Freegold Grants South32 Option in Shorty Creek Copper Project
VANCOUVER, BC—Freegold Ventures Limited has entered into an agreement with a wholly owned subsidiary of South32 Limited (South32) whereby South32 has the option to earn a 70 percent interest in the Shorty Creek property located in Alaska. To maintain the option in good standing South32 must contribute minimum exploration funding of $10 million over a 4 year option period with minimum exploration expenditures of $2 million in Years 1 and 2 and $3 million in Years 3 and 4 for an aggregate of $10 million.
Provided that all the exploration data and information has been made available by December 31 of each year of the option agreement, South32 shall decide within thirty days whether to fund a further tranche. The first year expenditure of a minimum $2 million is a firm commitment. Should South32 withdraw prior to exercising its option, the option will lapse and South32 will have no further interest in or claim against the project.
South32 may exercise its option at any time following Year 1 to subscribe for 70 percent of the shares of a newly formed project company by committing $30 million to the newly formed company, less the amount of exploration expenditure contributed by South32 during the option period.
After the subscription funding has been expended by the project holding company the parties will contribute funding pro rata (70/30), as contemplated by the operating agreement, which will govern the period subsequent to the option exercise.
Freegold will act as the operator of the project during the 4 year option period and will provide annual reports and budgets to a technical committee formed by Freegold and South32 for the purpose of reviewing and approving each year’s program.
Located 120 km northwest of Fairbanks, the Shorty Creek project was identified as having significant porphyry potential by Freegold in late 2014. To date 12 widely spaced holes with average hole depths of 500 meters have been drilled at the Hill 1835 target, all of which intersected significant and consistent copper, gold, silver and tungsten mineralization over broad widths from base of oxide material (average ~ 90 meters).
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Shorty Creek hosts a cluster of magnetic anomalies commonly seen in porphyry districts. Hill 1835 is only one of the potentially significant targets within the property area. Drilling has expanded the mineralized zone to an area over 750 meters x 300 meters. The target remains open both laterally and to depth.
Two (2) km to the northwest of Hill 1835 is Hill 1710 which hosts a large copper and molybdenum geochemical anomaly coincident with a 6 km long broad magnetic anomaly. Initial drill testing in 2016 consisted of four (4) holes spaced 400 meters apart and tested 1.6 km of this magnetic high. Each hole intersected porphyry style mineralization, with copper grades increasing to the northeast. The magnetic anomaly extends another 2.5 km to the northeast from the limits of the 2016 drilling.
Other exploration targets within this promising 100 square kilometer property include the Quarry target, where oxidized porphyritic rock with stockwork veining returned values of 500 ppm copper in rock samples. Quarry lies 3 km north northeast of Hill 1835 at the northern end of an 11 km long magnetic high. Sampling at Quarry has confirmed both the presence of copper mineralization and quartz feldspar porphyry outcrops.
Additional sampling and mapping has been completed and continues to identify other target areas that may have the potential to host additional copper mineralization.
The Qualified Person for this release is Alvin Jackson, P.Geo – Vice President Exploration and Development for the Company who has reviewed and approved the scientific and technical information contained in this press release.
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Out of the Mine and into the Smelter
Mining has long been a key fixture of Alaska’s economy. On a small scale, people flock to the 49th state to tour different operations. Kennecott Mine was once a booming copper mining site and is now a National Historic Landmark, attracting tourists eager to visit the ghost town and get a feel of the Gold Rush era it once dominated.