Livengood grows to 6.8 million oz. gold for Tower Hill

Vancouver – International Tower Hill Mines’ (ITH-V) Livengood gold project seems to have it all: a significant gold deposit amenable to bulk tonnage heap leaching with highway access and nearby grid power. Now a new resource estimate has boosted the Livengood gold count by 70% and the company’s shares are trading near an all-time high.

Livengood now boasts an indicated resource of 128.6 million tonnes grading 0.83 gram gold per tonne as well as 142.1 million inferred tonnes averaging 0.74 gram gold for 6.8 million oz. gold. Those numbers are based on a 0.5-gram gold cut-off grade. The new estimate makes Livengood one of the largest new gold discoveries made globally over the past decade.

Lowering the cut-off grade to 0.3 gram gold, which is common for gold deposits amenable to bulk tonnage heap leaching, the resource counts climb to 223.4 million indicated tonnes grading 0.64 gram gold and 279.4 million inferred tonnes grading 0.57 gram gold for 9.7 million oz. gold. But the company’s president and CEO Jeff Pontius says the work is far from over.

“We’ve covered 2 sq. km and haven’t touched the edge of any mineralization, so are we in the best part of it? Is the best part deeper? Is it laterally? We don’t know yet,” he says. “It’s very exciting times right now as we get into the heart of this thing and really start figuring out just how big it is.”

In the days leading up to the new resource estimate Tower Hill’s share price gained 70¢ to reach a new all-time high of $2.67 before settling to $2.45 after the news came out. The company has a 52-week trading low of $1.07 and has 44 million shares issued.

“The story is really getting some traction and people really like it,” says Pontius. It’s a good thing, since Tower Hill has enough money on hand – $5 million – to complete only half of what it wants to do over the next year at Livengood. Pontius says in the middle of the summer, after a Phase 1 program, the company will raise at least enough to fund another $5 million of exploration.

In 2008 the company spent $8.5 million at the project, punching 116 holes into the ground and digging trenches to support the new resource estimate. The program was the first grid-drilling resource definition campaign for the project, which saw its first estimate in early 2008. And Tower Hill’s efforts in 2008 uncovered the high-grade Core area, which carries an average grade of almost 1 gram gold.

The company plans to start its 2009 drilling program in the next few weeks. The program will be driven by expansion – many holes on the edge of the 2008 drill pattern returned wide intervals grading better than 1 gram gold, as did several large step-out holes. As such the Phase 1 program will probe expansion to the northeast, southwest, and south.

Once those results arrive Tower Hill plans to calculate an updated resource estimate that will serve as the basis for a preliminary economic assessment of the project.

Phase 2 will be driven by the fact that many of the holes drilled in the second half of 2008 ended in mineralization. As such work will focus on expanding the deposit at depth and looking for deep, high-grade feeder zones. The company is planning to drill roughly 36,000 metres in the two programs.

It was Pontius, in his former role as North American Exploration Manager for AngloGold Ashanti (AU-N, AGD-L), who directed the one of the first rounds of drilling at Livengood in 2003. His group had put together a big targeting program for the Tintina belt, which arcs through Alaska and the Yukon into British Columbia, and Livengood was one of their targets.

Within 12 holes the major hit what is now considered the Livengood discovery hole: 130 metres grading 1.1 grams gold. But, as Pontius explained, the company was at the time focusing on other parts of the world and there wasn’t enough money to advance the Alaskan discovery.

“Anglo put together a concept of vending exploration targets to juniors for exploration,” says Pontius. “Anglo would hold a position in the junior in case they found something big enough, and then they’d have a built-in discount to acquire it. Really the strategy has worked out very well.”

Anglo sold the project, along with five other Alaskan targets, to Tower Hill in 2006 for a 20% interest in the junior. The major still holds 14.5% of Tower Hill.

Pontius knows that Livengood, with its new resource, has certainly started to catch attention from the majors. He welcomes the interest because Tower Hill’s goal is “not to be gold miners – we’re explorationists.” But the junior is now working against the clock.

“We are focused on making this an extremely large deposit, because it certainly has the potential for that,” he says. “We’re trying to make it a compelling takeover target, so that means we also have to get our homework done with metallurgical studies and environmental work. And we know we have to carry forward with all those things as quickly as we can.”

Livengood, aside from hosting a significant gold resource, carries other key characteristics. The deposit is near surface, outcropping at one end and then dipping shallowly, which means it would lend itself well to low-strip open-pit mining. In addition, metallurgical tests show that the oxide-transitional and the non-oxide zones both respond well to heap leaching.

The project sits 110 km north of Fairbanks, Alaska, along the paved Elliot Highway. The property is 55 km north of the Alaska State power grid, along the proposed Alaska natural gas pipeline route.