the gold through gravity and floatation circuits, head grades of more than 1-ounce-per-ton gold makes the remaining 17 percent deposited into the tailings pond an attractive target.

The previous Nixon Fork owner had already begun setting up the equipment needed to reprocess the gold-laden tailings. After completing a 13-hole drill program that averaged 8.1 g/t gold, St. Andrew purchased a CIL plant to recover gold from the tailings. The company gained permits, completed a new tailings pond and began construction on the recovery plant before it was forced to shutter the mine due to financial hardship.

Fire River followed up on this work with another 21 holes drilled in 2009. Assay results from all 34 holes drilled average 7.6 grams of gold per metric ton, making the pond a repository of high-grade ore previously ground and ready for processing.

Though Fire River has not yet disclosed an updated resource, it is estimated that the pond contains between 36,000 and 44,000 ounces of gold.

Fire River has assembled a team of specialists to assist with analysis of processing the tailings. The team - which includes George Rawsthorne (who is acting as design metallurgist), Ted Barbor (a mill operations specialist) and Bill Wong (who will do the design work for the mill) - are evaluating the current design of the production equipment.

Metallurgical tests completed for Fire River by PRA labs indicate that the CIL circuit will recover about 83 percent of the gold in the tailings pond without any further milling or major modifications to the recovery plant, which is about 60 percent installed.

"We have taken St. Andrew's design and done a few tweaks to it," Goodwin said. "We have confirmed all the equipment is up there so we have very minor additions to what is already at site."

Representatives from Alaska Mechanical Inc. joined the team during a late March visit to Nixon Fork. The Alaska-based contractor that began installing the CIL plant in 2007 will provide Fire River a quote on completion of the work.

Once the team has reviewed the current design and made any appropriate modifications, they will calculate the capital requirements to complete the CIL circuit as well as estimate operating costs and revenues from production.

Fire River also is investigating the economics of doubling the current 250-ton-per-day design, but will probably begin operations at the current rate and later add components needed to boost capacity.

In mid-May the company raised about C$3.6 million through private placement financing, but Goodwin said most of those funds are designated for exploration work, and the company plans to raise additional funds to complete construction of the recovery plant.

"We just secured some financing but we want to keep that for the drilling and the evaluation work. We will be seeking fresh financing - not necessarily a shares issuance - specifically for the CIL," Goodwin said.

The Nixon Fork project manager indicated that Fire River will seek the additional funds as soon as the company finishes a preliminary assessment of reprocessing the tailings, expected by early June.

Re-evaluation exceeds expectations

While engineers work out the details of getting the CIL plant operational, Fire River Gold geologists have been busy relogging and reassaying historical drill core in preparation for a 20,000-meter drill program this summer with the goal of resuming underground operations at the shuttered mine.

Fire River recently hired Larry Hillesland, who has more than 30 years of mineral exploration experience, as manager of geology at Nixon Fork. Hillesland will lead a staff six site geologists. The geological crew continues to churn out a steady stream of assay results from the reassessment program, reaffirming discoveries made by St. Andrew and gaining a better understanding of the geology at the mine.

"Results to date from our current resampling and evaluation program have met, and in some cases, exceeded our expectations and have identified very promising grades amenable to mining," Hillesland said.

The re-evaluation has churned out assays that include 61 grams per metric ton gold over 4 meters in hole N08U007, and 41 g/t gold over 3.8 meters in hole N08U017. The best two intercepts of the program were a 5.1-meter section of hole N07U048, which averaged 128 g/t gold and 4.6 meter s in hole N08U011, which returned 140 g/t gold.

These drill holes were completed in the Crystal decline around the 3300 zone near the 220-foot, or 67-meter, level.

"The location of most of this stuff is pretty high up in the mine; it is pretty near the collar, which is nice. So, the early mining will be right up at the collar location of the Crystal Mine," Goodwin said.

Fire River said assay results from the 2007-2008 drilling have never been previously disclosed to the public and all the holes were drilled after the last mining campaign so they are available for inclusion in an updated resource estimate, scheduled for release in about two months.

Extensive drilling in 2010

Fire River plans to use the results of the geological re-evaluation program to guide a 20,000-meter drill program. The extensive drilling will include a 12,000-meter underground drill program and 8,000 meters of surface drilling, which will test several development prospects on the property from the surface in hopes of establishing additional zones of mineralization.

Goodwin told Mining News that the primary focus of the underground drill program will be to expand the high-grade gold resource areas highlighted in the re-evaluation of past drilling. The Nixon Fork leader said the resource confirmation and expansion drilling will be "safe drilling" with modest step-outs.

In addition to confirming continuity of the ore bodies and extending mineralized zones of the two past- producing mines, the underground program will target a prospective area between the Crystal and Mystery mines, known as Southern Cross.

Southern Cross also will be a primary target of the surface drill program. The above-ground drilling will also be seeking other new high-grade gold mineralization.

Goodwin told Mining News that Fire River has geologists analyzing magnetic and other data from past exploration in order to pinpoint prospects for new deposits.

The Nixon Fork manager said the company will incorporate the information gained from the summer drill program into an updated resource estimate expected to be completed by October.

A mine plan and a production decision for the resumption of underground mining at the shuttered high-grade gold mine is anticipated by the end of 2010.

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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