Rainy River Resources Announces Updated Mineral Resource Statement
TORONTO, ONTARIO -- (Marketwire) -- 06/29/11 -- Rainy River Resources Ltd., ('Rainy River' or the 'Company' (TSX VENTURE: RR) 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. The reported resources were calculated at the same elevation and the same cut-off grades as those reported in the February 2011 resource estimate.
Highlights
-- Measured & Indicated resources of 4.4 million oz gold, 9.1 million oz
silver
-- Inferred resources of 2.3 million oz gold, 7.0 million oz silver
-- Open pit Measured & Indicated resources increase 28% for contained gold
and 38% for contained silver ounces
-- Underground Measured & Indicated resources increase 41% for gold and 43%
for silver
-- Increase in Measured & Indicated resources driven by a 25% increase in
tonnage and increases in grade of 3% and 10% in gold and silver,
respectively
Table 1. Consolidated Mineral Resource Statement(i), Rainy River Gold Project
SRK Consulting (Canada) Inc., June 29, 2011.
In pit resources(ii) (above 450 m elevation)
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Tonnes Au Au Ag Ag
('000's) g/t ounces g/t ounces
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Measured 15,660 1.26 635,641 1.93 972,751
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Indicated 99,927 1.08 3,480,907 2.48 7,967,183
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Measured & Indicated 115,587 1.11 4,116,548 2.41 8,939,934
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Inferred 16,602 0.94 503,969 2.63 1,405,954
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Out of pit resources(ii) (above 450 m elevation)
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Tonnes Au Au Ag Ag
('000's) g/t ounces g/t ounces
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Inferred 57,211 0.75 1,380,438 2.82 5,183,770
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Underground resources(ii) (below 450 m elevation)
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Tonnes Au Au Ag Ag
('000's) g/t ounces g/t ounces
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Measured 100 4.74 15,212 2.67 8,568
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Indicated 1,775 4.83 275,596 3.10 176,856
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Measured & Indicated 1,875 4.82 290,808 3.08 185,424
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Inferred 3,628 3.82 445,389 3.84 447,870
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Combined resources: In pit, out of pit, underground(ii)
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Tonnes Au Au Ag Ag
('000's) g/t ounces g/t ounces
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Measured 15,760 1.28 650,853 1.94 981,319
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Indicated 101,702 1.15 3,756,503 2.49 8,144,039
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Measured & Indicated 117,462 1.17 4,407,356 2.42 9,125,358
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Inferred 77,442 0.94 2,329,796 2.83 7,037,595
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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. 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 US dollar. Metallurgical recoveries include gold recovery of 88% for open
pit resources and 90% for underground resources with silver recovery at 75%.
Commentary
'The latest resource update incorporates 49 new holes that were focused on testing new targets like the Western Area and 17 East Extension as well as conducting infill within the open pit', noted Raymond Threlkeld, President and CEO. 'We have successfully added 0.99 million ounces of gold and 2.5 million ounces of silver to the Measured & Indicated classes relative to the February 24, 2011 resource estimate. This represents a 28% increase in gold resources and a 38% increase in silver resources in the M&I category, and includes 17,000 metres (49 drill holes) from our 2011 drill program. The infill program at Rainy River is well underway, with 10 rigs on site and an additional 153,000 metres of drilling planned for the remainder of 2011. The Company will continue with an aggressive program to delineate the RRGP ore body in preparation for a feasibility study commencing later this year. Further infill drilling in the remainder of 2011 is planned to convert and upgrade resources in the pit, following a potential continuation of the trend demonstrated with this incorporation of 49 drill holes. In addition, we will focus on exploration of the 17 Deep and ODM Zones, and on the Western Area.' Mr. Threlkeld also noted, 'The more we drill at Rainy River, the better the quality of resources we find, thus de-risking the project.'
Sensitivity Analysis:
Block model quantities and grade estimates at Rainy River 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 Table 2 and Table 3 below.
Table 2. Block model quantities and grade estimates(i) at various cut off
grades - potential open pit mining material
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Cut off grade Tonnes Au Ag Ag Ag
0.25 g/t Au ('000's) g/t ounces g/t ounces
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Measured 19,835 1.06 675,384 1.77 1,131,018
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Indicated 139,912 0.86 3,854,947 2.22 9,994,182
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Measured & Indicated 159,747 0.88 4,530,331 2.17 11,125,200
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Inferred (in-pit) 22,748 0.78 568,783 2.27 1,663,443
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Inferred (ex-pit) 102,278 0.55 1,802,489 2.23 7,333,199
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Cut off grade Tonnes Au Au Ag Ag
0.30 g/t Au ('000's) g/t ounces g/t ounces
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Measured 17,506 1.16 654,870 1.86 1,048,679
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Indicated 116,797 0.97 3,650,512 2.35 8,837,990
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Measured & Indicated 134,303 1.00 4,305,382 2.29 9,886,669
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Inferred (in-pit) 19,498 0.86 540,212 2.47 1,550,786
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Inferred (ex-pit) 73,864 0.65 1,553,542 2.57 6,100,135
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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 Au Au Ag Ag
3.0 g/t Au ('000's) g/t ounces g/t ounces
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Measured 79 5.26 13,397 2.85 7,264
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Indicated 1,321 5.55 235,679 3.32 141,148
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Measured & Indicated 1,400 5.53 249,076 3.30 148,412
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Inferred 2,458 4.32 341,253 4.55 359,897
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Cut off grade Tonnes Au Au Ag Ag
3.5 g/t Au ('000's) g/t ounces g/t ounces
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Measured 62 5.81 11,637 3.08 6,165
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Indicated 1,007 6.27 202,966 3.56 115,148
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Measured & Indicated 1,069 6.24 214,603 3.53 121,313
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Inferred 1,561 4.94 248,065 5.49 275,362
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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.
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. The estimated gold mineral resource is based on data received up to February 27th, 2011 and includes 885 diamond drill holes totaling 397,069 metres. Since the previous mineral resource estimate (see press release dated February 24th, 2011) the Company has drilled and added 49 new drill holes totaling 17,000 metres to the resource database.
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 occurs 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 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 vertical depth) 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$1,100/oz. Silver price; US$22.50/oz
-- 88% gold recovery, 75% silver recovery
-- Operating costs of $2.00/t mining, $7.25/t processing costs including
G&A
-- Process rate of 20,000 tpd combined open pit and underground feed
-- 48 degree average wall angle
The 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/oz
-- 90% gold recovery, 75% silver recovery
-- Operating costs of $55/t mining, $7.25/t processing costs including G&A
-- Process rate of 20,000 tpd combined open pit and underground feed
Qualified persons
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. 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. 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. Samples with visible gold were automatically analyzed for Ore Grade by 1000g screen fire assay, with coarse and fine fractions being combined proportionately and the fine fraction being assayed twice. Certified 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. implements independent QA/QC protocols that include the insertion of certified blanks and standards as part of their routine analysis.
About Rainy River
Rainy River is a Canadian precious metals exploration company whose key asset is the Rainy River Gold Project. With approximately $120 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 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.
Indi Gopinathan
Director of Investor Relations
416-645-7289
igopinathan@rainyriverresources.com
www.rainyriverresources.com