PRECIOUS METALS — Newmont picks up Alaskan gold play

The Alaskan subsidiary of Newmont Mining (NEM-N) has optioned the Gold Dust property in the Tintina gold belt of eastern Alaska from Vancouver’s Great Quest Metals (GQ-V).

Newmont Alaska can buy the 5,600-acre property by making advanced royalty payments and committing to unspecified exploration expenditures. The company paid US$40,000 on signing, with payments scheduled to rise to US$100,000 per year by 2004. Newmont is also required to spend US$200,000 by the end of 2001, including US$50,000 per year in 1999 and 2000.

Newmont can withdraw from the agreement at any time. However, if the project reaches production, Great Quest will receive a 5% net smelter return royalty on precious metals and a 3% royalty on other minerals. Under the terms of a 1998 agreement, Quest will pay its sister company, Shiega Resources (SHG-V), US$2 million of the royalty proceeds.

Gold Dust, 100 miles northeast of Fairbanks in the Circle mining district, contains three target areas outlined by soil sampling. Shiega drilled 18 holes in the Western zone, the most significant hole hitting 180 ft. of 0.027 oz. gold per ton. Trenching across part of the Central zone cut 120 ft. grading 0.025 oz. gold.

Newmont and Great Quest believe the property has potential for hosting a Pogo-like gold discovery in Cretaceous-age intrusives. Gold Dust hosts many of the same geochemical signatures as the Pogo deposit to the south and the Fort Knox mine to the west.

Gold Dust is not Newmont’s first acquisition in the Circle area. The major controls 60 sq. miles in the district. Newmont also owns exploration land around the Pogo area, as well as elsewhere in Alaska.

The company recently sold to Kinross Gold (K-T) its 65% interest in the True North deposit near Fairbanks.