The Gil Joint Venture is located within Alaska’s Fairbanks Mining District, where a belt of lode and placer gold mineralization has earned the region title as one of the largest gold producing areas in Alaska. Teryl is one of the region’s main holders of gold mining properties, with significant land holdings around and adjacent to Kinross Gold’s Fort Knox Mine. In addition to the Gil Joint Venture, Teryl holds a 50% option on the Fish Creek Claims from Linux Gold Corp. and a 10% net profit interest in Kinross’ Stepovich Claims, just to the southwest of the Gil. Fish Creek is north and adjacent to the Gil property, while the Stepovich is adjacent to and south of the Fort Knox deposit. Teryl also holds a 100% interest in its West Ridge property, located south of Kinross’ True North deposit.
       Last fall, Teryl Resources and Kinross released “significant” gold drill results for the Sourdough Ridge exploration area where the two companies spent much of its 2009 $1.5 million exploration budget. The program included 15,000 feet of R/C and core drilling, as well as a ground magnetometer survey. The objective was to delineate mineralized zones, establish a resource base for Sourdough Ridge and expand the resource for the Gil Joint Venture, and establish continuity of mineralization to be included in an updated NI 43-101 compliant resource estimate.
       “The gold assay results we have received to date from the 2009 drilling program are very positive on the Sourdough Ridge Zone and have the potential to significantly increase the total gold resource of the Gil deposit area. This is an important step in achieving our goal of developing a producing mine in the Fairbanks Mining District. The future potential for the Gil is very encouraging,” says Robertson.
       2009 assays returned gold values as high as 0.14 opt (4.79 gpt) over widths up to 105 feet. The drilling program indicated that a mineralized zone at least 1500 feet long remains open to the east. The Sourdough Ridge zone is adjacent to and east of the main Gil zone, which has a 2500 foot long mineralized zone ranging up to 80 feet thick and averaging 0.04 opt gold. Mineralization remains open both on strike and at depth. To date, more than $9 million has been spent to explore the Gil property.
       “Our Alaskan properties could contain significant deposits containing ore similar to that found at Fort Knox and True North. Once defined, the deposits could easily be put into production and processed at Kinross’ Fort Knox mill,” Robertson says.

       The big question for both Teryl Resources and its partner, Kinross Gold, one of the world’s leading gold producers, to answer is just how much gold there is to be mined at their Gil Joint Venture project. For Kinross, the greater the resource, the more important the project becomes in its effort to sustain operations at its Fort Knox mill. The facility can process up to 45,000 tonnes of ore per day. Kinross acquired the mine in 1998. Gold production was down slightly in 2009, but Kinross extended the mine’s economic life from 2012 to 2018 by expanding the open pit mine and completing a heap leaching operation this year.
       Kinross recently moved to secure a state permit to operate a heap leach gold recovery facility at the Fort Knox Mine. Heap leaching began last fall with gold production commencing in Q4 2009. The permit allows processing of stockpiled lower-grade ore, mineralized waste material tailings, as well as zones of lower grade ore not yet mined.
       That is where the importance of the Gil project becomes particularly important. Once the Fort Knox resource is completely exploited, Kinross will need to find new ore to feed its mill. Interestingly, Kinross recently extended a road about 3,000 feet along the Sourdough Ridge exploration area within the Gil project to facilitate soil sampling and magnetometer programs. The Gil deposit, which contains a 35% higher grade gold mineralization than the Fort Knox, lies within reasonable transport distance of the Fort Knox mill. The type of mineralization is also highly amenable to heap leach processing – which can produce gold at one-fourth the cost of milled gold, Robertson says.
       Kinross tipped its hand late last year when it offered to buy out Teryl’s 20% interest. The details of the offer are not known, but Teryl’s rejection appears a clear indicator that it believes the value of its Gil project may soon increase significantly.

       Kinross has approved a $1.52 million budget for the 2010 Gil exploration program that began in April, including a ground magnetometer survey, 11,000 feet of RC drilling and 5,000 feet of HQ-NG drilling at Sourdough Ridge and at the western portion of the area between the Main Gil and the North Gil. Fieldwork will involve mapping, soil and rock sampling and mobile metal ion (MMI) geochemical sampling. The goal of the program is to further delineate the strike extension of the project’s mineralized zones, to gather infill data between step-out holes to gain a better understanding of ore-zone continuity, and potentially update the project’s resource estimate.
       Teryl is well funded, with enough money in hand from recently exercised warrants and previous over-subscribed financings to fulfill its (20%) share of the $1.5 million 2010 exploration program, according to Robertson. The company recently received $704,200 from the exercise of warrants from an August 2009 private placement.
       An updated resource estimate for the Gil property, whether it is computed with 2009 data or on the basis of further exploration in 2010, will give both Teryl and Kinross a much clearer view of the economic value of the project. In the past, Kinross paid significant amounts to acquire properties: $420 million it paid for Fort Knox in 1998 and the $94 million paid for the True North deposit in 1999. Then there is the $1.2 billion Kinross paid for its Fruta del Norte project in Ecuador and the $3.3 billion cost to purchase its Russian Julietta Mine from Bema Gold in 2007.
       Teryl Resources President John Robertson says, “We anticipate the 2010 exploration program on the Gil Joint Venture property will produce additional significant gold results.”