Tower Hill raises $10 million, doubles Livengood drill program

Vancouver – Its financing brought in twice as much as it expected so International Tower Hill Mines (ITH-V) has doubled the size of its drill program at the Livengood gold project in Alaska. And recent drill results continue to show that the project deserves the re-doubled effort.

Two holes punched into the northeast portion of the Core zone returned promising intercepts as did two drilled at the southern end of the high-grade zone.

Hole 112, one of the holes northeast of the Core zone, returned 1.11 grams gold per tonne over 100 metres from 256 metres downhole, after a higher intercept returned 0.97 gram gold over 17 metres. From 100 metres east, hole 111 returned 0.59 gram gold over 68 metres.

The company called the intercepts in hole 112 “critical” as they confirm the presence of a second lower fault thrust that duplicates the favourable rock section. In addition, the bottom of the hole showed very strong alteration and gold mineralization, indicating there may be another higher-grade centre similar to the Core zone developing in this area.

Tower Hill also released results from two holes in the southern portion of the Core zone. Hole 109 cut 18.3 metres grading 0.92 gram gold from just 9 metres below surface, followed by 3 metres of 1.28 grams gold from 107 metres downhole, 4.6 metres of 0.9 gram gold from 139 metres depth, and then 38.1 metres grading 1.23 grams gold from 165 metres depth. And hole 110 returned 205.7 metres averaging 1.43 grams gold, starting 149 metres downhole and including 38 metres grading 3.08 grams gold.

Both holes ended in significant mineralization, indicating that the deposit is open at depth. In fact, many of the holes completed in the second half of 2008 also ended in mineralization.

On the heels of these latest results Tower Hill says drilling over the next month will focus on the northeast and south zones, which it calls “the two largest and most prospective targets areas” at present. The company started its winter drill program in early February and, with a second drill recently added, plans to drill 10,000 metres before spring.

Initially, Tower Hill had only planned to drill some 6,000 metres in the winter program. But when the company got overwhelming response to its private placement offering, plans changed. Initially Tower Hill announced a $5-million financing, offering 2 million shares at $2.50 a piece. But the offering included an equally-sized overallotment option.

Not only did the overallotment sell, Tower Hill added another 200,000 shares to the bonus component and those all sold as well. In the end, the company sold 4.2 million shares and walked away with $10.5 million. With its coffers full, Tower Hill now plans to drill a total of 40,000 metres at Livengood this year, up from a planned 16,000 before the financing closed.

There are presently two drills turning at Livengood; when the winter program is complete the company plans to update the resource estimate again, for use in preparing a preliminary economic assessment. In the summer Tower Hill will use three rigs to drill another 30,000 metres.

In late January Tower Hill announced a new resource estimate for Livengood, following its 2008 grid drilling resource definition campaign. The indicated resource now stands at 128.6 million tonnes grading 0.83 gram gold; inferred resources add 142.1 million tonnes grading 0.74 gram gold. On its own, the higher-grade Core area hosts 68.8 million indicated tonnes grading 1.03 grams gold plus 65.2 million inferred tonnes grading 0.93 gram gold.

The thick, shallowly-dipping gold deposit at Livengood outcrops at one end and looks amenable to open-pit mining. And Tower Hill’s initial metallurgical testwork shows the deposit is amenable to heap leach gold recovery but milling might improve recoveries, an idea now being tested.

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. Tower Hill owns the 44-sq. km Livengood land package completely.

Tower Hill’s share price gained a penny on the latest drill results to close at $2.66. The company has a 52-week trading range of $1.07 to $3.20 and has 48.5 million shares outstanding, 60.7 million fully diluted.