Riverstone releases first Nami results (May 31, 2010)

VANCOUVER —Riverstone Resources (RVS-V) had already defined four gold deposits at its Karma project in Burkina Faso and was starting to move those ounces towards production when local artisanal miners discovered a new high-grade zone within the property boundaries.

Within months of the discovery some 6,000 to 7,000 miners had arrived at Nami, as the prospect came to be known, and were driving shafts in pursuit of gold-endowed quartz veins.

“It became clear this was a discovery of some importance,” says Michael McInnis president and CEO of Riverstone. “So we asked a crew to go in and sample the shafts.”

The 51 initial samples returned some spectacular results, enough to warrant a more systematic sampling effort. Riverstone’s team returned to Nami and took panel samples from 200 shafts at set depths. Results included nine samples grading better than 10 grams gold per tonne and 41 samples carrying more than 1 gram gold.

Investors are certainly excited about the Nami discovery –since the first set of sampling results came out in mid-January, when Riverstone shares were trading for 25¢, the company’s share price has climbed as high as $1.

Now the first drill results from the new prospect have defined a mineralized footprint of 450 metres by 200 metres, still open along strike to the north and south, down dip to the west and at depth. Of the 30 holes drilled, 26 returned significant gold mineralization.

Hole 56, collared northwest of the centre of the zone, returned the best intercept: 24 metres grading 5.0 grams gold, starting 66 metres downhole and including 12 metres of 9.45 grams gold. The hole also cut a lower-grade interval above the high-grade hit, returning 24 metres grading 0.37 gram gold from 34 metres downhole.

Collared 150 metres southeast, hole 45 hit 12 metres grading 2.31 grams gold at 18 metres depth, including 2 metres of 9.54 grams gold. Hole 46, drilled another 100 metres to the southeast, returned 34 metres grading 1.17 grams gold starting 28 metres downhole. And hole 49, collared 75 metres to the southwest, returned 12 metres carrying 4.67 grams gold, starting 34 metres downhole and including 6 metres of 7.73 grams gold.

Other intercepts included 20 metres of 0.98 gram gold, 4 metres of 8.07 grams gold, and 64 metres of 0.45 gram gold.

Gold at Nami is hosted in quartz veins that occur both within a breccia body and in fractured granodiorite. From these initial results the breccia appears to be getting thicker to the north; moving down dip to the west the zone appears to be increasing in both thickness and grade.

Riverstone completed 30 reverse circulation (RC) drill holes at Nami before moving the rig to the Rambo deposit. The rig will return, after completing infill and step-out holes at Rambo and Goulagou, but Riverstone is also bringing a diamond drill rig to Nami.

The company is concerned poor recoveries may be understating the gold grades by losing material from mineralized intercepts. This concern is backed by the fact that sample recoveries, which averaged only 50%, were worse in well-mineralized intercepts and better in lower-grade areas.

It is also possible that gold grades are underreporting because of the artisanal mine workings. Eight of the 30 holes at Nami encountered at least one underground working, where the mineralized material had been removed.

Not only will diamond drilling improve recoveries and eliminate concerns about gold losses, oriented cores will help Riverstone’s geologists to understand the structure of the deposit. A layer of laterite obscures the zone at surface and the rock chips and dust that results from RC drilling do not indicate the angle or direction of the gold-bearing quartz veins.

Riverstone has contracted a diamond rig to drill 2,000 metres but McInnis says the contract is flexible, so if the results indicate good potential in one direction or another the company can continue drilling.

“There are a lot of questions on the table right now,” says McInnis. “One good one is: what are those veins doing? We’re pretty happy with what we saw here in our first go, but we’re certainly looking forward to some more results.”

Riverstone started exploring Burkina Faso in 2003. The Karma project, which is in the north-central region of the country, 100 km northwest of the capital city Ouagadougou, covers 800 sq. km. The four deposits at Karma are known as Rambo, Goulagou 1, Goulagou 2 and Kao. Together, the four zones are home to 820,500 indicated oz. gold as well as 320,300 inferred oz. in shallow oxide deposits.

On news of the Nami results, Riverstone’s share price lost 4¢ to close at 71¢. The company has a 52-week trading range of 15¢-$1.01 and 90.3 million shares outstanding.