VANCOUVER, Jan. 6, 2015 /CNW/ - International Tower
Hill Mines Ltd. ("ITH" or the "Company") - (TSX: ITH) (NYSE-MKT:
THM) today announces the progress made to date toward optimization
of the Livengood Gold Project (Project), an outstanding project in
a favorable jurisdiction that remains highly leveraged to the price
of gold. The 2014 work has developed an improved production
schedule, as compared to the feasibility study that was summarized
in the September 4, 2013 NI-43-101
report (September 2013 Study), and
generated detailed work plans for 2015. The work plans will
include additional metallurgical tests and engineering and focus on
all aspects of the Project, including confirmation of the flow
sheet and optimizing the operating costs. Once defined, these
operating costs (OPEX) will then be used to evaluate and optimize
the project configuration and capital costs (CAPEX), including
determination of the optimum scale for the Project.
Tom Irwin, CEO, said "We have
more work to do, but I am pleased with the progress we made this
year and believe 2015's work plans and optimization efforts will
allow us to bring the best project forward to prepare for
permitting."
Findings from 2014 Work
During 2014, in addition to the mine production scheduling and
detailed metallurgical test work review, power supply alternatives
were reviewed to determine how changing energy supply dynamics
might impact the Project assumptions regarding electrical
generation. Construction and operations camp alternatives
were reviewed to better define the costs of supporting the manpower
requirements for the Project. The Company has also continued
to advance environmental baseline work in support of future
permitting in order to better position the Project for a
construction decision when warranted by market conditions.
Production Scheduling
Work completed by Metal Mining Consultants Inc. of Denver, Colorado (MMC) utilizing Maptek Vulcan
MineModeller, WhittleTM Pushback Optimizer and Minemax
Scheduler has resulted in revised production schedules for the
Project at throughputs ranging from 11,250 to 90,000
tonnes/day. At the 90,000 tonnes/day case (the same
throughput as in the 100,000 ton/day case used in the September 2013 Study), the revised production
schedule is shown in Table 1.
Table 1: MMC Optimized Production
Schedule at 90,000 tonnes/day
|
Total
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
Year 11
|
Year 12
|
tonnes
|
386,788,771
|
26,600,000
|
33,300,000
|
33,300,000
|
33,300,000
|
33,300,000
|
33,300,001
|
33,300,000
|
33,300,000
|
33,300,002
|
33,300,000
|
31,312,355
|
29,176,413
|
Au g/tonne
|
0.77
|
0.90
|
0.84
|
0.92
|
0.84
|
0.77
|
0.77
|
0.75
|
0.77
|
0.66
|
0.78
|
0.53
|
0.66
|
recovered Au
oz
|
7,723,552
|
648,202
|
755,582
|
816,570
|
723,421
|
681,598
|
649,977
|
652,601
|
645,759
|
562,343
|
631,929
|
444,959
|
510,611
|
As an estimate of the potential scope of this improvement,
importing this revised production schedule into the financial model
used in the September 2013 Study
would result in an increase in the NPV5% @ $1500/oz. gold of US $305M.
MMC also completed an evaluation of the overall pit slope
sensitivities at 40, 45, and 48 degrees. Again, as an
estimate of the potential scope of this change, integrating 45
degree slopes into the mine plan for the first five years, then
reverting to the design slopes used in the September 2013 Study and importing the resulting
operating costs into the financial model used in the September 2013 Study, would result in an
additional increase in the NPV5% @ $1500/oz. gold of US $95M.
Metallurgical Review
As a result of the detailed metallurgical review, the estimated
recovery obtained from Rock Type 9 Main Volcanics has been
re-evaluated and, based on the feasibility test work, is estimated
to be 78.8% as compared to the 84.1% used in the September 2013 Study. To illustrate the
potential effect of this, incorporating this recovery change into
the financial model used in the September
2013 Study would result in a decrease in the NPV5% @
$1500/oz. gold of US $183M.
Note that while the mine design, production schedule, and
recovery concepts described above will be carried forward and
incorporated into future engineering studies of the Project, the
actual effect of these concepts on the Project may ultimately turn
out to be different than suggested above.
Head Grade
A review of the feasibility study metallurgical test work metal
balances has been completed by the Company and AMEC E&C
Services, Inc. of Reno, Nevada. This review determined that
the observed calculated head grades from the 250-300kg composite
samples of the five primary rock types of the Livengood deposit
processed by SGS Vancouver during 2012 and 2013 met or exceeded the
drill assay grades used to project the Project reserve grade by a
ratio of 1.00 to 1.43, depending on rock type, as shown in Table 2
below.
Table 2: Composite Sample Assay Based on ALS Drill
Core Assays vs. Calculated Head Grade
Sample
|
Percent
of Reserve
(see note 1)
|
ALS
Composite
Assay g/mt
|
SGS
Calculated
Head g/mt
|
SGS/ALS
Ratio
|
RT4 Optimization
Composite
|
14
|
0.74
|
0.94
|
1.27
|
RT5 Optimization
Composite
|
28
|
0.78
|
0.79
|
1.02
|
RT6 Optimization
Composite
|
18
|
0.79
|
0.85
|
1.08
|
GR(RT7UBL)
|
0
|
0.93
|
0.93
|
1.00
|
GR(RT7BL)
|
12
|
0.73
|
1.05
|
1.43
|
RT7 May 2013 Tailings
Test Composite
|
N/A
|
0.76
|
1.03
|
1.36
|
RT9 Optimization
Composite
|
25
|
0.97
|
1.03
|
1.06
|
Note 1 - based on
September 2013 Study
|
|
|
|
|
As described below in the 2015 work plan, further test work is
underway in an attempt to provide additional confirmation of this
analysis. While it is not certain that the results of this
work will be sufficient to justify a change in deposit resource
grade to be used for any future financial analysis, if the head
grades observed to date can be validated by further test work, it
will, at a minimum, provide confirmation that the Project resource
has been modelled conservatively. As an estimate of the
potential scope of this improvement, if the higher head grade as
represented by the SGS/ALS ratio was incorporated into the
financial model used in the September
2013 Study, it would result in an increase in the NPV5% @
$1500/oz. gold of $892M.
2015 Metallurgical, Field, and Engineering Work Plan
Due to the potential importance of the 2014 head grade
evaluation to the Project, a significant multi-phase metallurgical
test work program is already underway in an attempt to validate the
observed higher calculated head grades. For subsequent phases
of this program, bulk samples of several thousand kilograms of each
of the major rock types have been selected and are being prepared
for shipment. The objectives of the 2015 metallurgical test
program are to:
- Optimize the gravity circuit
- Optimize the grind size and power consumption
- Optimize the reagent consumption
- Optimize the leach retention time
- Confirm the overall recoveries by rock type
- Provide additional confirmation of the Project head
grades.
Review of the feasibility test work to date indicates that
there is a potential that further optimization of the parameters
noted above could result in CAPEX and OPEX reductions for the
Project. However, until this multi-phase metallurgical
program has been completed, there can be no assurance that the head
grade differences observed to date, or the potential process
optimizations and cost savings opportunities identified, will in
fact be realized.
Field work will be conducted in 2015 to advance the
environmental baseline and to evaluate alternatives for fresh water
supply with potential to reduce Project costs.
Once the test work and field work is completed and the process
costs are better defined, these costs will then serve as input to
an engineering phase that will evaluate and optimize the project
configuration and CAPEX and OPEX, including determining the optimum
scale for the Project, any of which may be different than that
assumed in the September 2013
Study.
About the Livengood Gold Project
For full details with respect to the assumptions underlying the
current reserve and resource estimates and feasibility economic
analysis for the Livengood Gold Project, see the technical report
entitled "Canadian National Instrument 43-101 Technical Report on
the Livengood Gold Project, Feasibility Study, Livengood,
Alaska," dated September 4, 2013, and available under the
Company's profile on SEDAR or on the Company's website.
Qualified Person
Chris Puchner (CPG 07048), a
Qualified Person as defined by National Instrument 43-101, has
reviewed and approved the technical information contained in this
news release and has approved the disclosure herein. Mr.
Puchner is not independent of ITH, as he is the Chief Geologist of
the Company and holds common shares and incentive stock
options.
About International Tower Hill Mines Ltd.
International Tower Hill Mines Ltd. controls 100% of the
Livengood Gold Project that contains 15.7M oz. of gold
(807 MT at 0.61 g/t) measured &
indicated and 4.4M oz. (266 MT at 0.52 g/t) inferred, all at a 0.30
g/t gold cutoff, located along the paved Elliott Highway, 70 miles
north of Fairbanks, Alaska.
On behalf of
International Tower Hill Mines Ltd.
(signed) Thomas E.
Irwin
Chief Executive Officer
Cautionary Note Regarding Forward-Looking
Statements
This press release contains forward-looking statements and
forward-looking information (collectively, "forward-looking
statements") within the meaning of applicable Canadian and US
securities legislation. All statements, other than statements
of historical fact, included herein, including statements with
respect to the ability of the Company to optimize and/or enhance
the base case as set out in the Feasibility Study for the Livengood
Project, including with respect to OPEX and CAPEX, the potential
changes to the Project NPV5% @ $1500/oz gold and the magnitude thereof (which
are given only as examples to illustrate the potential scope
thereof), including the potential for higher head grades, the
ability of the Company to potentially include the results of the
optimization process in a new or updated feasibility study or any
future financial analysis of the Project, the ability of the
Company to carry forward and incorporate into future engineering
studies of the Project the mine design, production schedule,
and recovery concepts described above, the potential for the
Company to carry out an engineering phase that will evaluate and
optimize the project configuration and CAPEX and OPEX, including
determining the optimum scale for the Project, the ability of the
Company to advance the Livengood Project, the potential for the
Company to make a construction decision, whether when warranted by
market conditions or at all, the potential for market conditions to
be such that they warrant the making of a production decision, the
potential development of any mine at Livengood, business and
financing plans and business trends are forward-looking
statements. Information concerning mineral reserve/resource
estimates and the economic analysis thereof contained in the
feasibility study also may be deemed to be forward-looking
statements in that it reflects a prediction of the mineralization
that would be encountered, and the results of mining it, if a
mineral deposit were developed and mined. Although the
Company believes that such statements are reasonable, it can give
no assurance that such expectations will prove to be correct.
Forward-looking statements are typically identified by words such
as: believe, expect, anticipate, intend, estimate, postulate,
proposed, planned, potential and similar expressions, or are those,
which, by their nature, refer to future events. The Company
cautions investors that any forward-looking statements by the
Company are not guarantees of future results or performance, and
that actual results may differ materially from those in forward
looking statements as a result of various factors, including, but
not limited to, variations in the nature, quality and quantity of
any mineral deposits that may be located, variations in the market
price of any mineral products the Company may produce or plan to
produce, the inability of the Company to obtain any necessary
permits, consents or authorizations required for its activities,
the inability of the Company to produce minerals from its
properties successfully or profitably, to continue its projected
growth, to raise the necessary capital or to be fully able to
implement its business strategies, and other risks and
uncertainties disclosed in the Company's Annual Information Form
filed with certain securities commissions in Canada and the Company's annual report on Form
10-K filed with the United States Securities and Exchange
Commission (the "SEC"), and other information released by the
Company and filed with the appropriate regulatory agencies.
All of the Company's Canadian public disclosure filings may be
accessed via www.sedar.com and its United
States public disclosure filings may be accessed via
www.sec.gov, and readers are urged to review these materials,
including the latest technical report filed with respect to the
Company's Livengood property.
Cautionary Note Regarding References to Resources and
Reserves
National Instrument 43 101 - Standards of Disclosure for
Mineral Projects ("NI 43-101") is a rule developed by the Canadian
Securities Administrators which establishes standards for all
public disclosure an issuer makes of scientific and technical
information concerning mineral projects. Unless otherwise
indicated, all resource and reserve estimates contained in or
incorporated by reference in this news release have been prepared
in accordance with NI 43-101 and the guidelines set out in the
Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM")
Standards on Mineral Resource and Mineral Reserves, adopted by the
CIM Council on November 27, 2010 (the
"CIM Standards") as they may be amended from time to time by
the CIM.
United States shareholders
are cautioned that the requirements and terminology of NI 43-101
and the CIM Standards differ significantly from the requirements
and terminology of the SEC set forth in the SEC's Industry Guide 7
("SEC Industry Guide 7"). Accordingly, the Company's disclosures
regarding mineralization may not be comparable to similar
information disclosed by companies subject to SEC Industry Guide
7. Without limiting the foregoing, while the terms "mineral
resources", "inferred mineral resources", "indicated mineral
resources" and "measured mineral resources" are recognized and
required by NI 43-101 and the CIM Standards, they are not
recognized by the SEC and are not permitted to be used in documents
filed with the SEC by companies subject to SEC Industry Guide
7.
Mineral resources which are not mineral reserves do not have
demonstrated economic viability, and investors are cautioned not to
assume that all or any part of a mineral resource will ever be
converted into reserves. The preliminary assessments on the
Livengood Project are preliminary in nature and include "inferred
mineral resources" that have a great amount of uncertainty as to
their existence, and are considered too speculative geologically to
have economic considerations applied to them that would enable them
to be categorized as mineral reserves. There is no certainty
that such inferred mineral resources at the Livengood Project will
ever be realized. Further, it cannot be assumed that all or any
part of the inferred resources will ever be upgraded to a higher
resource category. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of a feasibility study or
prefeasibility study, except in rare cases. Investors are cautioned
not to assume that all or any part of an inferred mineral resource
exists or is economically or legally mineable.
The SEC normally only permits issuers to report
mineralization that does not constitute SEC Industry Guide 7
compliant "reserves" as in-place tonnage and grade without
reference to unit amounts. The term "contained ounces" is not
permitted under the rules of SEC Industry Guide 7. In
addition, the NI 43-101 and CIM Standards definition of a "reserve"
differs from the definition in SEC Industry Guide 7. In SEC
Industry Guide 7, a mineral reserve is defined as a part of a
mineral deposit which could be economically and legally extracted
or produced at the time the mineral reserve determination is made,
and a "final" or "bankable" feasibility study is required to report
reserves, the three-year historical price is used in any reserve or
cash flow analysis of designated reserves and the primary
environmental analysis or report must be filed with the appropriate
governmental authority.
This news release is not, and is not to be construed in any
way as, an offer to buy or sell securities in the United States.
SOURCE INTERNATIONAL TOWER HILL
MINES LTD.