North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Avidian Gold Corp. June 1 said it has signed a binding letter of intent to acquire the Fish Creek gold property near Kinross Gold Corp.'s Fort Knox Mine in Alaska from Keltic Enterprises Inc.

Situated about four miles east of the area currently being mined at Fort Knox and immediately west of Kinross' Gil deposit, Fish Creek consists of 1,032 acres of state mineral lease lands.

Avidian already owns Amanita, 3,608-acre property on state lands boarding the south side of the Fort Knox Mine property.

"The acquisition of the Fish Creek project is a continuation of our plan to acquire additional properties in the Fairbanks Mining District and Fort Knox area in particular. This is a prolific gold district that lends itself to favorable metallurgy through heap leaching of oxidized mineralization," said Avidian Gold Chairman and CEO David Anderson. "We have seen oxidation profiles similar to Fort Knox in mineralization identified on our Amanita prospect, located 5.5 kilometers (3.4 miles) south of the Fort Knox pit and anticipate a similar situation at Fish Creek. We look forward to continuing exploration at Amanita and initiating exploration at Fish Creek this summer."

The Fish Creek project has potential to host both lode and placer gold deposits due to its shared regional geology and down-slope location from both Kinross' Fort Knox mine and Gil project. The property has been primarily explored for placer gold, but intrusive bodies typically associated with lode gold in the Fairbanks district are evident from geophysics carried out on the property.

The Fish Creek property has excellent road access and is located on a drainage system that was mined extensively for placer gold. Very widely spaced placer drilling over a large area of the property in 1996 and more extensive, closer spaced placer drilling conducted in 2004 confirmed the presence of significant concentrations of placer gold on the Fish Creek lease, according to a 2005 technical report filed by Linux Gold Corp.

Outcrop on the property is scarce and consequently most of the historical exploration has been focused on placer exploration. Avidian's prime focus will be on exploring lode gold, which had previously been a secondary focus due to scarce outcrop. The company, however, is considering the placer gold potential to fund future exploration.

To acquire full ownership of Fish Creek, Avidian has agreed to issue 2.5 million Avidian shares; grant a 1% net smelter return royalty on Fish Creek; and 0.2% NSR on Amanita to Keltic Enterprises.

Keltic will also be entitled to receive one half of any additional royalty granted to a third party in the event of subsequent disposition by Avidian of the Fish Creek property and to receive 25% of any net profits received from such sale to a third party after a deduction of an amount equal to two times the exploration costs expended by Avidian on the Fish Creek property and reasonable transactional expenses incurred in connection with sale to a third party.

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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