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TORONTO, ONTARIO--- Rainy
River Resources Ltd. (TSX VENTURE:RR)
("Rainy River" or the "Company") is pleased to
announce an updated mineral resource statement for the Rainy River Gold
Project ("RRGP") in Northwestern Ontario. Mineral resources
were estimated by SRK Consulting (Canada) Inc. ("SRK") and
are reported in accordance with Canadian Securities Administrators
National Instrument 43-101. Mineral Resources above a 450 metre depth from the surface are considered to be
amenable to open pit extraction, whereas mineral resources below this
are considered to be amenable to underground extraction.
Potential open pit mineral resources are reported at a cut-off of 0.35
g/t gold, whereas potential underground mineral resources are reported
at a cut off of 2.5 g/t gold. The consolidated mineral resource
statement for the RRGP is tabulated in Table 1.
Highlights
-- 3.42 M oz gold in Measured and Indicated classes -- 3.17 M oz gold in Inferred class -- RRGP reports Measured resources for the first time -- Infill program demonstrates improved continuity Table 1. Consolidated Mineral Resource Statement(i), Rainy River Gold Project SRK Consulting (Canada) Inc., February 24, 2011. ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Tonnes Au Au Ag Ag Category '000s g/t ounces g/t ounces ---------------------------------------------------------------------------- Open Pit(ii) Measured 14,707 1.21 572,272 1.84 869,332 Indicated 77,934 1.05 2,639,850 2.24 5,615,597 Measured and Indicated 92,641 1.08 3,212,122 2.18 6,484,929 Inferred 104,591 0.80 2,702,754 2.31 7,781,272 ---------------------------------------------------------------------------- Underground(ii) Measured 39 5.66 7,149 2.38 3,009 Indicated 1,197 5.18 199,147 3.30 127,019 Measured and Indicated 1,236 5.20 206,296 3.27 130,028 Inferred 3,831 3.83 472,029 2.62 322,811 ---------------------------------------------------------------------------- Combined Mining Measured 14,746 1.22 579,421 1.84 872,341 Indicated 79,131 1.11 2,838,997 2.26 5,742,616 Measured and Indicated 93,877 1.13 3,418,418 2.19 6,614,957 Inferred 108,422 0.91 3,174,783 2.32 8,104,083 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (i) Mineral resources are reported in relation to an elevation determined from conceptual pit shells, and not all of the inferred resources lie within the optimized pit shell. Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate. All assays have been capped where appropriate. (ii) Open pit mineral resources are reported at a cut-off of 0.35 g/t gold, underground mineral resources are reported at 2.5 g/t gold. Cut-off grades are based on a gold price of US$1,025 per ounce gold and gold recovery of 88% for open pit resources and 90% for underground resources, without considering revenues from other metals.
Commentary
"We are very pleased to have increased our global resources to
3.42 M ounces in Measured and Indicated and 3.17 M ounces in Inferred,
a significant increase from 2010," commented Raymond Threlkeld, President and CEO of the Company.
"In addition, last year's infill program has greatly enhanced the
quality of the resource, reporting Measured mineral resources for the
first time on the project. The 107,000 metres
that we drilled last year demonstrated the in-pit continuity that will
allow us to proceed with scoping studies to determine the optimum pit
size and mining methods. We will be aggressively expanding our
exploration in 2011 to over 100,000 metres of
drilling, to add to the potential in-pit ounces from the South and Cap
Zones, and to conduct regional exploration outside the known resources
to begin realizing the district potential at Rainy River."
Technical Description
Gold mineralization at the Rainy River Gold Project has a volcanogenic
origin associated with minor amounts of silver, copper and zinc. Sulphide zones are generally sub-parallel to
foliation, which strikes at approximately 300 degrees and dips 50
degrees to 70 degrees to the south. As of December 31, 2010 the
estimated gold mineral resource is based on data received from 836
diamond drill holes totaling 380,069 metres.
Since the previous mineral resource estimate (see press release dated
March 4, 2010) the Company has drilled an additional 174 diamond drill
holes totaling 107,042 metres.
Mineral resources are reported over an area measuring approximately 2 kilometres x 1 kilometre
to a depth of 700 metres. Mineral resources
have been estimated using a geostatistical
block model approach constrained by seven major zones sub-divided into
23 resource domains. Block size was set at cubes 5 metres
in size. These zones are termed the ODM/17, 433, HS, New, Cap, 34 and
other Zones. The bulk of the mineral resources occur in the ODM/17 and
433 Zones. Metal grades were estimated using ordinary kriging as the principal estimator. Metal grades
were estimated separately in each domain from capped composite data
within that domain. Kriging parameters were
derived from variogram models with grade
estimation completed in two successive passes. The first estimation
pass generally considered a search neighbourhood adjusted to full
variogram ranges. The size of the search ellipse was usually doubled
for the second estimation pass. Mineral resources are classified as
Measured, Indicated and Inferred, considering various aspects including
geological continuity, data quality, block distance from the nearest
informing composites, and variography results.
A pit optimizer was used to determine the quantities of material
offering "reasonable prospects for economic extraction" by an
open pit. Results from the pit optimization are used solely for the
purpose of reporting mineral resources that have "reasonable
prospects for economic extraction" by an open pit and do not
represent a thorough economic study as is required to evaluate mineral
reserves. SRK considers that the material above the final depth of the
conceptual pit shell (450 metres below the surface) offers reasonable
prospects for economic extraction from an open pit, because ongoing
drilling results suggest that the zone of gold mineralization is
broader than currently modeled and that new drilling information should
positively impact future pit optimizations. Input assumptions used for
the conceptual pit optimization and to derive the cut-off grade of 0.35
g/t gold for open pit mineral resources include:
-- Gold price; US$1,025/oz (3 year trailing average as of December 31, 2010) -- 88% gold recovery -- $1.70/t mining cost per tonne ore -- $6.46/t processing costs -- $0.90/t general & administrative costs -- 20,000 tpd processing throughput (combined pit and underground) -- 10% dilution -- 54 degrees wall angle (West, East), 50.5 degrees wall angle (South), 40.5 degrees wall angle (North)
The block model quantities
and grade estimates below 450 metres were also reviewed to determine
the portions of the Rainy River deposit having "reasonable
prospects for economic extraction" from an underground mine.
Assumptions used to derive the cut-off grade of 2.5 gpt gold for
underground resources include:
-- Gold price; US$1,025/oz (3 year trailing average as of December 31, 2010) -- 90% gold recovery -- $55/t mining cost per tonne ore -- $6.46/t processing costs -- $0.90/t general & administrative costs -- 20,000 tpd processing throughput (combined pit and underground) -- 20% dilution
Year on Year Review:
The increase in reported mineral resources over the previous resource
estimate disclosed in March 2010 is attributable to a combination of
factors including:
-- Significant increase in drilling (107,042 metres) and sampling data (72,000 additional samples), leading to increased grade continuity; -- A better understanding of the geological model and its secondary structural controls, enabling reduced block size, revised variography and better domaining; and -- Improved metallurgical recovery and geotechnical parameters for open pit slope design.
Sensitivity Analysis:
Block model quantities and grade estimates at Rainy River are sensitive
to the selection of cut-off grade. The sensitivity of block model
quantities for open pit (above 450 metres depth) and underground
material (below 450 metres depth) to gold cut-off grade is presented in
Table 2 and Table 3 below.
Table 2: Block Model Quantities and Grade Estimates(i) at Various Cut-off Grades - Potential Open Pit Material ---------------------------------------------------------------------------- Cut off grade Tonnes Grade Grade Au Ag Au g/t Category '000s Au g/t Ag g/t Ounces Ounces ---------------------------------------------------------------------------- 0.30 Measured 16,449 1.12 1.77 590,410 937,660 ---------------------------------------------------------------------------- Indicated 92,240 0.94 2.14 2,788,760 6,349,501 ---------------------------------------------------------------------------- Inferred 131,757 0.70 2.15 2,984,892 9,121,949 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- 0.35 Measured 14,707 1.21 1.84 572,272 869,332 ---------------------------------------------------------------------------- Indicated 77,934 1.05 2.24 2,639,850 5,615,597 ---------------------------------------------------------------------------- Inferred 104,591 0.80 2.31 2,702,754 7,781,272 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- 0.40 Measured 13,350 1.30 1.88 555,947 808,682 ---------------------------------------------------------------------------- Indicated 67,694 1.16 2.33 2,516,737 5,067,116 ---------------------------------------------------------------------------- Inferred 86,696 0.89 2.42 2,487,478 6,811,674 ---------------------------------------------------------------------------- Table 3: Block Model Quantities and Grade Estimates(i) at Various Cut-off Grades - Potential Underground Mining Material ---------------------------------------------------------------------------- Cut off grade Tonnes Grade Grade Au Ag Au g/t Category '000s Au g/t Ag g/t Ounces Ounces ---------------------------------------------------------------------------- 2.5 Measured 39 5.66 2.38 7,149 3,009 ---------------------------------------------------------------------------- Indicated 1,197 5.18 3.30 199,147 127,019 ---------------------------------------------------------------------------- Inferred 3,831 3.83 2.62 472,029 322,811 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- 3.0 Measured 31 6.41 2.58 6,484 2,609 ---------------------------------------------------------------------------- Indicated 833 6.25 3.67 167,235 98,295 ---------------------------------------------------------------------------- Inferred 2,835 4.21 2.86 384,153 260,276 ---------------------------------------------------------------------------- (i) The reader is cautioned that the figures presented in Table 2 and Table 3 should not be misconstrued with the mineral resource statement presented in Table 1. The figures are only shown to illustrate the sensitivities of the block model quantities and grade estimates to the selection of cut-off grade.
Qualified persons
The mineral resource statement was prepared by Dorata El-Rassi,
P.Eng,(APEO #100012348) and Glen Cole, P.Geo (APGO #1416), of SRK, both
"independent qualified persons" as that term is defined in
National Instrument 43-101. SRK's Technical Report will be filed on
SEDAR within the prescribed 45 days following the date of issuance of
this news release.
Rainy River's exploration program in Richardson Township is being
supervised by Kerry Sparkes, P.Geo. (APEGBC #25261), Vice-President
Exploration and a Qualified Person as defined by National Instrument
43-101. Garett Macdonald, P.Eng. (PEO #90475344), is the person
responsible for the content of this news release. The Company continues
to implement a rigorous QA/QC program to ensure best practices in
sampling and analysis of drill core. The procedures of the QA/QC
program are detailed on Rainy River's website at www.rainyriverresources.com.
About Rainy River
Rainy River is a Canadian precious metals exploration company whose key
asset is the Rainy River Gold Project. With approximately $130 million
in its treasury, the Company is well funded to conduct a dual-focused
drilling program consisting of: 1) definition diamond drilling of the
main gold resources in preparation for scoping and prefeasibility
studies, and 2) selective diamond drill testing of high-priority gold
targets defined primarily by RC drilling within the large gold system
centered in Richardson Township. The Company's property is extremely
well located in the southwestern corner of Northern Ontario near the
U.S. border. It is accessed by a network of roads and is close to
hydro-electric infrastructure. The Rainy River district has a skilled
labour force and is one of the lowest-cost areas for mineral
exploration and development in Canada. The Company is also working to
advance the early-stage discoveries at its TPK Joint Venture Property,
also in Ontario, where it can earn a 51% interest in the property from
Northern Superior Resources. Ontario has low political risk and,
according to the annual Fraser Institute global survey of the mining
industry, has consistently ranked as one of the top jurisdictions
embracing mineral development.
RAINY RIVER RESOURCES LTD.
Raymond Threlkeld, President & CEO
This release includes certain statements that may be deemed to be
"forward-looking statements". All statements in this release,
other than statements of historical facts, that address events or
developments that management of the Company expects, are
forward-looking statements. Although management believes the
expectations expressed in such forward-looking statements are based on
reasonable assumptions, such statements are not guarantees of future
performance, and actual results or developments may differ materially
from those in the forward-looking statements. The Company undertakes no
obligation to update these forward-looking statements if management's
beliefs, estimates or opinions, or other factors, should change. Factors
that could cause actual results to differ materially from those in
forward-looking statements, include market prices, exploration and
development successes, continued availability of capital and financing,
and general economic, market or business conditions. Please see the
public filings of the Company at www.sedar.com for
further information.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
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