The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Marketwire

Rainy River Resources' Preliminary Economic Assessment Anticipates 329,000 Ounces of Gold Annually Over 13+ Years at the Rainy River Gold Project

Wednesday, November 09, 2011

Rainy River Resources' Preliminary Economic Assessment Anticipates 329,000 Ounces of Gold Annually Over 13+ Years at the Rainy River Gold Project21:55 EST Wednesday, November 09, 2011TORONTO, ONTARIO--(Marketwire - Nov. 9, 2011) - Rainy River Resources Ltd. ("Rainy River" or the "Company") (TSX:RR) is pleased to announce receipt of a positive Preliminary Economic Assessment ("PEA") for its 100% owned Rainy River Gold Project ("RRGP") in northwest Ontario, Canada. The information presented below summarizes the results of a conceptual mine and processing scenario based on the June 29, 2011 NI 43-101 mineral resource estimate, which includes assay data up to February 27, 2011. All currency amounts in this press release are denominated in Canadian dollars ($) unless otherwise noted. HIGHLIGHTS OF THE PRELIMINARY ECONOMIC ASSESSMENT Combined open pit and underground operation, 13.2 year mine life Processing throughput averaging 31,340 tonnes per day (tpd) Life-of-mine average annual production of 329,000 gold ounces and 497,000 silver ounces Life-of-mine metal production of 4.3 million ounces of gold and 6.5 million ounces of silver Average cash cost US$417/ounce gold (net of silver credits) in first 4 years Life-of-mine average cash cost of US$553/ounce (net of silver credits) Life-of-mine pre-tax net present value (NPV 5%) of $786 million, internal rate of return ("IRR") of 19.4% and a payback of 3.4 years.1In the current metal price environment, pre-tax net present value (NPV 5%) of $2.5 billion, IRR of 42.5% and a payback of less than 2 years2; metal price sensitivities summarized in Table 1. Open pit pre-production capital costs of $681 million, including $103 million of contingency capital. Open pit total sustaining capital costs of $598 million, including $271 million from overburden and waste stripping, $247 million in equipment leases and $68 million in tailings dam construction. Underground pre-production capital costs of $67 million, commencing in 2015. Underground sustaining capital costs of $110 million. Environmental studies to-date suggests that 'no fatal flaws' are indicated for RRGP. Production anticipated in 2H/2015 for the open pit and 2H/2018 for the underground. Table 1 - Sensitivities to Metal Prices3Gold, Silver, US$/ozBase Case$1200 / $25$1400 / $30$1600 / $35$1800/$40NPV $ millions7861,4112,0362,660IRR %19.428.837.245.0Base-case discounted cash flow calculated at a gold price of US$1,200 per ounce and silver price of US$25 per ounce, with a CDN$/US$ exchange rate of $1.05. Discounted cash flow calculated at a gold price of US$1,792 per ounce and silver price of US$34.60 per ounce, with a CDN$/US$ exchange rate of $1.02. Sensitivities calculated at a CDN$/US$ exchange rate of 1.05. Raymond Threlkeld, Rainy River's President and CEO, stated, "We are very pleased to have completed this important milestone in the development of the Rainy River Gold Project, which is located in a mining-friendly jurisdiction with locally available infrastructure. The study is a snapshot in time, based on data from early 2011, and shows that the project has the potential to become a significant gold producer with cash costs in line with our peer group. The first four years of mining contemplated in the study are stellar, with average cash costs of US$417 per ounce, generating over $800 million in free cash flow. At current prices, the free cash flow in the first four years would be over $1.6 billion. With the results of drilling we have seen in 2011 and the addition of this data to an updated mineral resource and PEA, we expect the project to get even better as we move toward the Feasibility Study stage. At current gold prices, RRGP has a pre-tax NPV of $2.5 billion and IRR of 42.5%."Rainy River has made significant progress in a year, defining the deposit and making several new discoveries in 2011, including the Western Area, 17 Zone Eastern Extension and the Pinewood South nickel-copper-PGM massive sulphide horizon. Our aggressive exploration program has been a success to-date, and continues with 12 drill rigs and a planned resource estimate update in early 2012." AREAS OF UPSIDE POTENTIAL FOR PROJECT METRICS Potential impact of mineral resource update: PEA based on Feb 27, 2011 resource cut-off date from the 2011 drill program. The next mineral resource update in Q1/2012 anticipates the inclusion of all of the 170,000 metres drilled in calendar 2011. The Q1/2012 mineral resource update will include new resources from the Western Area, 17 Zone Eastern Extension and ODM depth extensions. Ongoing infill drilling has the potential to convert waste material to mineralized material and to improve mined grade, as has been observed with infill drilling done to date. Potential to improve metallurgical recoveries through process optimization. Underground design optimization. RAINY RIVER GOLD PROJECT - PRELIMINARY ECONOMIC ASSESSMENT ContributorsThe independent PEA was prepared through the collaboration of a number of industry-recognized consulting firms, including BBA Inc. ("BBA", Montreal, QC), Golder Associates ("Golder", Vancouver, BC), AMEC Environmental & Infrastructure ("AMEC", Mississauga, ON) and SRK Consulting (Canada) Inc. ("SRK", Toronto, ON). These firms provided resource estimates, design parameters and cost estimates for mine operations, process facilities, major equipment, waste storage, reclamation, permitting and operating and capital expenditures. A summary of contributors to the PEA is included in Table 2 below.Table 2 - PEA ContributorsResponsibility AreaContributorGeologyRainy River ResourcesResource EstimateSRKMine PlanningBBA, GolderGeotechnical, Tailings, HydrogeologyAMECFlow sheet and Plant DesignBBAStorageAMECInfrastructure, Power SupplyBBAEnvironmental Baseline and PermittingAMECFinancial ModelingBBAMineral ResourcesThe study assumes both open pit and underground mining methods would be used for resource extraction. Table 3 summarizes the June 29, 2011 mineral resource estimate, which forms the basis of the PEA.Table 3. Mineral Resources Statement at June 29, 2011AreaTonnesGradeGradeAuAg(millions)Au g/tAg g/touncesounces(millions)(millions)Open pit (M&I)115.591.112.414.1178.940Open pit (Inferred, in-pit)16.600.942.630.5041.406Open pit (Inferred, out-of-pit)57.210.752.821.3805.184Underground (M&I)1.884.823.080.2910.185Underground (Inferred)3.633.823.840.4450.448TOTAL M&I117.461.162.424.4079.125TOTAL Inferred77.440.942.832.3307.038Mineral 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.Open pit mineral resources are reported at a cut-off grade of 0.35 g/t gold; underground mineral resources are reported at a cut-off grade of 2.5 g/t gold. Optimized cut-off grades are based on a gold price of US$1,100 per ounce, a silver price of $22.50 per ounce and a foreign exchange rate of 1.10 Canadian dollars to 1.0 US dollar. Metallurgical recoveries include gold recovery of 88% for open pit resources and 90% for underground resources, with silver recovery at 75%.The mineral resource statement was prepared by Dorota El-Rassi, P.Eng. (APEO #100012348) and Glen Cole, P.Geo (APGO #1416), of SRK Consulting (Canada) Inc., both "independent qualified persons" as that term is defined in National Instrument 43-101.The above table summarizes mineral resources and excludes the impact of mining dilution, which is the incidence of waste rock extracted together with mineralized material.For the PEA, open pit mining dilution is calculated as 14% at 0.15 g/t gold and 0.78 g/t silver. Underground mining dilution is calculated as 10% at 0.32 g/t gold and 0.81 g/t silver. Open pit resources have been calculated assuming a material loss of 4%. Underground resources have been calculated assuming a material loss of 5%. With an open pit cut-off grade of 0.30 g/t, and an underground cut-off grade of 2.0 g/t, the resulting tonnages and grades for the open pit and underground mine plans are shown in Table 4:Table 4. In-Pit and Underground Mineral Resources in PEA (diluted)AreaTonnesGradeGradeAu MozAg Moz(M)Au g/tAg g/tContainedContainedOpen pit (M&I)125.790.921.893.7157.635Open pit (Inferred)17.950.772.100.4461.211Underground (M&I)3.293.796.040.4020.639Underground (Inferred) M&I129.090.991.994.1178.274TOTAL Inferred21.021.132.570.7651.738In-pit and underground Mineral Resources are exclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. In-pit Resources have been estimated using a cut-off grade of 0.30 g/t and Underground Resources have been estimated using a cut-off grade of 2.0 g/t.In-pit Resources have been estimated using a dilution of 14% at 0.15 g/t Au and 0.78 g/t Ag and Underground Resources have been estimated using a dilution of 10% at 0.32 g/t Au and 0.81 g/t silver.In-pit Resources have been estimated using a mine recovery of 96% and Underground Resources have been estimated using a mine recovery of 95%.MiningThe PEA assumes the processing of an average 31,340 tpd of material from a combination of open pit and underground operations.The open pit mine plan is split into two phases: Phase 1 focuses on a higher grade 'starter pit' from Year 1 to Year 4, mined to a depth of 275 metres, while Phase 2 comprises the 'final pit' from Year 5 to Year 14, mined to a depth of 500 metres. The RRGP open pit is designed as a conventional surface mining operation producing mill feed at a rate of 30,000 tonnes per day. The primary equipment fleet will consist mainly of three 35 m3 wire rope shovels, one 25 m3 hydraulic excavator, one 30 m3 wheel loader, and 225 tonne-class haul trucks and a fleet of support equipment. Production drilling will be carried out by diesel-powered track-mounted units. Operating bench heights of 10 metres have been assumed for mining operations. Over the life of the mine, a total of 586 million tonnes of waste rock and 91 million tonnes of overburden material will be moved. During the pre-production period, 24 million tonnes of overburden and 9.8 million tonnes of waste rock will be removed as part of development work, with overburden stripping completed within the first 6 years. Waste rock-to-mill feed operating strip ratios average 2.9 during the first four years of operations, and average 3.3 over the life-of-mine. One hundred and thirteen million tonnes of waste rock are accounted for in sustaining capital ($195 million). Mined waste rock and overburden material would be stored in nearby stockpiles or used in dyke construction activities associate with tailings impoundments.Underground mining will be conducted with an overhand cut-and-fill method with 5 metre high lifts, designed to deliver 2,000 tonnes per day of feed to the processing plant. Underground workings will be developed from a primary 5-by-5 metre ramp access and, over time, from the open pit, as the pit deepens. A fleet of 6 m3 scooptrams and 50-tonne trucks will load and haul the material to surface. Development of the underground mine would start in Year 1 of open pit mine operations, commence small scale production by Year 3 and begin producing at full rates by Year 5.Both mine areas would deliver material to a central gyratory crusher for primary reduction and delivery to the processing plant.Metallurgy and ProcessingMetallurgical testing has been conducted over the last two years at SGS Canada Inc. in Lakefield, Ontario. Based on the results, BBA developed a conventional flow sheet including:primary crushing and grinding; flotation; re-grinding of the flotation concentrate; and cyanidation to produce gold doré. Major equipment for the processing facility includes a gyratory crusher sized for 35,000 tpd, a semi-autogenous ("SAG") mill and a ball mill. Mill feed would be ground to a P80 size of 150 microns before entering a flotation circuit. Flotation concentrate would be re-ground to P80 10-15 microns using ultra-fine grinding mills, before entering a carbon-in-pulp ("CIP") leaching circuit for final metal recovery.Metallurgical recoveries for gold and silver are expected to average 88.5% and 65.0% respectively. The current flow sheet does not include a gravity circuit as more testing is required to determine if this step is warranted. Two tailings ponds are envisioned for both flotation and concentrate tailings products.InfrastructureThe RRGP benefits from world-class infrastructure, services and labour in the immediate area. The project site is located only 65 km from the town of Fort Frances (population 8,000) and is accessible year-round by a network of sealed provincial highways.Infrastructure is anticipated to include:An access road, gate house and weigh station; Maintenance garage, warehouse and administration complex; Fuel storage facilities; Sewage treatment; Fresh water supply and fire protection; Two tailings ponds; Construction camp for the project development phase. A camp is not anticipated during operations. Power to the project supplied by a new 20 km long 230-kV transmission line connecting to the provincial grid, with total power draw expected to be 61.0 MW at peak production. Operating and Capital CostsTotal operating costs for the RRGP are summarized in Table 5 as follows: Table 5 - Average Life of Mine Operating Costs (in Canadian dollars)Cost StructureUnitCosts per UnitOpen pit mining (mineralized and waste rock)C$ / t mined$1.89Open pit mining (overburden material)C$ / t$1.13Underground mining (cut & fill)C$ / t mined$60.00ProcessingC$ / t milled$6.23General & AdministrativeC$ / t milled$1.00Refining expensesC$ / oz gold$1.50The breakdown of open pit and underground pre-production and sustaining capital costs is supplied in Table 6 and 7, respectively.Open pit pre-production capital costs include overburden stripping, which is necessary to expose the material to be mined, as well as waste stripping. Open pit sustaining capital costs include the construction of a tailings dam and certain waste rock removal.Table 6 – Open Pit Capital CostsOpen Pit Pre-Production CapitalC$MOverburden Stripping28.1Waste Stripping15.8Mine Infrastructure31.1Process Plant271.7Tailings and Water Management14.4Equipment21.1Site Infrastructure65.9Indirect Costs130.2Contingency102.5Total680.8Open Pit Sustaining CapitalC$MEquipment Lease247.4Waste Stripping Costs195.4Overburden Stripping Costs75.3Tailings Dam Construction68.3Other11.9Total598.4Table 7 – Underground Capital CostsUnderground Pre-Production CapitalC$MHorizontal Development33.1Vertical Development1.4Mining Equipment and Infrastructure32.2Total66.7Underground Sustaining CapitalC$MHorizontal Development89.2Vertical Development11.5Equipment and Infrastructure9.0Total109.7EnvironmentThe environmental baseline assessment was initiated in 2008 and was followed by extensive annual regional field assessments.AMEC's environmental study to-date suggests that 'no fatal flaws' are indicated for the RRGP.CommunityThe Company is an active member of the community with local offices situated both near the project site in the town of Emo, as well as in Thunder Bay. Regular public information meetings combined with site tours are some of the ways the Company has continued to engage and inform the local population as to the project's progress. In support of Aboriginal engagement, the Company signed a Memorandum of Understanding ("MOU") with the Fort Frances Chiefs Secretariat First Nations in May 2010, and has held discussions with the First Nations over the course of 2011, developing a Participation Agreement which is projected to be formally signed in Q1-2012.The peak construction workforce will total 675 during the 20-month construction period. Employment levels at the RRGP during operations will vary according to production requirements but will average 618 including 153 salaried staff and 465 hourly employees.Project EconomicsLife-of-mine cash costs, net of silver credits, are calculated to be US$553 per ounce of gold. This average places the project within the second quartile of global gold projects, based on published industry cost curves. In the first four years of production, cash costs are US$417 per ounce of gold, net of silver credits, placing the RRGP within the first quartile of global gold projects.Production volumes and cash costs are shown in Tables 8 and 9 below.Table 8 – Gold and Silver Production Profiles: Open Pit and UndergroundOPEN PITYearTonnes Milled (000s)Average Au grade (g/t)Average Ag grade (g/t)Au Production (ounces)Ag Production (ounces)110,950,0000.931.66291,227380,356210,950,0001.071.85333,120423,021310,950,0001.131.54352,227352,531410,950,0001.031.52320,712346,770510,950,0000.722.34224,639534,501610,950,0000.642.39198,103547,337710,950,0000.601.99186,492456,516810,950,0000.712.13220,241487,043910,950,0000.852.38263,954544,9251010,950,0000.772.27239,630520,2031110,950,0000.931.61288,450367,7771210,950,0000.971.62302,253370,0331310,950,0001.341.63416,821373,413141,515,2911.211.5452,16048,885TOTAL/AVERAGE143,865,2910.901.913,690,0285,753,311UNDERGROUNDYearTonnes Milled (000s)Average Au grade (g/t)Average Ag grade (g/t)Au Production (ounces)Ag Production (ounces)100.000.0000200.000.00003100,0003.292.329,3574,8554450,0003.292.3242,10821,8465730,0003.292.3268,30835,4396730,0003.292.3268,30835,4397730,0003.292.3268,30835,4398730,0003.0812.5264,016191,0089730,0003.859.7979,978149,31410730,0003.859.7979,978149,31411730,0003.687.4776,354113,95212704,2364.061.4681,25721,5481300.000.00001400.000.0000TOTAL/AVERAGE6,364,2363.525.70637,972758,152Table 9 – Combined Open Pit and Underground Production, Cash CostsCombined Open Pit and UndergroundYearAu Production(ounces)Ag Production(ounces)Cash Costs(US$/oz gold)1291,227380,356$4352333,120423,021$4013361,585357,386$3894362,820368,615$4475292,947569,940$6436266,411582,775$7027254,800491,955$7278284,258678,051$7349343,931694,239$61010319,608669,517$71611364,804481,729$61812383,510391,581$58913416,821373,413$3711452,16048,885$334TOTAL/AVERAGE4,328,0006,511,463$553The PEA base-case scenario suggests a 19.4% IRR and an NPV of $786 M, at a 5% discount rate on a pre-tax basis. Parameters are provided in Table 10 below, with sensitivities in Table 11. Additional assumptions applied in developing the project economics for this PEA include capital costs commencing upon initiation of construction.Table 10 - Economic Parameters and Summary of PEA ResultsEconomic ParameterUnitsPEA Base Case AssumptionsMetal price – AuUS$ / oz$1200.00Metal price – AgUS$ / oz$25.00Currency exchange rateC$ / US$$1.05Discount Rate for NPV%5%Development Capital – Open Pit$ millions$681Contingency included$ millions$103Sustaining Capital – Open Pit$ millions$598Development Capital - Underground$ millions$67Sustaining Capital - Underground$ millions$110LOM cash cost / oz Au1US$ /oz Au$553Net Present Value, pre-tax$ millions, 5% discount$786Internal Rate of Return%19.4Payback periodYears3.41. Including royalties and net of silver credits.All scenarios in the Preliminary Economic Assessment are preliminary in nature and include both Indicated and Inferred Mineral Resources. Inferred Mineral Resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the Preliminary Economic Assessment will be realized.Table 11 – Sensitivities to Metal Prices1Gold, Silver, US$/ozBase Case$1200 / $25$1400 / $30$1600 / $35$1800 / $40NPV 5%, $ millions7861,4112,0362,660IRR %19.428.837.245.01. Assumes constant exchange rate of 1.05 C$/US$.Opportunities and RisksOpportunities to improve RRGP project economics include the following:The PEA is based on the Feb. 27, 2011 mineral resource cut-off date and only included 17,100 metres drilled from the 2011 drill program. The next resource update is planned for Q1/2012 and is expected to include all of the 170,000 metres projected to be drilled in calendar 2011. New data will be incorporated into the upcoming feasibility study. At gold grade cut-offs between 0.20 - 0.30 g/t, a total of 49.1 million tonnes of open-pit mineralized material in the Measured & Indicated mineral resource categories, grading 0.24 g/t gold and 1.34 g/t silver, could be stockpiled and processed at the end of the mine life, thereby improving project NPV, subject to prevailing metal prices. Ongoing infill drilling has the potential to convert waste material to mineralized material and to improve mined grade, as has been observed with infill drilling done to date. Conversion of Inferred Resource ounces to Measured and Indicated Resources ounces. There exists a potential to improve metallurgical recoveries through process optimization. Geotechnical work suggests the possibility exists to decrease pit wall angles and thereby decrease waste stripping levels and life-of-mine operating costs. Underground design optimization. Risks requiring mitigation strategies include:Management of construction/engineering and procurement costs, and cost containment. Operating risks related to recruitment and training of open-pit and underground workforces. Currency risk relating to equipment purchases denominated in U.S. currency. Next StepsTechnical:Updated NI 43-101 resource estimate; Update of PEA based on new resource; Continue all technical programs (metallurgical testing, geotechnical, baseline); Initiate Feasibility Study. ExplorationAdd ounces at the RRGP through infill and down-plunge drilling; Continue aggressive exploration of district targets; Sterilization drilling of selected infrastructure sites. Community and Environment:Complete Participation Agreement with the Fort Frances Chiefs Secretariat; Ongoing community engagement programs to continue; Prepare project description for submission to regulatory authorities. The full NI 43-101 Technical Report for the PEA will be filed on SEDAR within 45 days, and will be posted to Rainy River Resources' website at www.rainyriverresources.comat that time.Rainy River will hold a conference call on Thursday November 10, 2011 at 10 a.m. Eastern Standard Time. During the call, senior management will be available to discuss the study and respond to questions from analysts and investors. To join the call, please dial:1-866-782-8903 in Toronto Local / International 647-426-1845 in North America toll-free The conference call will be recorded and available until Nov 20, 2011. Playback details are as follows:1-866-245-6755 in Toronto Local / International 416-915-1035 in North America toll-free Passcode: 665241 Independent Qualified Persons ("QPs")QPs from BBA, Golder, AMEC and SRK who have prepared or supervised the preparation of the technical information relating to the Preliminary Economic Assessment include:David Runnels, Colin Hardie (BBA) Donald Tolfree (Golder) David Ritchie, Sheila Daniel (AMEC) Glen Cole, Dorota El-Rassi (SRK) The mineral resource statement was prepared by Dorota 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.Forward-Looking StatementsThis press release contains "forward-looking information" as defined in applicable securities laws (referred to herein as "forward-looking statements"). Forward looking statements include, but are not limited to, statements with respect to the cost and timing of the development of the Rainy River project, including the exercise of the economic parameters of the project; the success and continuation of exploration activities; estimates of mineral resources; acquisitions of additional mineral properties; the future price of gold; government regulations and permitting timelines; estimates of reclamation obligations that may be assumed in connection with the exercise of the economic parameters of the project; requirements for additional capital; environmental risks; and general business and economic conditions. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "suggests", "continues", "forecasts", "projects", "predicts", "intends", "anticipates" or "believes", or variations of, or the negatives of, such words and phrases, or statements that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Inherent in forward-looking statements are risks, uncertainties and other factors beyond the Company's ability to predict or control. These risks, uncertainties and other factors include, but are not limited to, the assumptions underlying the Preliminary Economic Assessment not being realized, future gold prices, changes in cost of labour, supplies, fuel and equipment, changes in equity markets, actual results of current exploration, changes in project parameters, exchange rate fluctuations, title risks, regulatory risks and uncertainties with respect to obtaining necessary surface rights and permits or delays in obtaining same, and other risks involved in the gold exploration and development industry, as well as those risk factors discussed in the section entitled "Description of Business-Risk Factors" in Rainy River's 2011 Annual Information Form. Forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, the availability of financing for the Company's exploration and development activities; the timelines for the Company's exploration and development activities on the Rainy River Property; the availability of certain consumables and services; assumptions made in mineral resource estimates, including geological interpretation grade, recovery rates, and operational costs; and general business and economic conditions. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. All forward-looking statements herein are qualified by this cautionary statement. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements whether as a result of new information or future events or otherwise, except as may be required by law.This new release uses the terms "measured resources", "indicated resources" and "inferred resources". The Company advises readers that although these terms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI43-101")), the United States Securities and Exchange Commission does not recognize them. Readers are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted in to reserves. In addition, "inferred resources" have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, or economic studies, except for a Preliminary Assessment as defined under NI43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.Non-GAAP MeasuresCash cost per ounce is a non-GAAP measure and has no standardized meaning under Canadian GAAP or IFRS.About Rainy RiverRainy River is a Canadian precious metals exploration company whose key asset is the Rainy River Gold Project. With over $105 million in cash and securities, 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 centred in Richardson Township. The Company's property is very 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 & CEOFOR FURTHER INFORMATION PLEASE CONTACT: Indi GopinathanRainy River Resources Ltd.Director of Investor