Rainy River Resources Ltd. (TSX VENTURE: RR) ("Rainy River" or the
"Company") is pleased to announce an updated mineral resource
statement for the Rainy River Gold Project ("RRGP") in Northwestern
Ontario. Mineral resources were estimated by SRK Consulting
(Canada) Inc. ("SRK") and are reported in accordance with Canadian
Securities Administrators National Instrument 43-101. Mineral
Resources above a 450 metre depth from the surface are considered
to be amenable to open pit extraction, whereas mineral resources
below this are considered to be amenable to underground extraction.
Potential open pit mineral resources are reported at a cut-off
of 0.35 g/t gold, whereas potential underground mineral resources
are reported at a cut off of 2.5 g/t gold. The consolidated mineral
resource statement for the RRGP is tabulated in Table 1.
Highlights
-- 3.42 M oz gold in Measured and Indicated classes
-- 3.17 M oz gold in Inferred class
-- RRGP reports Measured resources for the first time
-- Infill program demonstrates improved continuity
Table 1. Consolidated Mineral Resource Statement(i), Rainy River Gold
Project
SRK Consulting (Canada) Inc., February 24, 2011.
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Tonnes Au Au Ag Ag
Category '000s g/t ounces g/t ounces
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Open Pit(ii)
Measured 14,707 1.21 572,272 1.84 869,332
Indicated 77,934 1.05 2,639,850 2.24 5,615,597
Measured and
Indicated 92,641 1.08 3,212,122 2.18 6,484,929
Inferred 104,591 0.80 2,702,754 2.31 7,781,272
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Underground(ii)
Measured 39 5.66 7,149 2.38 3,009
Indicated 1,197 5.18 199,147 3.30 127,019
Measured and
Indicated 1,236 5.20 206,296 3.27 130,028
Inferred 3,831 3.83 472,029 2.62 322,811
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Combined Mining
Measured 14,746 1.22 579,421 1.84 872,341
Indicated 79,131 1.11 2,838,997 2.26 5,742,616
Measured and
Indicated 93,877 1.13 3,418,418 2.19 6,614,957
Inferred 108,422 0.91 3,174,783 2.32 8,104,083
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(i) Mineral resources are reported in relation to an elevation determined
from conceptual pit shells, and not all of the inferred resources lie within
the optimized pit shell. Mineral resources are not mineral reserves and do
not have demonstrated economic viability. All figures are rounded to reflect
the relative accuracy of the estimate. All assays have been capped where
appropriate.
(ii) Open pit mineral resources are reported at a cut-off of 0.35 g/t gold,
underground mineral resources are reported at 2.5 g/t gold. Cut-off grades
are based on a gold price of US$1,025 per ounce gold and gold recovery of
88% for open pit resources and 90% for underground resources, without
considering revenues from other metals.
Commentary
"We are very pleased to have increased our global resources to
3.42 M ounces in Measured and Indicated and 3.17 M ounces in
Inferred, a significant increase from 2010," commented Raymond
Threlkeld, President and CEO of the Company. "In addition, last
year's infill program has greatly enhanced the quality of the
resource, reporting Measured mineral resources for the first time
on the project. The 107,000 metres that we drilled last year
demonstrated the in-pit continuity that will allow us to proceed
with scoping studies to determine the optimum pit size and mining
methods. We will be aggressively expanding our exploration in 2011
to over 100,000 metres of drilling, to add to the potential in-pit
ounces from the South and Cap Zones, and to conduct regional
exploration outside the known resources to begin realizing the
district potential at Rainy River."
Technical Description
Gold mineralization at the Rainy River Gold Project has a
volcanogenic origin associated with minor amounts of silver, copper
and zinc. Sulphide zones are generally sub-parallel to foliation,
which strikes at approximately 300 degrees and dips 50 degrees to
70 degrees to the south. As of December 31, 2010 the estimated gold
mineral resource is based on data received from 836 diamond drill
holes totaling 380,069 metres. Since the previous mineral resource
estimate (see press release dated March 4, 2010) the Company has
drilled an additional 174 diamond drill holes totaling 107,042
metres.
Mineral resources are reported over an area measuring
approximately 2 kilometres x 1 kilometre to a depth of 700 metres.
Mineral resources have been estimated using a geostatistical block
model approach constrained by seven major zones sub-divided into 23
resource domains. Block size was set at cubes 5 metres in size.
These zones are termed the ODM/17, 433, HS, New, Cap, 34 and other
Zones. The bulk of the mineral resources occur in the ODM/17 and
433 Zones. Metal grades were estimated using ordinary kriging as
the principal estimator. Metal grades were estimated separately in
each domain from capped composite data within that domain. Kriging
parameters were derived from variogram models with grade estimation
completed in two successive passes. The first estimation pass
generally considered a search neighbourhood adjusted to full
variogram ranges. The size of the search ellipse was usually
doubled for the second estimation pass. Mineral resources are
classified as Measured, Indicated and Inferred, considering various
aspects including geological continuity, data quality, block
distance from the nearest informing composites, and variography
results.
A pit optimizer was used to determine the quantities of material
offering "reasonable prospects for economic extraction" by an open
pit. Results from the pit optimization are used solely for the
purpose of reporting mineral resources that have "reasonable
prospects for economic extraction" by an open pit and do not
represent a thorough economic study as is required to evaluate
mineral reserves. SRK considers that the material above the final
depth of the conceptual pit shell (450 metres below the surface)
offers reasonable prospects for economic extraction from an open
pit, because ongoing drilling results suggest that the zone of gold
mineralization is broader than currently modeled and that new
drilling information should positively impact future pit
optimizations. Input assumptions used for the conceptual pit
optimization and to derive the cut-off grade of 0.35 g/t gold for
open pit mineral resources include:
-- Gold price; US$1,025/oz (3 year trailing average as of December 31,
2010)
-- 88% gold recovery
-- $1.70/t mining cost per tonne ore
-- $6.46/t processing costs
-- $0.90/t general & administrative costs
-- 20,000 tpd processing throughput (combined pit and underground)
-- 10% dilution
-- 54 degrees wall angle (West, East), 50.5 degrees wall angle (South),
40.5 degrees wall angle (North)
The block model quantities and grade estimates below 450 metres
were also reviewed to determine the portions of the Rainy River
deposit having "reasonable prospects for economic extraction" from
an underground mine. Assumptions used to derive the cut-off grade
of 2.5 gpt gold for underground resources include:
-- Gold price; US$1,025/oz (3 year trailing average as of December 31,
2010)
-- 90% gold recovery
-- $55/t mining cost per tonne ore
-- $6.46/t processing costs
-- $0.90/t general & administrative costs
-- 20,000 tpd processing throughput (combined pit and underground)
-- 20% dilution
Year on Year Review:
The increase in reported mineral resources over the previous
resource estimate disclosed in March 2010 is attributable to a
combination of factors including:
-- Significant increase in drilling (107,042 metres) and sampling data
(72,000 additional samples), leading to increased grade continuity;
-- A better understanding of the geological model and its secondary
structural controls, enabling reduced block size, revised variography
and better domaining; and
-- Improved metallurgical recovery and geotechnical parameters for open pit
slope design.
Sensitivity Analysis:
Block model quantities and grade estimates at Rainy River are
sensitive to the selection of cut-off grade. The sensitivity of
block model quantities for open pit (above 450 metres depth) and
underground material (below 450 metres depth) to gold cut-off grade
is presented in Table 2 and Table 3 below.
Table 2: Block Model Quantities and Grade Estimates(i) at Various Cut-off
Grades - Potential Open Pit Material
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Cut off
grade Tonnes Grade Grade Au Ag
Au g/t Category '000s Au g/t Ag g/t Ounces Ounces
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0.30 Measured 16,449 1.12 1.77 590,410 937,660
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Indicated 92,240 0.94 2.14 2,788,760 6,349,501
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Inferred 131,757 0.70 2.15 2,984,892 9,121,949
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0.35 Measured 14,707 1.21 1.84 572,272 869,332
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Indicated 77,934 1.05 2.24 2,639,850 5,615,597
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Inferred 104,591 0.80 2.31 2,702,754 7,781,272
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0.40 Measured 13,350 1.30 1.88 555,947 808,682
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Indicated 67,694 1.16 2.33 2,516,737 5,067,116
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Inferred 86,696 0.89 2.42 2,487,478 6,811,674
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Table 3: Block Model Quantities and Grade Estimates(i) at Various Cut-off
Grades - Potential Underground Mining Material
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Cut off
grade Tonnes Grade Grade Au Ag
Au g/t Category '000s Au g/t Ag g/t Ounces Ounces
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2.5 Measured 39 5.66 2.38 7,149 3,009
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Indicated 1,197 5.18 3.30 199,147 127,019
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Inferred 3,831 3.83 2.62 472,029 322,811
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3.0 Measured 31 6.41 2.58 6,484 2,609
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Indicated 833 6.25 3.67 167,235 98,295
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Inferred 2,835 4.21 2.86 384,153 260,276
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(i) The reader is cautioned that the figures presented in Table 2 and Table
3 should not be misconstrued with the mineral resource statement presented
in Table 1. The figures are only shown to illustrate the sensitivities of
the block model quantities and grade estimates to the selection of cut-off
grade.
Qualified persons
The mineral resource statement was prepared by Dorata El-Rassi,
P.Eng,(APEO #100012348) and Glen Cole, P.Geo (APGO #1416), of SRK,
both "independent qualified persons" as that term is defined in
National Instrument 43-101. SRK's Technical Report will be filed on
SEDAR within the prescribed 45 days following the date of issuance
of this news release.
Rainy River's exploration program in Richardson Township is
being supervised by Kerry Sparkes, P.Geo. (APEGBC #25261),
Vice-President Exploration and a Qualified Person as defined by
National Instrument 43-101. Garett Macdonald, P.Eng. (PEO
#90475344), is the person responsible for the content of this news
release. The Company continues to implement a rigorous QA/QC
program to ensure best practices in sampling and analysis of drill
core. The procedures of the QA/QC program are detailed on Rainy
River's website at www.rainyriverresources.com.
About Rainy River
Rainy River is a Canadian precious metals exploration company
whose key asset is the Rainy River Gold Project. With approximately
$130 million in its treasury, the Company is well funded to conduct
a dual-focused drilling program consisting of: 1) definition
diamond drilling of the main gold resources in preparation for
scoping and prefeasibility studies, and 2) selective diamond drill
testing of high-priority gold targets defined primarily by RC
drilling within the large gold system centered in Richardson
Township. The Company's property is extremely well located in the
southwestern corner of Northern Ontario near the U.S. border. It is
accessed by a network of roads and is close to hydro-electric
infrastructure. The Rainy River district has a skilled labour force
and is one of the lowest-cost areas for mineral exploration and
development in Canada. The Company is also working to advance the
early-stage discoveries at its TPK Joint Venture Property, also in
Ontario, where it can earn a 51% interest in the property from
Northern Superior Resources. Ontario has low political risk and,
according to the annual Fraser Institute global survey of the
mining industry, has consistently ranked as one of the top
jurisdictions embracing mineral development.
RAINY RIVER RESOURCES LTD.
Raymond Threlkeld, President & CEO
This release includes certain statements that may be deemed to
be "forward-looking statements". All statements in this release,
other than statements of historical facts, that address events or
developments that management of the Company expects, are
forward-looking statements. Although management believes the
expectations expressed in such forward-looking statements are based
on reasonable assumptions, such statements are not guarantees of
future performance, and actual results or developments may differ
materially from those in the forward-looking statements. The
Company undertakes no obligation to update these forward-looking
statements if management's beliefs, estimates or opinions, or other
factors, should change. Factors that could cause actual results to
differ materially from those in forward-looking statements, include
market prices, exploration and development successes, continued
availability of capital and financing, and general economic, market
or business conditions. Please see the public filings of the
Company at www.sedar.com for further information.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Rainy River Resources Ltd. Liz Caridi Director of
Investor Relations and Corporate Governance (604) 639-4497
lcaridi@rainyriverresources.com www.rainyriverresources.com
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