International Tower Hill ups Livengood again (March 22, 2010)

VANCOUVER — Another 64 holes, another increase to the resource estimate: International Tower Hill Mines (ITH-T) has increased the Livengood gold deposit yet again.

The company’s fifth resource estimate in just over three years has boosted the contained gold ounces at Livengood slightly; more importantly, the 64-hole in-fill drill program that International Tower Hill completed in the fall helped upgrade portions of the project’s inferred resource to the indicated category.

The overall resource at Livengood, calculated using a cutoff grade of 0.3 gram gold per tonne, now stands at 702 million indicated tonnes grading 0.6 gram gold for 13.5 million oz. plus 278 million inferred tonnes averaging 0.56 gram gold for another 5 million oz. The new contained gold count is 18.5 million oz., slightly above the previous estimate of 17.6 million oz.

Within that resource, the Core and Sunshine zones account for most of the deposit’s higher-grade mineralization, contributing 184 million indicated tonnes grading 0.98 gram gold and 56 million inferred tonnes averaging 0.99 gram gold. The high-grade core, defined using a cutoff grade of 0.7 gram gold, forms the basis for starter pit design work.

The deposit at Livengood now covers roughly 3.5 sq. km. The estimate was based on 383 drill holes with an average length of 274 metres. Tower Hill says the geology of the holes around the margins of the drilled area indicates the favourable host stratigraphy and alteration remain open laterally and at depth.

The fall drill program targeted several areas of the Northeast and Sunshine zones that had been insufficiently tested to contribute resources. With those areas now starting to fill in, Tower Hill expects the new resource estimate will have a positive impact on the project’s strip ratio.

Tower Hill is working through a new preliminary economic assessment (PEA) for Livengood, which it expects to complete before mid-year. The initial PEA for the project only considered the site’s oxide mineralization, which makes up roughly half of the defined resource.

In the new PEA, Tower Hill is looking at developing a combined oxide and sulphide operation at Livengood; the open-pit mine would send oxide ore to a heap leach and sulphide rock to a milling-and-flotation facility. Along with the new resource estimate, recent metallurgical test-work is also contributing key data to the PEA study.

Initial tests of conventional milling and gold extraction via gravity separation followed by intensive carbon-in-leach treatment produced gold recoveries averaging 86%. Tower Hill says the results show the use of gravity pre-concentration would “dramatically reduce the volume of material requiring cyanide extraction while increasing the grade of the treated concentrate,” which would reduce both reagent and capital costs. The process is effective because the deposit at Livengood has a high native gold content.

The winter drill program at Livengood is ongoing, with four rigs on site. The company expects to complete 20,000 metres of drilling in the current phase; 21 holes are already complete but no results have been released.

At the beginning of the year, Tower Hill amended its lease agreement with the Alaska Mental Health Land Trust to increase its land package by 25 sq. km. With the increase, Tower Hill now controls leases to 70 sq. km of land at Livengood, which the company says gives it full flexibility for multiple development scenarios.

The project is located 110 km north of Fairbanks, along the paved Elliot Highway. The Alaska state power grid reaches roughly half that distance, bringing hydropower to within 55 km of Livengood, along the proposed Alaska natural gas pipeline route.

AngloGold Ashanti (AU-N,) recently exercised its right to maintain its 13.3% interest in Tower Hill, buying almost 68,000 shares at $5.38 apiece. The major’s interest had been diluted by the exercise of stock options and broker options and the issuance of shares related to the company’s acquisition of Redstar Gold (RGC-V), a purchase related to its North Bullfrog project.

On news of the latest resource update, Tower Hill’s share price fell 25¢ to close at $6.28.

The company has a 52-week trading range of $2.51-$8.35 and 60 million shares outstanding.