Location Makes Northern Freegold Of Special Interest
Tintina Gold Belt Attracts Recent Investor Interest
by Norman Duncan
Summer is almost over and it's been a great one here on the west coast. I commiserate with my eastern friends who have had a
less than ideal season, but we in Vancouver deserve a great summer after the winter that was.
As with the weather, your take on the markets depends on where you have been. Those who have been expecting a rapid and continuing rise in commodity prices have been by and large disappointed as have the perma-bears. Those who have invested in the overall market have made a handsome profit over the past six months including an unusual summer rally.
While I remain confident that precious metals and commodities in general remain a good long-term investment, I emphasize the long term. Especially with us going into the late summer/early fall period of traditional market weakness I would advise caution when it comes to the markets.
If we get a decent drop in the markets over the coming few weeks that would be a good time to look to add to your long-term positions. Overall valuations in the current market are average at best, so the bargain days of last spring are over for now. Patience is the watchword for me in the coming weeks. I suspect that the perma-bears will be growling for a while before we come into a renewed upward market. In the long term I remain very concerned that most people haven't truly grasped the consequences of the massive government spending occurring around the world.
The huge injections of liquidity made by the Nouveau-Keynesian governments of the world will, I believe, result in grossly inflated stock valuations (i.e. a much higher stock market) and a bout of inflation that we haven't seen since the 1970's.
This belief underlies my long-term investment strategy. Gold is an important, but not the only, part of this strategy. In that vein, I have decided to look at an interesting early stage gold play in the Yukon Territories, my old stomping grounds.
Northern Freegold Resource Ltd. is a junior exploration company based here in Vancouver with properties in the Yukon and Arizona. The project that interests me the most is the Freegold Mountain Project northwest of Carmacks in the Yukon. The property lies in the Dawson Range portion of the Tintina Gold Belt. Mineralization is associated with Cretaceous intrusive bodies and adjacent epithermal vein and breccia systems.
There are several known zones within the 35 kilometre long project area, with the Nucleus and Tinta zones being the focus of current exploration. The company is currently undertaking a 12,000 metre diamond drill program on the property and results to date have been interesting. The best intersection to date of the 2009 program has been 25 metres grading 2.45 gpt gold in drill hole 131. As of the end of July Northern Freegold has outlined an inferred resource containing over 1 million ounces at 0.50 gpt gold in the Nucleus zone and the zone is open in all directions and at depth.
In addition, there are inferred resources of 1.39 million tonnes grading 1.62 gpt gold, 44.93 gpt silver, 0.26% copper, 0.84% lead and 1.04% zinc in the Tinta zone which lies about 15 kilometres to the southeast of the Nucleus zone Drilling continues on the property as this article is being written. In addition to the drill program, the company is conducting a surface exploration program on the balance of the property. Three exploration crews are undertaking mapping, re-logging of old drill core, trenching and stream/soil sampling.
It will be interesting to see what new results come from this part of the program.
Northern Freegold Resources Ltd. Trades on the TSE Venture Exchange under the symbol NFR. There are 96 million shares outstanding on a fully diluted basis and the company has about $11 million in working capital following several financings at a price of $0.50 or more.
At the time of writing, the shares are trading in the $0.45 range with an annual high:low of $0.75:$0.135 with daily trading volumes in the 100,000 share range of late. The management team and directors are particularly experienced in the Yukon and northern B.C.
I like this company as a speculative play on gold, but also because its main property lies in the Tintina Gold Belt which has become a focus of investor's interest of late. I encourage those of you who are looking for a speculative gold play to take a look at Northern Freegold but, as always, caveat emptor.
This article is solely the work of Norm Duncan, a registered investment advisor at Canaccord Capital Corporation. The views (including any recommendations) expressed in it are those of the author alone, and are not necessarily those of Canaccord Capital. The information contained herein is drawn from sources believed to be reliable, but its accuracy and completeness is not guaranteed, nor in providing it do the author or Canaccord Capital assume any liability. The holdings of the author, Canaccord Capital, its affiliated companies and holdings of their respective directors, officers and employees and companies with which they are associated may, from time to time, include the security mentioned in this article. www.canaccord.com.
