Tower Hill tallies Livengood resource

VANCOUVER — International Tower Hill Mines (ITH-V, THM-X) sees major potential for its flagship Livengood project, in Alaska, now that an initial resource estimate has outlined a significant gold deposit in the Money Knob zone.

An independent study shows the zone holds 181 million inferred tonnes grading 0.54 gram gold per tonne for about3.1 million contained ounces, using a 0.3-gram gold cutoff grade. The inferred resource is within a 2-sq.-km section of the zone and based on 39 drill holes (averaging 212 metres in depth) and seven trenches — each about 60 metres in length.

The gold inventory at Livenhood, located about 110 km north of Fairbanks, compares closely in size and grade to Kinross Gold’s (K-T, KGC-N) Fort Knox mine, about 50 km southeast. Fort Knox holds proven and probable reserves of 160 million tonnes grading 0.53 gram gold. The large open-pit operation produced roughly 333,000 oz. gold in 2006 at total cash costs of just under US$400 per oz.

Kinross is building a large run-of- mine heap-leach facility that will augment its milling facility, and estimates an average heap-leach recovery of 61% for its run-of-mine ore.

Metallurgical studies on mineralized material from Livengood indicate gold recoveries averaging 96.7% from the oxide and weakly oxidized rock with very quick cyanide extraction. Deeper, non-oxidized material averaged 58.7% gold recovery in the bottle-roll tests.

Tower Hill says ore tends to form at the intersection of favourable host rocks, with major structural zones that likely acted as conduits for the intrusion-related gold-bearing fluids. The volcanic package tends to be the best host at the project and is persistently mineralized.

The deposit occurs at surface and forms stratiform and cross-cutting bodies in a folded and faulted sedimentary- volcanic sequence. The main mineralized body occurs along an east-west structural zone at least 2 km long and 300-800 metres wide.

Situated just off the paved Elliot Highway and along the Trans Alaska Pipeline Corridor, Livengood has good logistics and infrastructure potential. The project is roughly 85 km by road north of a power grid.

Tower Hill notes that with only about a quarter of the known mineralized zone drilled so far, the project has considerable expansion potential. The company plans to boost its 2008 work program and has earmarked $7.5 million to upgrade and increase the resource — providing data for a preliminary economic scoping study anticipated by mid-2009.

The junior acquired Livengood in mid-2006 — as part a larger portfolio of mineral projects — from AngloGold Ashanti (AU-N, AGD-L).

Tower Hill also recently released initial resource estimates on a pair of other Alaskan projects. At Terra, inferred resources stand at 428,000 tonnes grading 12.2 grams gold and 23 grams silver in the high-grade vein system, while at LMS, the inferred resource is pegged at 5.9 million tonnes averaging 0.89 gram gold (167,000 contained ounces) at a 0.3- gram gold cutoff grade.

Shares of the Alaskan-focused explorer moved down 8 on the news to close at $2.05. Given its roughly 40 million shares outstanding, Tower Hill posts a market capitalization of $80 million. The stock has a 52-week trading range of $1.28-3.15.