Sunday, February 20, 2011

Frontier Gold: Is the Andewa Deposit Legit?

Frontier Resources (FNT.AX) has move from sub-..10 to mid .30's in a week -- the main reason is the announcement of exploratory drilling information at the Andewa prospect on the island of New Britain in Papua New Guinea.

Frontier has 7 deposits in Papua New Guinea - the main source of value is Andewa in the Island of New Britain- the firm is implying that there is gold deposits between 14 to 66 g/ton in this region which stretches for about 7 km, at a good seam -- in comparison Barrick Gold, the world's largest gold producer averages about 2 g/ton, so this would be 7-33x more concentrated.

Actually Frontier also has 2 projects in Tasmania, but again the best potential is the Andewa project in PNG. (actually the Bulago deposit is also promising, see below)

I sort of don't believe the numbers. I was searching through the world's richest gold mines and all have gold per ton numbers below 3 g/ton see:
This would be by far the most rich gold find in the database --well so far I've searched Barrick's deposits (in their annual report, and the Polyrus Gold (Russia) deposit which is #2 on the list and this averages 1.5 g./ton.

The newest release has some geological data but not nearly enough to establish reserve numbers - so far this is all in the beginning stages.

The firm is really small, having to raise capital even for exploratory drilling. (they had to raise $A1.1M to survey the region -- Frontier will certainly have to raise capital to develop the project. Actually the deposit looks like it is close to the coast, so could be served by water transport, see a map of the projects in the 2010 Annual Report, p. 3:

Previously in 3/10 Frontier announced another 67 g/ton deposit, this time on the main island of PNG, in the Bulago deposit, but this didn't generate much excitement -- I don't know why all of a sudden the latest report has really made the stock go off, but the previous ones did not. (more word of mouth, or a better geological survey, actually I don't know).

Anyway I'll be researching more and will try to find out if the find in legit.


Riya said...

I don't think Frontier have implied that if Andewa hosts a mineralised system it is going to grade between 14 to 66 g/ton. They may have reported trenching or rock chip/float samples at these kind of grades, but nowhere have they implied the deposit itself (should it actually exist) would grade (other than perhaps in small isolated intersections) at these kind of grades. Personally, I'm hoping for a very high tonnage (several hundred mt) epithermal Au deposit with moderate overall grades in the region of 1.5 to 4 g/t with possibly some Ag/Cu/Mo credits.

Riya said...

Limited drilling done to date within Andewa caldera (from FNT ann.): "Frontier has previously drilled gold mineralisation at Komsen on the western margin of the CCZ from surface to a maximum depth of 320m below surface in a limited program, with drill intercepts containing significant base metals such as 1m of 19.0 g/t gold + 119.0g/t silver + 10.3% zinc + 0.22% copper, 2m of 5.43 g/t gold + 95 g/t silver + 11.1% zinc + 2.3% lead + 0.12% copper and 0.5m of 2.55 g/t gold + 36 g/t silver + 0.48% zinc + 0.19% copper"