Vancouver – Rainy River Resources (RR-V, RRFFF-O) has tabled its first gold resource estimate for its namesake project located roughly 80 km south-southeast of Kenora in northwestern Ontario.
Using a 0.5 gram gold per tonne block cut-off grade the study reviews 34.2 million indicated tonnes at 1.26 gram gold and 2.6 grams silver per tonne — for almost 1.4 million contained oz. gold and 2.9 million contained oz. silver within the 17-ODM, 433 and CAP zones plus the Beaver Pond area.
The report also tabled an additional 67.6 million inferred tonnes grading 1 gram gold and 2.4 grams silver for a further 2.2 million contained oz. gold and 5.1 million contained oz. silver.
Modeling uses a bulk tonnage open-pit mining scenario for the five near-surface deposits and is based on over 145,000 metres of drilling by Rainy River and previous operator Nuinsco Resources (NWI-T, NWIFF-O).
“In only three years we have increased the contained ounces an impressive 600% over Nuinsco’s resource estimate and based upon expenditures to date, our exploration costs rank as one of the lowest in Canada at only $8.00 per contained ounce of gold,” states Nelson Baker, Rainy River’s president and CEO in the news release.
The company says it plans a 42,000-metre drill program for 2008 with an eye at further expanding its resource.
Recent drilling on the 433 zone turned in intervals of 27.8 metres at 5.7 grams gold, in hole NR07-218, including a high-grade section of 4,158 grams gold over one metre. Further down the same hole a six metre interval grading 2.9 grams gold and 1.9% zinc was also encountered.
Additionally, a recent scoping-level metallurgical test program on 21 composite samples from the 17-ODM zone returned average gold recoveries of 94% by using a combination of gravity concentration followed by flotation of the gravity tailings.
The Rainy River gold project is situated within the Rainy River greenstone belt and is associated with what is interpreted as an Archean caldera structure. Widespread past drilling identified a roughly 6-sq. km semi-circular area of gold enriched felsic-intermediate volcaniclastic rocks.
In following up 1980s Ontario Geological Survey programs that identified significant gold-in-till, overburden and hardrock drilling by Nuinsco Resources in the mid-1990s discovered a large geochemical anomaly and led to the identification of a hardrock source to the gold mineralization.
Rainy River acquired the project from Nuinsco in mid-2005 for staged cash payments of $2.5 million plus a further $2.5 million due upon commencement of commercial production. In its corporate formation to hold the Rain River project, Rainy River Resources issued 7% of its capital (roughly 2.2 million shares) to Nuinsco as part of the deal. Nuinsco also retains a royalty of $1 per tonne of ore produced from the property.
Shares of Rainy River have recently buoyed to the $5.40-level giving the gold explorer a market capitalization of almost $300 million based on its roughly 55 million shares outstanding. The stock has a 52-trading range of $3.60-$5.95.
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