Fronteer Gold outlines US$48 million exploration program

With cash and short-term deposits of roughly US$100 million, Fronteer Gold (FRG-T, FRX-X) has more than enough money to pay for the US$48 million global exploration program it has outlined for 2011.

Fronteer also has available for sale about US$287.76 million worth of securities, including the 52.1 million shares that it expects to receive from the sale of its uranium assets in Labrador to Paladin Energy.

The company expects to advance its Long Canyon gold project in Nevada to the feasibility and permitting stage before the end of the year. Fronteer’s US$30 million work program includes more than 100,000 metres of exploration and development drilling; updating the resource in the first half of 2011, inclusive of step-out results; and finishing an updated preliminary economic assessment in the first six months of the year. It also expects to complete an additional resource update near the end of the year. 

Also in Nevada at its Northumberland deposit, Fronteer will spend US$10 million on a work plan including the completion of a 280-metre decline early this year to access high-grade domains of underground mineable sulphide gold mineralization. So far the company has completed 95 metres of the decline. Fronteer is planning an initial underground drill program of 4,000 metres and will collect bulk samples for metallurgical testwork.

And at Sandman, a high-grade epithermal gold system in Nevada under option to Newmont Mining, a production decision is anticipated by June. Newmont is six months into its final year of a three-year earn-in agreement with the option of earning an initial 51% interest in the project by making a positive production decision by June 2011. The budget through to June  is US$3 million and is focused on three of the four known gold deposits, as well as conducting property-wide exploration. Planned work activities include an exploration and development drill program starting in the second quarter, column-leach testing, waste-rock characterization, geotechnical evaluation and hydrological work.

Meanwhile at its joint-venture in northwestern Turkey called Halilaga, a copper-gold porphyry project, Fronteer is planning an initial 10,000 metre drill program followed by a first resource estimate, also by year-end. Drilling has identified copper-gold mineralization over a strike length of 1,200 metres and a width of 750 metres, with thicknesses of up to 600 metres.

The Central Zone at Halilaga remains open for expansion in all directions. Fronteer will spend US$2.2 million in exploration development that includes a 10,000 metre drill program in the main Central Zone, and testing the porphyry targets outside the zone. Fronteer  anticipates completing the first resource estimate on Halilaga by year-end.

At presstime in Toronto, Fronteer was trading at $9.11 per share. Over the last year it has traded between a low of $4.04 per share (Feb. 5 2010) and a high of $12.22 per share (Dec. 17 2010). The company has about 150.5 million shares outstanding.