Fronteer Development Group Inc.
Fronteer Development english
Fronteer Development Group
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Fronteer Development Group
Toronto-Ticker: FRG
WKN: 533050
Sektor: Exploration
Gold exploration is an extremely exciting yet inherently risky business. The
smart exploration company manages this risk by ‘farming out’ a percentage
interest in its properties to quality joint venture partners, who earn their
interest by funding the initial high-risk phases of exploration. As such, the
smart Exploration Company virtually eliminates risk to its capital while still
remaining exposed to significant success in the event of a major gold discovery.
In addition to preserving capital, this business model has many advantages over
the more common approaches to mineral exploration. For example, this model
enables a company to build up a world class technical team at low cost, since
key individuals can be charged-out to specific projects. In addition, the
company is not forced to undergo the corrosive dilution and decrease in
shareholder value associated with repeated equity financings since its need for
capital is less than if it were funding exploration itself. Finally, this model
gives a company up-side exposure to multiple projects simultaneously at
virtually no cost to the company. As such, its future does not rely on any one
particular project.
In the gold exploration business there are very few companies who have had the
technical and business savvy to implement this type of business model. Those who
have are well positioned to capitalise on the current turnaround in the gold
market. For the gold stock speculator, such a company represents the ultimate
low-risk, high-yield equity investment. Such a company has recently emerged in
Canada and is listed on the Toronto Stock Exchange and the Frankfurt Stock
Exchange. That company is Fronteer Development Group Inc.
Fronteer is a young, ambitious and well financed gold Exploration Company with
five active exploration projects in Canada, four of which are funded 100% by
joint venture partners. Their commitment to exploration on Fronteer’s properties
over the next 12 months is approximately USD 1.9 million. Three projects are in
the prolific Red Lake Gold Belt, where Placer Dome is a key partner. Other
project areas include the Central Mineral Belt of Labrador and the Bear Province
of the NWT.
The Red Lake Belt is currently the ‘high-grade’ gold capital of North America
and is home to over 20 million ounces of gold in past production and current
reserves. Fronteer is the largest landholder in the eastern part of the belt and
controls over 64,000 acres of prospective ground.
Fronteer’s highest profile partner in the belt is Placer Dome, one of the
world’s largest gold producers. From its Campbell Mine operation alone, situated
in the Red Lake Belt, Placer Dome has produced over 10 million ounces of gold
since 1947. Placer Dome can earn a 65% interest in three of Fronteer’s
properties in the Red Lake Belt by spending USD 2.5 million on exploration with
a minimum annual commitment of USD 0.5 million. Fieldwork is currently underway
on these properties to identify drill targets, which will be drill tested as
early as February 2004. In addition to being an important partner, Placer Dome
is also one of Fronteer’s largest shareholders with a 5% equity position in the
company.
Drilling has already been conducted on two separate properties in the Red Lake
Belt optioned to another partner – Red Lake Resources. In the spring of 2003, an
11-hole drill program tested for the first time, two newly discovered,
4-kilometres long gold zones that have significant growth and grade potential.
Of the 11 holes drilled to date, all intersected economically interesting gold
mineralization ranging from 1.0 metres of 23 g/t gold to 6.0 metres of 2.0 g/t
gold. A follow up drill program will commence in February 2004 to further test
these new exciting gold discoveries.
Fronteer’s Dixie Lake Property, situated 25 kilometres by road from the
headframe of Placer’s Campbell mine and Goldcorp’s Red Lake mine, is currently
the company’s most advanced stage project, and the focus of a major drill
program. Fronteer has optioned this property to Alberta Star Development Corp
who has a first year commitment of USD 0.5 million. A 12 hole, 2000 metre
program is currently underway.
Between 1988-1990, Teck Corporation drilled approximately 30 shallow, widely
spaced holes on this property and defined a small resource area containing
approximately 150,000 ounces of gold. This resource area is open in all
directions and contains a number of high-grade drill intercepts of economic
grade over mining widths. Fronteer’s current drill program will further
delineate the distribution of gold mineralization at depth and along strike with
a focus on high-grade gold veins. Fronteer believes that this property has the
potential to yield 500,000 to 750,000 ounces of gold.
In addition to the Red Lake Belt, Fronteer is also extremely active in Labrador
and the NWT exploring for gold, copper and silver. Fronteer has been successful
in attracting partners on these projects as well and will bring them to the
drill stage by the summer of 2004.
Fronteer is a well-positioned and well-capitalised company with over USD 3.0
million in working capital and exposure to five world class exploration
projects in Canada. It has a highly qualified management team and Board of
Directors committed to building an outstanding project portfolio and maximising
shareholder value. Fronteer will continue its aggressive acquisition strategy
on an international scale exploiting the strengths of its management team and
board.
Conclusion: In short, Fronteer represents a very attractive, potentially high-
yield investment opportunity with a lower risk factor than most of its peer
group. Red Lake exploration companies have been amongst the star performers on
the Toronto Stock Exchange over the past 12 months where positive exploration
news can result in strong price increases. Its business model combined with
committed partners, a healthy treasury, first rate projects and strong
management, make Fronteer positioned for success.
Listen to the company’s audio statement by selecting the following URL:
http://www.corporate-audio-news.de/av/data?in=CA35903Q1063&id=0311121543&l=en
end of message, (c)DGAP 12.11.2003
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WKN: 533050; ISIN: CA35903Q1063; Index:
Listed:
121552 Nov 03
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