Livengood hits 12 million oz. for Tower Hill

Vancouver – Three years ago International Tower Hill Mines (ITH-V) started its first drill program at the Livengood project, a modest 2,500-metre program designed to follow up on interesting gold intercepts by predecessor AngloGold Ashanti (AU-N, AGG-A).

Now, 83,200 metres of drilling later, Tower Hill has increased the gold resource at Livengood for the fourth time since its initial resource in February 2008, bringing the total gold count above 12 million ounces.

Indicated resources stand at 297 million tonnes grading 0.85 gram gold per tonne for 8.1 million oz. gold; inferred resources add 164 million tonnes averaging 0.84 gram gold for another 4.4 million oz. The 12.5-million oz. gold resource is based on a 0.5-gram-gold cut-off grade.

Using a 0.3-gram-gold cut-off grade, the resource grows to contain 17.6 million oz. gold, within 525 million indicated tonnes grading 0.65 gram gold and 336 million inferred tonnes grading 0.61 gram gold. This larger resource forms a coherent body covering 3 sq. km and it remains open in several directions. Tower Hill says it is currently conducting major step out drilling from the deposit towards the edges of the larger gold anomaly in order to assess the system’s lateral extent.

Tower Hill says roughly 60% of the deposit has been affected by varying degrees of oxidation, making it amenable to heap-leach gold recovery. The other 40% is unoxidized.

Compared to the initial resource from early 2008 the grade has improved 18%. Tower Hill plans to update the resource again in early 2010, once all data from the 2009 drill program has been received. The company has had four drill rigs turning at the project all summer and still plans to complete another 25 holes before ending the program. Results from another 37 completed holes are pending.

The 64% resource increase in the latest estimate was driven by the new Sunshine and Northeast zones. In these areas mineralization begins at surface and extends to depth of over 170 metres, which means the new areas will likely form a key part of early operations at the site.

How to develop those operations will be the key question behind the project’s first economic study, a preliminary economic assessment that will be based on this new resource estimate. The study “will incorporate the large, new, outcropping oxide resource in the Sunshine and Northeast zones,” according to Tower Hill, and is expected to focus on the component of the deposit amenable to heap leaching.

The heap-leach study should be out before the end of the year. In early 2010, when the milling metallurgical studies currently underway are complete, Tower Hill will augment the heap-leach study with an assessment of the economics of milling and recovering gold from the unoxidized portions of the deposit.

Tower Hill controls leases to the entire 44-sq. km Livengood project; the main lessor is the Alaska Mental Health Trust, which is mandated to promote resource development on its lands.

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

Tower Hill’s share price has certainly enjoyed the Livengood ride. Throughout 2008 it hovered around the $1.50-mark but once the January resource update was announced it started an enduring upwards climb. On news of the latest resource boost it gained 55¢ to hit a new midday high of $6.18 before settling to $5.94, a gain of 30¢. The company has 56 million shares outstanding.