Fortress Minerals banks on Russia with Svetloye project

Getting to Fortress Minerals‘ (FST-V) flagship Svetloye property in the Russian Far East isn’t easy. Svetloye lies 750 km west of Magadan, a port city on the sea of Okhotsk, where the harbor is frozen nearly eight months of the year and the city rests on frozen subsoil.

Supplies and personnel are typically flown to Svetloye on commercial aircraft, on the 1,300 km route from Khabarovsk to Okhotsk, and then transported by helicopter to the site. A winter road can only be used from December through March.

But clearly Fortress Minerals thinks the propertylike many mining prospects located in the middle of nowhereis well worth the effort. Highlights from six recent drill holes at Svetloye’s Amy prospect included one intercept of 91 metres grading 2.67 grams gold per tonne and another that cut 52.2 metres grading 2.97 grams gold per tonne. The Amy prospect is one of nine prospects within the 8,640-hectare Svetloye exploration licence.

So far resources have been estimated for just three of the nine mineralized zones: Elena, Amy and Tamara. Data suggests that the project has an inferred resource of roughly 16.23 million tonnes, grading 2.11 grams gold per tonne for total contained gold of 1.1 million oz. The resource was calculated on the basis of 123 drill holes totaling 18,557 metres and more than 7,000 samples.

Fortress has mapped over 17 sq km of alteration within the licence area, which lies in the basin of the Alalindya and Onemna rivers, both of which are tributaries of the Ulenma River. The alteration areas consist of a northwesterly trending belt across the project territory that is about 10 km long by up to 4 km wide.

Most of the mineralization is at surface on hill tops and about 70% of the above cut-off grade resource blocks occur within 50 metres of surface, the company reports.

Gold mineralization at Svetloye was formed by a high-sulphidation epithermal system and is associated with zones of vuggy silica, quartz-alunite and quartz-dickite-kaolinite alteration.

The style of mineralization is similar to Barrick Gold‘s (ABX-T, ABX-N) Pierina gold mine in the Andean Cordillera of north-central Peru, and of its Veladero gold mine, in San Juan province of Argentina, to the south of Barrick’s Pascua-Lama project.

Fortress currently owns 100% of the project, with Gazprombank holding an option to acquire a 51% interest. Gazprombank is the banking arm of Russian energy giant Gazprom.

Svetloye is about 260 km southwest of Polymetal‘s (PTML-L, POYMY-O) Khakanja low-sulfidation gold-silver mine, which has been in production since 2004.

In August, Fortress reported that a company insider had agreed to provide a C$4 million loan at an interest rate of prime plus 2% for short-term working capital purposes. As a condition, the lender will receive a bonus payment of 1.05 million shares in Fortress.

Apart from Svetloye, Fortress has acquired a 100% stake in the Dubaki exploration licence, 20 km to the northeast. The company also has properties in Mongolia and Nicaragua.

At press-time, Fortress was trading at about 24.5 a share, at the low-end of its 52-week range of 21-$1.94.

The Vancouver-headquartered company has 84.89 million shares outstanding.