Press release from PR Newswire
Rainy River Resources Announces 6.2 Million Ounces of Gold in Measured and Indicated Resources, and 2.3 Million Ounces of Gold in Inferred Resources
Wednesday, October 10, 2012
Rainy River Resources Announces 6.2 Million Ounces of Gold in Measured and Indicated Resources, and 2.3 Million Ounces of Gold in Inferred Resources06:00 EDT Wednesday, October 10, 2012TORONTO, October 10, 2012 /PRNewswire/ --Rainy River Resources Ltd. ("Rainy River" or the "Company" (RR.TSX)) 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. The consolidated mineral resource statement for the RRGP is tabulated in Table 1. Resources are reported at an elevation of approximately 500 metres below surface, and the same cut-off grades as those reported in the February 2012 mineral resource statement. NB - All comparisons have been referenced to the filed Technical Report for the February 2012 Resource Statement.HIGHLIGHTSMeasured and Indicated mineral resources expand to 6.2 million ounces of gold, 13.3 million ounces of silver.Measured and Indicated mineral resources increase by 9% for contained gold and 12% for contained silver ounces, driven by a 5% increase in tonnage and grade increases of 3% and 6% for gold and silver, respectively.Inferred mineral resources total 2.3 million ounces of gold, 7.0 million ounces of silver, continuing to provide a basis for future feed.257,000 ounces of gold and 565,000 ounces of silver were added within the conceptualized open pit outline in the Measured and Indicated categoriesAdditionally, Indicated silver in the Silver Zone increased by 89%, to 1.2 million ounces, further increasing ounces within the pit.Table 1. Consolidated Mineral Resource Statement*, Rainy River Gold Project, SRK Consulting, October 10, 2012In pit resources** Tonnes Au Au Ag Ag ('000's) g/t ('000's) oz g/t ('000's) oz Measured 27,550 1.32 1,168 1.90 1,681 Indicated 112,271 1.11 4,012 2.51 9,048 Measured and Indicated 139,821 1.15 5,180 2.39 10,728 Inferred 19,353 0.88 550 1.40 870 Out of pit resources** Tonnes Au Au Ag Ag ('000's) g/t ('000's) oz g/t ('000's) oz Indicated 14,466 0.80 373 3.84 1,785 Inferred 73,555 0.68 1,610 2.53 5,980 Underground resources** Tonnes Au Au Ag Ag ('000's) g/t ('000's) oz g/t ('000's) oz Measured 88 4.97 14 2.76 8 Indicated 4,148 4.50 600 6.12 816 Measured and Indicated 4,236 4.50 614 6.05 824 Inferred 897 4.18 120 4.63 134 Combined Resources: In pit, Out of Pit and Underground** Tonnes Au Au Ag Ag ('000's) g/t ('000's) oz g/t ('000's) oz Measured 27,638 1.33 1,182 1.90 1,689 Indicated 130,885 1.18 4,985 2.77 11,649 Measured and Indicated 158,523 1.21 6,167 2.62 13,338 Inferred 93,805 0.75 2,280 2.32 6,984 *Mineral resources are reported relative to conceptual pit shells. On average, the open pit extends to an elevation of 500 metres below surface. 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. Figures may not add due to rounding. 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 based on a gold price of US$1,100 per ounce, a silver price of US$22.50 per ounce, a foreign exchange rate of 1.10 Canadian dollars to 1.0 US dollar. Metallurgical recoveries include 88% for gold in the open pit resources and 90% for gold in the underground resources, with a silver recovery of 75%.Table 2. Comparison between the February 2012 and October 2012 Mineral Resource Statement Percentage change Tonnes from February 2012 Au grade Au ounces Ag grade Ag ounces Measured 19% 2% 21% -5% 13% Indicated 3% 4% 6% 9% 12% Measured and Indicated 5% 3% 9% 6% 12% Inferred 6% -3% 3% -1% 5% Table 3. Mineral Resources* for the Silver Zone, Rainy River Gold Project, SRK Consulting (Canada) Inc., October 10, 2012In Pit** Tonnes (000's) Grade Metal Au Ag AuEq Au Ag AuEq g/t g/t g/t (000's) oz (000's) oz (000's) oz Indicated 1,534 0.41 25.03 0.85 20 1,235 42 *Excluded from Main Mineral Resource Statement. Mineral resources are reported in relation to conceptual pit shells. 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 composites have been capped where appropriate. **Open pit mineral resources are reported at a cut-off grade of 0.35 gpt gold equivalent. Gold equivalent grade is based on a gold price of U$1,100 per ounce, a silver price of U$22.50 per ounce, a foreign exchange rate of C$1.10 to U$1.00 and metallurgical recoveries of 88% for gold and 75% for silver.COMMENTARYRaymond Threlkeld, President and CEO of Rainy River Resources Ltd., commented: "We are very pleased to announce our latest resource update, which continues to reflect both the quality of the Rainy River Gold Project and its potential to grow. The new mineral resource statement incorporates 145 new core holes (79,238 metres) in 2012, for a total resource base of 1,424 diamond drill holes (657,500 metres).""Combined open pit and underground mineral resources in the Measured and Indicated ("M&I") categories total 6.2 million ounces of gold and 13.3 million ounces of silver, while combined Inferred resources total 2.3 million ounces of gold and 7.0 million ounces of silver. Relative to the February 2012 mineral resource statement, M&I mineral resources increased by 504,000 ounces of gold and 1.4 million ounces of silver, representing increases of 9% and 12%, respectively. Inferred mineral resources continue to provide a basis for future exploration targets and conversion to higher confidence ounces.""The aim of the 2012 drill program was to convert as much of the inferred mineral resources within the conceptual pit shell into the Measured or Indicated classifications. Not only have we seen an excellent conversion of ounces within the pit, but we have also found new ounces, showing a conversion of waste to mineralized material within the resource pit. With more refined drilling, we have seen an increase in grade as well: open pit M&I resources now measure 140 million tonnes at 1.15 g/t gold and 2.39 g/t silver, for 5.2 million gold ounces and 10.7 million silver ounces reported. In addition, Indicated silver resources in the Silver Zone, hosted within the open pit, have increased by 89%, to 1.2 million ounces.""The underground portion of the Rainy River Gold Project has now expanded to 614,000 ounces of gold and 824,000 ounces of silver in the Measured and Indicated categories, for increases of 39% and 64% respectively compared to February 2012 estimate, and this resource remains open at depth.""We are also pleased to have a continued strong source of future feed, with 2.3 million ounces of gold, 7.0 million ounces of silver in the Inferred category."This new resource estimate will serve as the resource base case for the upcoming Feasibility Study, to be released in 1H 2013. We anticipate that additional ounces in the Measured and Indicated categories will be incorporated in the already robust ten-year mine plan presented in the August 2012 PEA.""Currently, 3 diamond drill rigs are active at the Rainy River Gold Project. The drills on site are focused on regional exploration along a prospective 6 km-long trend."Sensitivity Analysis:Block model quantities and grade estimates at the Rainy River Gold Project are sensitive to the selection of cut-off grades. The sensitivity of block model quantities for open pit and underground material to gold cut-off grades is presented in Tables 4 and 5, below.Table 4. Block Model Quantities and Grade Estimates* at Selected Cut-off Grades - Potential Open Pit Mining Material Cut off grade Tonnes Au Au Ag Ag 0.30 g/t Au ('000's) g/t ('000's) oz g/t ('000's) oz Measured 30,333 1.23 1,197 1.84 1,795 Indicated (in pit) 131,702 1.00 4,214 2.40 10,150 Indicated (ex. pit) 18,276 0.70 413 3.56 2,093 Measured & Indicated 180,311 1.01 5,824 2.42 14,038 Inferred (in-pit) 23,799 0.78 596 1.32 1,007 Inferred (ex-pit) 97,406 0.59 1,857 2.28 7,154 Cut off grade Tonnes Au Au Ag Ag 0.40 g/t Au ('000's) g/t ('000's) oz g/t ('000's) oz Measured 25,189 1.41 1,140 1.95 1,579 Indicated (in pit) 97,431 1.22 3,834 2.61 8,161 Indicated (ex. pit) 11,628 0.91 339 4.10 1,534 Measured & Indicated 134,248 1.23 5,313 2.62 11,274 Inferred (in-pit) 16,265 0.98 513 1.48 774 Inferred (ex-pit) 55,103 0.78 1,387 2.87 5,081 *The reader is cautioned that the data presented in this table should not be misconstrued as a mineral resource statement. The figures are only shown to illustrate the sensitivities of the block model quantities and grade estimates to the selection of cut-off grade.Table 5. Block Model Quantities and Grade Estimates* at Selected Cut-off Grades - Potential Underground Mining Material Cut off grade Tonnes Au Au Ag Ag 2.0 g/t Au ('000's) g/t ('000's) oz g/t ('000's) oz Measured 113 4.37 16 2.67 10 Indicated 6,773 3.67 800 5.37 1,169 Measured and Indicated 6,886 3.69 816 5.33 1,179 Inferred 1,417 3.47 158 4.13 188 Cut off grade Tonnes Au Au Ag Ag 3.0 g/t Au ('000's) g/t ('000's) oz g/t ('000's) oz Measured 69 5.58 12 2.96 7 Indicated 3,067 5.21 513 6.82 672 Measured and Indicated 3,136 5.22 526 6.73 679 Inferred 639 4.77 98 4.97 102 *The reader is cautioned that the data presented in this table should not be misconstrued as a mineral resource statement. The figures are only shown to illustrate the sensitivities of the block model quantities and grade estimates to the selection of cut-off grade.Technical DescriptionGold mineralization at the Rainy River Gold Project has a volcanogenic origin associated with minor amounts of copper, lead, zinc and silver. Sulphide zones are generally sub-parallel to foliation, which strikes at approximately 300° and dips 50° to 70° to the south. These zones contain low grade gold mineralization. Higher grade gold mineralization is associated with shear zones that trend 20-30 degrees to the main foliation and plunge steeply to the southwest. The gold mineral resources are based on drilling data received up to June 10, 2012 and include 1,424 drill holes (657,500 metres). Since the previous mineral resource estimate (see press release dated February 24, 2012), the Company has drilled and added 145 new core boreholes (79,238 metres) to the resource database. The Rainy River Gold Project hosts three types of sulphide mineralization: gold-rich polymetallic sulphide mineralization, subordinate silver-rich polymetallic sulphides and copper-nickel PGE sulphides. Resources attributed to all the gold- and silver-rich zones are reported within this release. Rainy River Resources Ltd. does not deem these resources to represent a material change for Company, therefore, an updated NI 43-101 compliant resource report will not be necessary at this time. All resources however, will be part of a NI 43-101 compliant report that will follow the release of the feasibility study in 2013.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 subdivided 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, Western Area 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 is generally considered search neighbourhoods 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 the 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 assisting with the preparation of the mineral resource statement 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 (approximately 500 m below 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 modelled 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$1,100/oz. Silver price: US$22.50/ozMetallurgical recoveries include 88% for gold in the open pit resources and 90% for gold in the underground resources, with a silver recovery of 75%.Operating costs of C$2.00/t for mining, C$7.25/t for processing, including G&A48 degree average pit wall angleThe block model quantities and grade estimates below pit bottom 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 g/t gold for underground resources include:Gold price: US$1,100/oz. Silver price: US$22.50/oz90% gold recovery, 75% silver recoveryOperating costs of C$55/t for mining, C$7.25/t for processing, including G&AQualified personsRainy River's exploration program in Richardson Township (part of Chapple Township) is being supervised by Kerry Sparkes, P.Geo., Vice-President Exploration, a Qualified Person as defined by National Instrument 43-101. Mr. Sparkes, P.Geo., is also the person responsible for the content of this news release. The Company has a rigorous QA/QC program in place to ensure best practices in sampling and analysis of drill core. All drill core is marked for sampling and then split in half with a diamond saw blade. Samples are placed in sealed bags with security tags. All samples were assayed using a standard fire assay, 30 gram nominal sample weight with an AA finish. Over-limit samples were re-assayed with a gravimetric finish, and then by 1000 g screen fire assay as a check. Samples with visible gold were automatically analyzed for ore grade by 1,000g screen-fire assay, with coarse and fine fractions being combined proportionately and the fine fraction being assayed twice. Standards, blanks and duplicates are inserted every 25 metres. ALS Canada Ltd. performed primary assaying, with duplicates being analyzed at Activation Laboratories Ltd. ALS Canada Ltd. and Activation Laboratories Ltd. implement independent QA/QC protocols that include the insertion of certified blanks and standards as part of their routine analysis. Resource estimation work by SRK was completed by Dorota El-Rassi, P. Eng and Glen Cole, P.Geo, both employees of SRK and "independent qualified persons" as this term is defined in National Instrument 43-101.About Rainy RiverRainy River Resources Ltd. is a Canadian precious metals exploration company whose key asset is the Rainy River Gold Project, a large gold system centred in Richardson Township (part of Chapple Township). As of June 30, 2012, the Company had approximately $81 million in cash and cash equivalents and short-term investments, and remains well funded for its 2012 plans to 1) commence a feasibility level study on the RRGP; 2) continue growing the existing resource through exploration; 3) conduct a condemnation program in areas identified for potential mine facilities; and 4) continue regional exploration. RRGP 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 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 Inc. 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 W. Threlkeld President & CEOCAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTSThis 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 http://www.sedar.com for further information.For further information: Indi Gopinathan Director, Investor Relations Telephone: +1-416-645-7289 E-mail: igopinathan@RainyRiverResources.comSOURCE Rainy River Resources Ltd.