Livengood resource tops 10 million oz. gold

Vancouver – A winter drill program at International Tower Hill Mines‘ (ITH-V) Livengood project in Alaska has boosted the gold count in the deposit’s high-grade core by 20%.

The Core zone, differentiated by a cut-off grade of 0.7 gram gold per tonne, now hosts 85 million indicated tonnes grading 1.06 grams gold and 68.9 million inferred tonnes averaging 0.99 gram gold. Contained gold now sits at 5.1 million oz., which means the company’s drilling efforts over the winter added 860,000 oz. to the zone.

The Money Knob deposit as a whole now contains 234.9 million indicated tonnes grading 0.69 gram gold and 280.6 million inferred tonnes averaging 0.59 gram gold, using a 0.3-gram-gold cut-off grade. Total contained gold has now reached 10.5 million oz.

“We went from an ordinary kriging model to a multiple indicator kriging model – it created a much better, tighter model for us,” says Jeff Pontius, president and CEO of International Tower Hill. “What we saw was we could upgrade some inferred blocks, add some new ones from step-out drilling, and then the big thing was we added a lot more indicated ounces. And since a lot of those were at higher grade the grade of the overall model came up 5 or 6%.”

The Core zone’s expansion came primarily from drill results that connected the Core to another high-grade zone known as the Southwest zone, which until now had been a discrete high-grade area. Pontius says drills will move down to that area again in the coming weeks to test for further expansion of the high grade mineralization to the south and southwest.

The Money Knob deposit is a shallowly dipping, outcropping ore zone likely amenable to open pit mining. The deposit covers 2.6 sq. km, only a small portion of the 12-sq. km gold target zone at Livengood. And Money Knob remains open in all directions – in fact, many of the holes drilled on the edge of the drill pattern to date have returned thick mineralized intercepts.

International Tower Hill currently has four drills turning on the property – three reverse circulation and one core – and is advancing a 45,000-metre drill program. To date, 25 of the planned 120 holes have been completed but no assays have yet been released. The company expects to release an updated resource estimate in October.

The summer program will initially continue to focus on the high-grade Core zone. It will also include a number of deep holes probing for mineralization at depths 300 to 600 metres below the delineated deposit. Finally, International Tower Hill plans to drill-test four targets outside of the Money Knob area.

In the meantime, with the new resource estimate in hand the company is ready to start work on a preliminary economic assessment (PEA) for Livengood. It expects to have that initial economic study complete in the next month.

And Pontius is also excited about recent results from metallurgical studies on Money Knob rock. The PEA will assume a facility using standard milling, gravity concentration to extract the bulk of the gold, and the cyanidation of the tailings to extract the rest. However, two important factors could simplify that standard procedure.

First, recent results indicate that portions of the deposit have an unusually high gravity concentration component – in those zones more than 75% of the gold reports to just 15% of the material. That means it might be possible to rely solely on gravity concentration and not leach the tailings with cyanide. The bulk of the gold would concentrate in roughly 5% of the material and the tails would instead simply be beached. If this simplified procedure enables sufficient gold recovery, the needed tailings facility would be much smaller and the environmental hurdles for permitting significantly reduced.

Second, International Tower Hill is currently conducting size fraction optimization tests to determine the best grind size for gravity concentration. Pontius says it is starting to look like a fairly coarse grind might suffice, which would reduce the capital costs for the milling facility and the facility’s power demands.

Finally, by the end of the year International Tower Hill expects to receive the permitting path summary from the Alaska large mine permitting program.

Livengood is favourably located, sitting 110 road km north of Fairbanks along the paved Elliot Highway and the Trans-Alaska pipeline corridor. It is also 55 km north of the Alaska state power grid, along the proposed Alaskan natural gas pipeline route. International Tower Hill owns the 44-sq. km Livengood land package completely.

In early May International Tower Hill received $23.1 million from the exercise of 7.8 million warrants and options. The injection boosted the company’s treasury to $32.8 million, which the company says is enough for fund two years of exploration and project advancement. In the first half of 2009 the company spent roughly US$5 million; it has budgeted another US$7.5 million for the remainder of the year.

On news of the new resource estimate International Tower Hill’s share price gained 13¢ to close at $3.45. The company has a 52-week trading range of $1.07 to $4 and has 56 million shares outstanding.