Fronteer Realigns Newmont Partnership to Fast-Track Development of Sandman, Regains 100% of Northumberland
February 06 2008 - 8:44AM
Marketwired
VANCOUVER, BRITISH COLUMBIA (TSX: FRG)(AMEX: FRG) is pleased to
announce that it has signed a Letter of Intent ("LOI") with its
senior Nevada partner, Newmont Mining Corporation ("Newmont"), to
rapidly advance the Company's Sandman gold project to a production
decision within 36 months. As part of this agreement, Fronteer also
regains an undivided 100% interest in Northumberland, one of the
largest undeveloped Carlin-style gold deposits in Nevada.
The LOI gives Fronteer immediate exposure to near-term
production in Nevada and increases its attributable gold resource
base at Northumberland by 60%. Fronteer now assumes full ownership
of Northumberland with a NI 43-101 resource estimate of 2.06
million ounces of gold (measured and indicated), 0.40 million
ounces of gold (inferred), and 5.11 million ounces silver
(inferred).
"As a result of this new partnership, Fronteer will have
potential near-term production funded and operated by one of the
world's best gold mining companies, while retaining 100% ownership
of Northumberland and its gold ounces," says Fronteer President and
CEO, Mark O'Dea. "In turn, Newmont is provided the quickest access
to low-cost gold production and reserve replenishment from a
project that has good synergies with its nearby
infrastructure."
The LOI reflects Fronteer's dual growth platform: growth through
resource expansion and discovery; and growth through future
production. While Newmont advances Sandman toward a production
decision, Fronteer can focus on an aggressive drill program at
Northumberland and the Company's 17 other Nevada gold projects.
Sandman currently includes a group of five closely spaced gold
deposits, four of which contribute to a combined NI 43-101 resource
estimate of 271,900 ounces (measured and indicated) and 38,000
ounces (inferred) gold. The deposits are near-surface and open-pit
mineable, with significant resource expansion and exploration
upside potential.
Under the terms of the LOI, Newmont may earn an initial 51%
interest in Sandman within 36 months by:
1. Spending a minimum US$14 million on exploration;
2. Making a production decision supported by a bankable
feasibility study;
3. Reporting reserves;
4. Making a commitment to fund and construct a mine;
5. Advancing the necessary permits; and
6. Contributing adjacent mineral interest to the joint
venture.
Newmont may earn an additional 9% interest in Sandman by
spending a further US$9 million on development. Fronteer retains a
2% NSR on production of the first 310,000 ounces at Sandman.
Fronteer can also elect to have Newmont arrange financing for its
40% of development costs.
In addition to regaining a 100% interest in Northumberland,
Fronteer has been granted a free license for the use of Newmont's
patented N2TEC flotation process technology. In return, Fronteer
has granted Newmont preferential ore processing rights for any ore
developed from Northumberland. Fronteer will invest approximately
US$4M in Northumberland exploration for 2008, including plans to
update the project's NI 43-101 resource estimate to include the
previous three year's worth of drill results.
About Fronteer
Fronteer is an exploration and development company with a track
record of making big discoveries. Fronteer has a 40% interest in
three excellent gold and copper-gold projects in western Turkey, an
extensive portfolio of advanced stage gold projects in Nevada, and
a 42.3% interest in Aurora Energy Resources (TSX: AXU), a leading
Canadian uranium company.
Mineral resources are not mineral reserves and do not have
demonstrated economic viability, and there is no guarantee that any
resource will become a reserve. Michael Gustin, Ph.D., of Mine
Development Associates ("MDA"), Reno, Nevada, is designated as a
Qualified Person for the Northumberland and Sandman resource
estimates, with the ability and authority to verify the
authenticity of, and validity of, this data. Mineral resources have
been estimated by MDA in accordance with the standards adopted by
the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM")
Council in August 2000, as amended, and prescribed by the Canadian
Securities Administrators' National Instrument 43-101 Standards of
Disclosure for Mineral Projects. The Northumberland resource
estimate is from the 43-101 Compliant Report; Technical Report,
Northumberland Project, Nye County, Nevada, USA, July 15, 2006 by
Mine Development Assoc. for NewWest Gold Corp. The gold cut-off
grades (expressed in ounces of gold per ton) for the Northumberland
Project measured, indicated and inferred resources are 0.01 for
oxide material, 0.04 for shallow sulfide material and 0.10 for deep
sulfide material. The inferred silver resource includes only silver
lying within the modeled gold zones and within blocks that exceed
the gold cut-off grades; no silver cut-off is applied. The Sandman
mineral resource expressed is based on the technical report
prepared by MDA as of May 31, 2007. The cut-off grade (expressed in
ounces of gold per ton) for Sandman Project measured, indicated and
inferred resources is 0.01 oz Au/ton for all of the shallow
deposits and 0.02 oz Au/ton for the deeper zones at the Southeast
Pediment deposit.
Except for the statements of historical fact contained herein,
certain information presented constitutes "forward-looking
statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements, including but not limited to, those with respect to
potential expansion of mineralization, potential for production and
size of mineralized zone, and size of exploration program involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievement of Fronteer to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such factors include, among others, risks related to
international operations and joint ventures, the actual results of
current exploration activities, conclusions of economic
evaluations, uncertainty in the estimation of ore reserves and
mineral resources, changes in project parameters as plans continue
to be refined, future prices of gold and silver, environmental
risks and hazards, increased infrastructure and/or operating costs,
labor and employment matters, and government regulation as well as
those factors discussed in the section entitled "Risk Factors" in
Fronteer's Annual Information form and Fronteer's latest Form 40-F
on file with the United States Securities and Exchange Commission
in Washington, D.C. Although Fronteer has attempted to identify
important factors that could cause actual results to differ
materially, there may be other factors that cause results not to be
as anticipated, estimated or intended. There can be no assurance
that such statements will prove to be accurate as actual results
and future events could differ materially from those anticipated in
such statements. Fronteer disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Accordingly,
readers should not place undue reliance on forward-looking
statements.
NEWS RELEASE 08-04
Contacts: Fronteer Development Group Inc. Mark O'Dea, Ph.D,
P.Geo President and CEO (604) 632-4677 or Toll Free: 1-877-632-4677
Fronteer Development Group Inc. Glen Edwards Media Relations (604)
632-4677 or Toll Free: 1-877-632-4677 Email: info@fronteergroup.com
Website: www.fronteergroup.com
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