Junior exploration companies begin bulk sampling in Alaska: gold recovery adds cash to spending programs.

• Author: Liles, Patricia
• Position: MINING

[ILLUSTRATION OMITTED]

This summer, two junior exploration companies working on gold properties in Alaska have reached the stage of bulk-sampling, in which a large quantity of mineralized material is dug up and tested for continuity and recovery.

But both companies, Freegold Ventures and Full Metal Minerals, are opting to conduct the recovery portion of that test on-site, allowing their respective operations to benefit from a limited amount of cash flow generated by the gold extracted in the bulk-sampling program.

Full Metal, which has been drilling the historic Lucky Shot underground mine north of Wasilla for several years now, announced plans earlier this summer to take bulk samples from the old mine workings and to process that material on-site with a chemical-free, gravity-based separation plant.

"We want to see what kind of recoveries we get from gravity," said Rob McLeod, vice president of exploration for the Vancouver, B.C.-based exploration company that is working on 10 different properties in Alaska.

"Honestly we are an exploration company," McLeod said. "This would give us cash-flow leverage into finding more economic deposits in Alaska."

Freegold started up its chemical-free processing plant this June at its Golden Summit property north of Fairbanks after running the operation for a few weeks last fall. The company received a five-year authorization from State and federal regulators in mid-2007 for its bulk-sampling and gold-recovery program, permits that allow Freegold to collect and process up to 108,000 tons of mineralized material annually. The permits also cover Freegold's water usage, tailings storage and site-reclamation requirements for the sampling and processing program.

Whether the gold recovery will pay for Freegold's operating or capital costs at Golden Summit remains to be seen. "That's what my boss keeps asking me," said Michael Gross, vice president of exploration for Freegold, another exploration company with multiple Alaska sites and also based in Vancouver, B.C.

"I can't look at those concentrates and make a guesstimate about what's in there," he said. "I like what I'm seeing and I think it's there, but I can't do a good job estimating what's in the concentrate until it gets into a refinery."

Bulk-sampling is a common technique used in the mining industry during the early to middle stages of advancing a mineral resource. In Alaska, bulk-sampling can be expensive, as the mineralized material is typically shipped...