May 27,
2009
(TSX-V: BYV)
RAINY RIVER RECEIVES GOLD RESOURCE UPDATE: INDICATED
RESOURCES INCREASE BY 61 PERCENT IN ONE YEAR
(Bayfield Ventures owns properties adjacent to
Rainey River Resources)
Rainy River Ontario
Claims Map:
http://www.bayfieldventures.com/i/pdf/BYVRRArea.pdf
Mr. Nelson Baker of Rainy River Resources reports:
VANCOUVER, British Columbia -- Rainy River Resources Ltd. (RR.TSX-V) (the "Company") is pleased to
announce that it has received an independent mineral resource estimate
prepared by SRK Consulting (Canada) Inc. ("SRK") for the Company's
Rainy River property in northern Ontario. This updated mineral resource
statement is reported in accordance with Canadian Securities Administrator's
National Instrument 43-101 and was estimated in conformity with generally
accepted CIM "Estimation of Mineral Resource and Mineral Reserves Best
Practices" Guidelines, including the critical requirement that all
mineral resources "have reasonable prospects for economic
extraction".
Indicated and Inferred Resource Estimates
Based on a gold price of US$800 per ounce and a metallurgical recovery of 85
percent without considering silver credits, it is SRK's opinion that the
mineral resources for the Rainy River project are appropriately reported at a
cut-off grade of 0.4 grams of gold per tonne ("g/t gold") for open
pit mining to a maximum depth of 450 m (-60 m elevation) and 3.0 g/t for
underground mining below the pit. On this basis, SRK estimates that the Rainy
River project contains the
following resources:
1. Indicated resources of 2.225 million ounces of gold and 3.375
million ounces of silver at a gold grade of 1.24 g/t.
2. Inferred resources of 1.807 million ounces of gold and 4.548
million ounces of silver at a gold grade of 0.88 g/t.
The Mineral Resource Statement for the Rainy River Project is
summarized in Table 1, below, for the material within, below and peripheral
to an optimized pit envelope. A schematic cross section of the conceptual pit
outline used to report mineral resources is posted on Rainy's internet
website and may be viewed at www.rainyriverresources.com.
Table 1: Consolidated Mineral Resource Statement, Rainy River Gold
Project, Ontario
SRK Consulting, April, 28 2009
Category
|
Quantity
|
Grade
|
Metal
|
|
|
Gold
|
Silver
|
Gold
|
Silver
|
|
|
000't
|
gpt
|
gpt
|
000'oz
|
000'oz
|
|
Open Pit*
|
|
|
|
|
|
|
Indicated
|
|
|
|
|
|
|
Volcanic-hosted
|
|
|
|
|
|
|
Within
shell
|
55,027
|
1.21
|
1.89
|
2,135
|
3,350
|
|
Mafic-hosted
|
|
|
|
|
|
|
Within
shell
|
57
|
1.37
|
|
3
|
|
|
Inferred
|
|
|
|
|
|
|
Volcanic-hosted
|
|
|
|
|
|
|
Within
shell
|
12,491
|
0.95
|
2.36
|
382
|
950
|
|
Outside
shell
|
50,637
|
0.79
|
2.19
|
1,278
|
3,562
|
|
Underground**
|
|
|
|
|
|
|
Indicated
|
|
|
|
|
|
|
Volcanic-hosted
|
|
|
|
|
|
|
Below
shell
|
530
|
5.14
|
1.47
|
88
|
25
|
|
Inferred
|
|
|
|
|
|
|
Volcanic-hosted
|
|
|
|
|
|
|
Below
shell
|
875
|
5.22
|
1.27
|
147
|
36
|
|
|
|
|
|
|
|
|
Combined Mining
|
|
|
|
|
|
|
Indicated
|
55,615
|
1.24
|
1.89
|
2,225
|
3,375
|
|
Inferred
|
64,003
|
0.88
|
2.21
|
1,807
|
4,548
|
|
* Mineral resources are reported in relation to optimized pit shells. 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. SRK also estimated
zinc, lead and copper grades but these metals are not reported in the mineral
resource statement because they reasonably do not contribute to the metal
value of the gold mineralization. Nickel, copper and platinum group metals
were also estimated for one small zone (Zone 210) and are reported
separately. The consolidated resource statement above includes the gold and
mineralization in Zone 201.
** Open pit mineral resources are reported at a cut-off of 0.4 gram of gold
per tonne, Underground mineral resources are reported at 3.0 grams of gold
per tonne gold. Cut-off grades are based on a gold price of US$800 per ounce
gold and a gold metallurgical recovery of eighty-five percent, without
considering revenues from other metals.
SRK's database for this study included all information obtained to December
15, 2008 for 538 boreholes (204,574 metres) drilled by Rainy
River and Nuinsco
Resources Ltd., the previous project operator. The resource area was divided
into fourteen domains and appropriate rock densities, gold grade caps and
search ellipse sizes were established for each domain. A block model was
created with block size set at 10 by 10 by 5 metres. Metal grades were
estimated from 1.5 metre composited sample intervals using ordinary kriging,
or an inverse distance algorithm if insufficient composites were available to
derive reliable variograms.
The SRK study has increased by 61 percent the indicated mineral
resources established by Caracle Creek International Consulting Inc.
("CCIC") using holes drilled to December 19, 2007, as reported in
the Company's February 28, 2008 news release. This substantial gain was
achieved mainly by infill drilling which upgraded part of CCIC's inferred
resources to the indicated category.
SRK considered various parameters that have a major impact on the prospects
for economic extraction including the following estimated costs of mining,
milling and administration for open pit (Table 2) and underground (Table 3)
operations, probable pit slopes and expected gold recovery rates.
Table 2: Conceptual Pit Optimization Assumptions Considered for Open Pit
Resource Reporting
Parameter
|
Assumption
|
Pit
slope angle:
|
42 north
wall, 50 other walls (degrees)
|
Mining cost (ore and waste)
|
C$1.00/t rock
|
Variable Mining Cost / 10m bench
|
C$0.02/t
|
G & A costs
|
C$1.25/t
feed
|
Process cost:
|
US$7.00/t
|
Process recovery
|
85 percent
|
Assumed process rate
|
20,000 tpd
|
Gold price:
|
US$800 per
ounce
|
Mining dilution
|
5.0
percent
|
Exchange rate (C$/US$)
|
1.0
|
Mining recoveries
|
100
percent
|
Table 3: Conceptual Assumptions Considered for Underground Resource
Reporting
Parameter
|
Assumption used for Optimization
|
Mining
costs
|
C$50.00/t rock
|
Assumed
process rate
|
20,000 tpd
|
Assumed
mining rate
|
600 tpd
|
G &
A costs
|
C$7.50/t feed
|
Process
cost:
|
US$7.00/t
|
Process
recovery
|
85 percent
|
Gold
price:
|
US$800 per ounce
|
Mining
dilution
|
10.0 percent
|
Exchange
rate (C$/US$)
|
1.0
|
Mining
recoveries
|
100 percent
|
SRK's study, due principally to the higher density of diamond drilling, is
more comprehensive and rigorous than the previous resource estimate and a
higher level of confidence can be placed in the updated mineral resource
quantities and grade estimates. The evaluation of pit depths and gold cut-off
grades are conceptual in nature: a more thorough economic study is required
to upgrade the mineral resources to mineral reserves. However, mineral
resources are not mineral reserves and do not have demonstrated economic
viability and it is uncertain if further exploration will be successful in
converting the mineral resources into mineral reserves..
Importantly, the infill drilling significantly increased the original 1.03
g/t gold grade of the portion of the inferred resources that was converted to
indicated resources even though SRK used a lower gold cut-off than CCIC (0.4
versus 0.5 g/t). As a result, the enlarged indicated gold resource
established by SRK has essentially the same gold grade (1.24 g/t versus 1.26
g/t) as the smaller indicated resource previously reported by CCIC. Most of
the converted resources were replaced by new inferred resources identified by
exploration drilling proximal to the previous resources.
Both the indicated and inferred mineral resources are contained primarily
within the large ODM 17 Zone and the 433 Zone to the north. Lesser
contributions are obtained from the neighbouring HS, Cap and five small,
unnamed zones and from the 34 Zone, a younger, crosscutting Ni-Cu-PGE-Au-Ag
deposit.
Management of Rainy River Resources is very encouraged by the updated mineral
resource estimates, particularly the 61 percent year-over-year increase in
indicated gold resources and the significant increase in gold grade that was
determined from the infill drilling despite using a lower gold cut-off and
applying more stringent mining parameters in qualifying the resources.
Additional Mineralization
Approximately 1.1 million ounces of additional gold mineralization at
the same 0.4 g/t cut-off grade as the open pit resources have been identified
below and proximal to the proposed open pit. None of this mineralization
presently qualifies as a mineral resource and there is no certainty that any
of the mineralization will be converted to resources in the future because
continuity and reasonable prospects for economic extraction have not been
demonstrated. In the Company's view, however, this additional mineralization
is a good measure of exploration progress in the immediate area of the
proposed pit and thus of the potential for increasing the indicated and
inferred resources through further drilling.
Qualified Persons
The mineral resource statement was prepared by Dorata El-Rassi, P.Eng, and
Glen Cole, P.Geo 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.
The exploration program in Richardson
Township is managed by
Wally Rayner, P.Geo, Project Manager and is supervised by Stuart Averill,
P.Geo, Vice-President Exploration. The Company's regional exploration
manager, C.J. Baker, M.Sc., directs the Off Lake exploration program 15 km to
the northeast. Both Mr. Averill, P.Geo and Nelson W. Baker, P.Eng are the
Qualified Persons for this project in accordance with the National Instrument
43-101 guidelines and Mr. Baker is the person responsible for the contents 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.
RAINY RIVER RESOURCES LTD.
Nelson W. Baker
President
2009 Canjex Publishing
Ltd.
Bayfield Ventures Shares Issued &
Outstanding
20.1 Million Shares
|