FRONTIER Resources is pushing the boundaries into exciting exploration areas of Papua New Guinea and the rewards could be the next Lihir-style gold deposit. By Blake Wilshaw
Frontier's Andewa project
Managing director Peter McNeil said results from a massive 21 square kilometre grid-based soil sampling program at the company?s Andewa project had boosted the outlook, as the last piece in the jigsaw puzzle, before drilling it in June.
?Frontier undertook and completed an enormous grid based, 3D-IP [three-dimensional, induced polarisation] and soil sampling program, that there was a calculated risk during a time of global uncertainty,? McNeil said, also noting ?excellent geophysical and rock assay results were returned and the 4530 soil assays just announced are excellent results and have confirmed the presence of a very large scale gold mineralised system?.
?The entire program was remarkably successful and has rewarded directors and shareholders for their faith in the concept, project and company.
?Andewa?s geological and structural location is conceptually identical to Lihir?s, based on my experience working there, and Frontier have now geochemically and geophysically demonstrated the potential for a similar, large scale world class epithermal gold deposit.?
At Lihir, McNeil was involved in a specific drilling program designed to locate high-grade resources within the deposit.
?If you look at a map of PNG, you?ve got the islands off New Ireland to the north that dot along the coast. They?re volcanoes that come out of that section of the crust under the ocean,? he said.
?The difference is the volcanos on New Britain have been formed through the same processes, but they come up through the island.
?Andewa?s tectonic position is similar to Lihir and that gives a good chance of producing a similar deposit.?
However, not only is Andewa prospective for gold, the soil assay program returned encouraging copper and molybdenum results.
This suggests the possibility of a porphyry copper-gold-molybdenum type deposit also.
?Gold, copper, moly, arsenic and antimony in soils are coincident with one of the main high chargeability and conductivity zones at 50 metres below topography that then continue on to more than 800 metres depth,? McNeil said.
?The chargeability anomalies show sulfides or graphite minerals that will conduct electricity. The conductive zones, or semi-massive sulfides, conduct electricity better and often will contain abundant base metals sulfides. Because it?s semi-massive, it means you?re in there with a much better chance of obtaining drill intersections of economic gold and copper.
?A very exciting thing about the chargeability anomaly is that it has a lot of zones that are very intense and likely represent stronger mineralisation.?
The peak rock assays from recently discovered outcrops at Andewa was 15m at 15.48 grams per tonne of gold. The highest tenor and longest gold intercepts from the soil sampling on 200m spaced lines were 425m of 0.46gpt gold and 400 parts per million copper and 800m at 0.12gpt gold and 226ppm copper.
?These are excellent widths and grades in soils and the plan is to hit the ground with Frontier?s own diamond rig, which can drill to a depth of 400 metres,? McNeil said.
?We are going out for a share purchase plan [capital raising] now to enable us to really ramp up exploration and drilling to adequately and rapidly work the Andewa project to the scale that these very large anomalies warrant.
?Frontier will purchase exploration equipment now, including two new diamond drilling rigs capable of drilling to a total depth of about 1100 metres.
?The chargeability anomalies extend more than 800 metres below surface, suggesting the possibility of a massive system. They start out a little fragmented near surface, but as you progress to depth, they coalesce and form into a large, pseudo funnel-shaped, zone of potential mineralisation.
?That?s extremely encouraging, and suggests the ore is more cohesive and consistent at those depths.
?So we plan to start drilling with our diamond rig and then to test the deeper parts of the anomalies with the new rigs when they arrive.?
Hand trenching of conductivity anomalies and gold anomalies is being undertaken, along with infill soil sampling to better define the gold anomalous zones and assist in discriminating the first group of drilling targets.
?There is generally a good correlation between higher tenor gold in soil assays and higher IP chargeability zones, with the very low chargeability zones virtually always very weakly or unmineralised,? McNeil said.
?This is very encouraging for the probability of demonstrating significant gold mineralisation associated with the chargeability anomalies.
?Much of the gold in soil anomalous area within the Andewa crater has now been adequately defined for first pass exploration.
?However, both the geophysical and the soil-and-rock geochemical anomalies extend off the grid in the southeast and south-central sectors, indicating that additional follow-up grid-based soil sampling and 3D-IP is required to close off the mineralised system and recognise its full potential.
?The nearby Mt Schrader is an Andewa lookalike and Frontier has lodged a 2500 square kilometre exploration licence application over that and the surrounding prospective area.?
Separate to the Andewa project, Frontier has two copper-gold joint ventures with OK Tedi Mining Ltd operator of the large namesake copper mine in PNG.
Ok Tedi is hungry for exploration success on these projects to convert into a new mine development, because their mine is scheduled to close in 2013.
OTML also is a major Frontier shareholder.
One JV Frontierhas involves two exploration licences in the Highlands and the other has three exploration licences on the highly prospective island of New Britain. There are six known porphyry copper-gold occurrences and four probable porphyry occurrences in these ELs, many of which will be drill tested during the coming 13,000m drilling program.
?The Bulago and Leonard Schultz JV also has fantastic high-grade gold results, so we got better JV terms for Frontier on these ELs,? McNeil said.
?Ultimately Frontier will own 42 per cent, but if the PNG government decides to exercise its right to purchase equity we?ll be diluted to 19.9 per cent.
?OTML must spend $US12 million per project, for a total earn-in of either 58 or 80.1 per cent, then Frontier is deferred carried to the completion of a bankable feasibility study.
?This is an excellent strategic alliance.?
Boosting the retail investment case for Frontier is its diverse commodity and location base, including some promising multi-metal projects in Tasmania.
Frontier is specifically targeting tungsten at the Moina project and Cethana EL, but the prospects in that area are also highly prospective for gold and tin.
Its Narrawa deposit contains an indicated resource of 162,755t at 2.11gpt gold, 20.5gpt silver, 1.42% lead and 1.2% zinc plus an inferred resource of 46,574t grading 2.07gpt gold, 16gpt silver, 0.98% lead and 0.81% zinc.
The on-surface Stormont deposit has an inferred resource of 14,25oz at a healthy 4.5gpt.
Frontier plans to increase the size of the resource and upgrade it from inferred to indicated.
Soil sampling in the region is showing excellent tungsten anomalies and demonstrating the areas high total mineral potential.
Tasmania has three world class mines associated with intrusive related mineralisation such as at Moina and Frontier is targeting such deposits there as well as in Papua New Guinea.
Frontier?s pushing the boundaries and its future looks very promising.
FNT Price at posting:
20.6¢ Sentiment: Buy Disclosure: Held
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