An updated resource estimate based on 394 new core holes or 170,000 metres of drilling last year—bringing the total to 1,279 drill holes or 578,261 metres—has boosted in-pit and underground resources for Rainy River Resources (RR-T).
The Rainy River gold project in northwestern Ontario has combined open pit and underground measured and indicated resources of 5.72 million ounces of gold, an increase of 30% over the June 2011 estimate, and 12.01 million ounces of silver, an increase of 32%, driven by a 28% increase in tonnage. Inferred resources measure 2.25 million ounces of gold and 6.77 million ounces of silver.
Open pit measured and indicated resources at a 0.35 gram gold per tonne cut-off grade stand at 136 million tonnes grading 1.12 grams gold per tonne and for 4.92 million ounces of contained gold and 2.33 grams silver per tonne for 10.16 million ounces of contained silver. Inferred resources add 22.7 million tonnes grading 0.93 gram gold per tonne for 675,000 ounces of gold and 2.18 grams silver per tonne for 1.59 million ounces of silver.
The underground portion of the gold project has expanded to 3.45 million tonnes grading 4.53 grams gold for 501,000 ounces of contained gold in the measured and indicated category, and 5.48 grams silver for 607,000 ounces of silver. Inferred resources add 1.38 million tonnes of 4.14 grams gold for 183,000 ounces of gold and 7.03 grams silver for 311,000 ounces of silver. The underground resource was based on a cut-off grade of 2.5 grams gold per tonne.
This year the company will drill about 150,000 metres with twelve diamond drill rigs. Drilling will complete the remaining infill program in the open pit and underground areas, condemnation drilling for site facilities and regional exploration along a prospective 6-km-trend.
Rainy River forecasts the next resource update will be ready by the middle of this year, ahead of the start of its feasibility study. The new resource estimate will include drill information from the first few months of 2012.
Gold 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 about 300 degrees and dips 50 to 70 degrees 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 south.
The advanced stage project hosts three types of sulphide mineralization: gold-rich polymetallic sulphides, subordinate silver-rich polymetallic sulphides and copper-nickel platinum group element sulphides.
Rainy River acquired 100% of the project from Nuinsco Resources (NWI-T) in 2005. The property is about 65 km northwest of Fort Frances, 162 km south of Kenora and about 418 km west of Thunder Bay. It has year-round road access, the railway is 12 km to the south, and there are power lines in close proximity.
The company has about $100 million in its treasury.
Rainy River shares closed at $7.78 apiece, up 14¢ or 1.8%. Over the last year the junior has traded in a range of $5.66 per share and $13.10 per share and has about 84 million shares outstanding.
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