Freegold Ventures Limited (TSX: FVL | OTCQX: FGOVF) has announced an updated mineral resource estimate for the Golden Summit Project. The revised estimate incorporates data from the company’s 2023 drilling programme and the initial two holes of the 2024 programme, representing a significant milestone in exploration and development activities.
Mineral resources for the primary resources are reported at a cut-off grade of 0.50g/t gold and constrained within an open pit shell using a gold price of US$1,973/oz, US$2.50/t mining cost, US$14/t processing cost, US$2.00/t G+A, 72% gold recovery, and a 45° pit slope.
The updated resource is the result of primarily infill drilling, upgrading areas considered waste in Freegold’s February 2023 drill programme due to lack of drill density. Ounces and grades increased materially in all categories considered within an open pit context. Freegold expects that further infill drilling may also positively impact stripping ratios when a mine plan is optimized.
The company’s 2024 drill programme is focusing on the west and southwest of the existing resource where soil geochemistry, found to be a strong indicator, and historic gold mines have outlined two logical corridors that extend approximately 1.5km; in context, Golden Summit’s current resource occupies a 1.5km east-west footprint.
The current estimate is based on a gold price of US$1,973, which reflects the three-year trailing average. Even though the 2024 resource estimate uses a higher gold price than the US$1,792 in 2023, this is balanced by a lower recovery rate (72% vs. 90%). Previously, the 2023 resource plan considered using CIL (carbon-in-leach) and oxidation to process the sulphide flotation concentrate for higher recoveries.
However, positive test results released earlier this year indicate that a significant portion of the mineralization is non-refractory and can be processed using much less costly gravity and CIL. Although the recovery is projected to be lower, the overall operating and capital cost savings would more than compensate and simplify the project substantially. The 72% recovery used for the resource is believed to be conservative.
The reported test work showed recovery rates of up to 87.5%, with an average recovery of 77% using gravity and CIL, based on 5,100kg of material and eight composites.
Furthermore, initial indications are that mineralization to the west, where the company’s 2024 drill programme is concentrated, achieves higher recoveries. Additional optimization work and metallurgical samples from four large-diameter drill holes completed will be used for further metallurgical test work.
The latest resource estimate shows an increase in the resource size and a notable improvement in grade. The discovery cost remains exceptionally low at under US$4.00/oz. Golden Summit has a substantial resource and presents an excellent development opportunity due to its proximity to robust infrastructure – road accessibility, proximity to a supply centre, and available labour force, all of which are expected to contribute to lower operating costs.
Additional drilling will focus on improving the ore quality and outlining a smaller, higher-grade starter pit within the deposit as the project moves towards pre-feasibility to reduce operating and initial capital costs. The updated resource’s results demonstrated this approach’s success with its increase in overall resource grades at the various cut-offs.
Freegold will conduct trade-off studies to optimize the overall economics and balance improved recovery rates with capital and operating costs as the project progresses. Additional metallurgical work is also in progress, and four large diameter (PQ) boreholes have been drilled this year. These will undergo a comprehensive suite of metallurgical tests to assess various processing methods to improve recoveries and further reduce the project’s risks.
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