PFN, Freegold ink deal with Lonmin

Vancouver — Harry Barr-led Pacific North West Capital (PFN-T) and Freegold Ventures (ITF-V) have entered into an agreement with London-based Lonmin, the world’s third-largest primary producer of platinum group metals.

Lonmin can earn up to a 70% interest in the Union Bay Platinum project in southeastern Alaska by spending US$3.8 million on exploration through to 2006 and US$750,000 in each succeeding year until it delivers a full feasibility study.

Six zones of multi-gram platinum values have been identified. A 4-hole, 356-metre drill program in September 2001 intersected up to 11.2 grams platinum per tonne over half a metre.

This year Lonmin is required to spend US$815,000 on exploration. It will drill several outcrop targets and attempt to define additional targets.

In the event of a production decision, Lonmin will be required to arrange the required financing on terms acceptable to all parties. Once production is under way, PNWC and Freegold will each repay their share of the financing costs and contribute to operating costs on a pro rata basis.

Under an earlier agreement, signed in April, PNWC can earn half of Freegold’s interest in the project.

Meanwhile, at PNWC’s River Valley project, near Sudbury, Ont., the Phase 6 drill program continues to intersect encouraging platinum and palladium values.

Two rigs are turning on the property: one is testing the Dana Lake area, while the other is stationed 3 km to the southeast, on the Lismer’s Ridge area. The $5.3-million campaign is designed to expand the mineralized area. An updated resource estimate is expected in October.

The River Valley project is a 50-50 joint venture between Anglo American Platinum (AAPTY-O) and PNWC. Anglo Platinum can earn a 60% interest in the property by completing a feasibility study, and an additional 5% by advancing it to production. Including this year’s budget, Anglo Platinum has so far committed more than $12 million to the project.

Highlights from recent drilling are as follows:

— Hole DL-116 intersected 101 metres averaging 0.05 gram gold, 0.26 gram platinum and 0.73 gram palladium per tonne starting at a down-hole depth of 269.5 metres. This included several higher-grade intervals, such as 1 metre averaging 0.21 gram gold, 1.13 grams platinum and 3.97 grams palladium; 24.5 metres averaging 0.08 gram gold, 0.41 gram platinum and 1.21 grams palladium; and 1 metre averaging 0.2 gram gold, 1.31 grams platinum and 3.73 grams palladium.

— Hole DL-118 cut 61.5 metres averaging 0.1 gram gold, 0.57 gram platinum and 1.2 grams palladium starting at 229 metres down-hole. This included numerous short, higher-grade intervals, such as 0.5 metre averaging 0.31 gram gold, 1.8 grams platinum, 5.4 grams palladium, and 0.5 metre of 0.24 gram gold, 3.4 grams platinum and 9.6 grams palladium.

— Hole DL-120 cut 11 metres averaging 0.09 gram gold, 0.5 gram platinum and 1.44 grams palladium starting at 224.2 metres down-hole.

— Hole LR-93 cut 18.5 metres of 0.13 gram gold, 0.64 gram platinum and 1.93 grams palladium starting at 266 metres down-hole. This included numerous shorter intervals, such as: 4.5 metres averaging 0.25 gram gold, 1.29 grams platinum and 4.46 grams palladium; 1.5 metres of 0.29 gram gold, 1.35 grams platinum and 5.62 grams palladium; and 0.5 metre of 0.32 gram gold, 2.14 grams platinum and 6.22 grams palladium.

— Hole LR-95 cut 28 metres of 0.07 gram gold, 0.42 gram platinum and 1.1 grams palladium starting at 233 metres down-hole. This included such shorter intervals as: 1.5 metres grading 0.16 gram gold, 1.16 grams platinum and 3.87 grams palladium, and 0.5 metre of 0.24 gram gold, 1.88 grams platinum and 6.62 grams palladium.

— Hole LR-96 cut 24 metres of 0.09 gram gold, 0.58 gram platinum and 1.54 grams palladium starting at 259 metres down-hole. This included numerous high-grade intervals, such as: 1 metre of 0.19 gram gold, 1.37 grams platinum and 4.47 grams palladium.

Mineralization is hosted in a steeply dipping gabbro-breccia unit that occurs nearly continuously over a strike length of several kilometres and is tested to a vertical depth exceeding 400 metres.

The Dana and Lismer’s Ridge prospects have a combined, in situ, measured and indicated resource of 18 million tonnes grading 0.34 gram platinum, 1.02 grams palladium and 0.06 gram gold per tonne, plus 0.02% nickel and 0.10% copper. This translates into a contained resource of 199,900 oz. platinum, 589,600 oz. palladium and 36,500 oz. gold for a grand total of 825,900 oz. combined platinum-palladium-gold. There is an additional inferred resource of 5.38 million tonnes averaging 0.29 gram platinum, 0.819 gram palladium and 0.05 gram gold, plus 0.02% nickel and 0.08% copper, for a contained resource of 50,200 oz. platinum, 141,800 oz. platinum and 8,600 oz. gold. The resource was calculated using a cutoff grade of 0.7 gram platinum-palladium (combined) per tonne.

The two principal mineralized zones, Dana Lake and Lismer’s Ridge, each boast a strike length exceeding 1 km, and delineation drilling will continue in both areas for at least another month. The rigs will then be moved to the southeast to evaluate PGM showings along an additional 5 km of the prospective intrusive contact. Among the targets there is the Varley showing, which returned surface values of up to 10 grams platinum-palladium per tonne.