Freegold Ventures has signed an agreement with a subsidiary of South32, which gives the latter an option to earn a 70% interest in the Shorty Creek project, in exchange for contributions towards future exploration projects.
Under the terms of the agreement, South32 is required to contribute at least $10m in exploration funding over a four-year option period, during which Freegold will act as the operator of the project.
South32 will take a decision within 30 days whether to fund a further tranche, once all the exploration data and information has been made available by December 31 of each year of the option agreement. The company has already committed $2m to fund the first exploration project.
The Shorty Creek project is located in the US state of Alaska and was identified as having significant porphyry potential by Freegold in late 2014.
Following drilling, the mineralised zone at Shorty Creek was expanded to an area more than 750m x 300m.
In case South32 withdraws prior to exercising its option, the deal will lapse and the company will have no further interest in or claim to the project.
Other exploration targets within the property are the Quarry target, where oxidized porphyritic rock with stockwork veining returned values of 500 ppm copper in rock samples.
In April 2017, South32 signed an option agreement with Trilogy Metals for Upper Kobuk Mineral Projects situated in Alaska’s Ambler Mining District.
South32 produces bauxite, alumina, aluminium, energy and metallurgical coal, manganese, nickel, silver, lead and zinc at its operations in Australia, Southern Africa and South America.