VANCOUVER, Feb. 1, 2017 /PRNewswire/ - International Tower
Hill Mines Ltd. (TSX: ITH, NYSE-MKT: THM) ("ITH" or the "Company")
announces that it has completed payment of the $14.7 million derivative land payment, approved a
$6.3 million 2017 work program to
advance the Livengood Gold Project (all $US), and commenced a
management transition plan with the appointment of Karl Hanneman as Chief Executive Officer.
Completion of Livengood Land Acquisition
On January 12, 2017, the Company
paid $14.7 million for the timely and
full satisfaction of the final derivative payment due with respect
to the acquisition of certain mining claims and related rights in
the vicinity of the Livengood Gold Project in Alaska (the "Project"). On January 17, 2017, the Full Deed of Reconveyance
releasing the Deed of Trust on the acquired property was recorded
and the Company is now in full ownership and has no further
liability with respect to this acquisition.
After closing the $22.0 million
private placement as previously announced on December 28, 2016 and payment of the final land
payment, the Company had uncommitted cash of $7.5 million as of January
20, 2017.
Approval of 2017 Livengood Work Program
On January 23, 2017, at the first
Board of Directors meeting after the election of Marcelo Kim as Board Chair, the Board approved a
2017 budget of $6.3 million.
The work program incorporated in this budget will seek to build
upon the Project improvements announced with the October 24, 2016 Pre-Feasibility Study (2016
PFS), focusing on improving the mineralization and alteration
models used to support the resource block model, evaluating
alternative block models for production schedule opportunities, and
completion of several phases of metallurgical work to better define
and optimize the flowsheet and recovery parameters. The 2017
work program has been specifically designed to target those aspects
of the project that could deliver the highest NPV increase for the
least expenditure. Preliminary work on the block model and
metallurgical recovery variability indicates a potential NPV
benefit of up to $280 million and
$100 million respectively (see
section below 2017 Work Program Details). The engineering
firm of BBA Inc. (BBA), who provided support for the 2016 PFS, will
be retained to continue work in the 2017 program. Work is
also planned to advance the environmental baseline efforts needed
to support future permitting.
However, the Company cautions that, until this multi-phase
metallurgical program and the updated block model are completed and
the results thereof are incorporated into a revised financial
model, there can be no assurance that the overall recovery
increases, potential process optimizations, or block model
improvements, will, in fact, be realized, or that any such
increases, optimizations or improvements will have the overall
effect suggested above.
Management Transition
On January 26, 2017, the Board
approved a management transition plan, effective January 31, 2017, in which Karl Hanneman, currently the Chief Operating
Officer (COO), will become the Chief Executive Officer (CEO),
managing both the CEO and COO responsibilities. Tom Irwin, the current CEO, will transition into
a part-time position of Senior Advisor prior to his standing for
election to the Board at the May 2017
Annual General Meeting (AGM).
Mr. Hanneman has more than 35 years of Alaska-based mining industry experience.
Prior to joining ITH as Livengood Project Manager in 2010, he
played a key role on the team at Teck that worked to successfully
resolve significant permitting issues at the Red Dog Mine and was
Alaska Regional Manager for Teck during the exploration,
development, and permitting of the Pogo Gold Mine by Teck/Sumitomo.
Mr. Hanneman has led or participated in a number of industry
and State of Alaska sponsored
organizations, including the Alaska Minerals Commission, Council of
Alaska Producers, Resource Development Council, and the Alaska
Miners Association. Mr. Hanneman serves as a director of
Usibelli Coal Mine, Inc., a private company with an operating coal
mine in Alaska, and Northrim
BanCorp, Inc., a public bank holding company engaged in commercial
banking in Alaska. Mr. Hanneman holds a B.S. (Honors) degree
in Mining Engineering from the University of
Alaska.
Tom Irwin, CEO, said "I am
pleased we have completed this important phase of the optimization
work and look forward to participating with the new CEO, the new
Board Chair and the Board as they progress the Project. ITH
has an exceptionally talented team and Karl is the right person to
lead the Company as we further advance the Livengood Gold
Project."
Karl Hanneman, COO, said "The
fundamentals of the Project are compelling: one of the largest gold
resources in North America that is
not owned by a major, an accessible location in a stable
jurisdiction, and a project that is highly leveraged to the gold
price. Tom's leadership has helped build a strong foundation
for progress and I am pleased to have been asked to lead the team
on the continued development of this exciting investment
opportunity."
Marcelo Kim, Chair of the Board
said, "On behalf of the Board of Directors, I would like to thank
Tom for all his great work and dedication in advancing the
Livengood Project and look forward to having him join the Board at
the 2017 AGM. The Board has unanimously backed Karl to be the
new leader of the Company and think that he is the best candidate
to lead this team as ITH embarks on a work program to continue
de-risking the Project down an eventual permitting path."
As part of its 2017 plans, the Company has been invited to the
BMO Capital Markets 26th Global Metals & Mining
Conference on February 26 - March 1,
2017 in Hollywood,
Florida. Marcelo Kim, Board
Chair, and Karl Hanneman, CEO, will
attend on behalf of the Company.
2017 Work Program Details
The 2017 work program will implement specific recommendations
presented in the 2016 PFS.
Specifically, with respect to improving the mineralization and
alteration model, metallurgical testwork to date has indicated that
gold recovery for rock type 7 (RT7), and perhaps rock type 9 (RT9),
is negatively impacted by the presence of antimony in the form of
quartz‑stibnite and jamesonite mineralization. The Project is
currently limited in its ability to model in three dimensions the
spatial distribution of this antimony mineralization, because only
50% of the Project drill intercepts were assayed for antimony.
As part of the work program, the stored pulps of all drill
intercepts in the 2016 PFS modeled pit will be assayed to allow
modeling and variance analysis to be completed that could
potentially improve the geologic model used to support the block
model and thereby potentially improve overall Project gold recovery
by the isolation of zones in the model with varying recoveries.
With respect to evaluating alternative block models, during 2016
BBA developed a grade-shell block model for ITH using LeapFrog
software and inverse distance squared interpolation. BBA
interpreted the geological data to support projection of
mineralization envelopes along the trend of the intrusive dike
mineralization, which dips approximately 20 degrees to the
south. Metal Mining Consultants Inc. was then retained to use
this preliminary grade-shell block model to produce a production
schedule, which, when imported into the ITH financial model used
for the 2013 feasibility study (2013 FS), resulted in an
approximately $280 million dollar NPV
improvement (NPV@5% and $1500)
compared to the Multiple Indicator Kriging (MIK) block model that
was actually used in the 2013 FS. However, there was
insufficient time available to validate the grade-shell model and
integrate it into the mine planning, production schedule, and
financial analysis for the 2016 PFS prior to releasing the results
of the 2016 PFS. Completion of a geostatistical analysis to
potentially cap grades and quantitatively evaluate the model
projections against the drill intercepts is work that still must be
completed in the 2017 program before the grade-shell model could be
relied upon and used to update the 2016 PFS. While there can
be no certainty that the final model would result in any
improvement to the results of the 2016 PFS, the preliminary work to
date demonstrates the sensitivity of the Project to the modelled
head grade and strip ratio and justifies additional effort to
attempt to improve and validate an updated resource model.
Work in connection with the 2016 PFS has indicated that the
Project economics are sensitive to recovery, grind size, reagent
consumption and test conditions (oxygen, pH, lead nitrate).
The metallurgical work included in the 2017 program will
complete additional testwork on the 100 kg of each of 5 rock types
remaining from the PFS Phase 9 composites in order to allow better
optimization of these critical variables. Metallurgical
results reported in the 2016 PFS show a range of recovery for
certain rock types that can vary up or down by more than 5% from
the values used in the 2016 PFS, depending upon rock type, sample
and test conditions. To illustrate the potential sensitivity
of improved (or decreased) recovery, ITH estimates that, if the
metallurgical work, in combination with the improved resource
model, was able to demonstrate an overall recovery improvement of
5% for RT7 and RT9, it would result in an improvement of
approximately $100 million (NPV@5%
and $1,250) as compared to the 2016
PFS. A decrease in overall recovery of 5% would have an
equivalent negative effect.
However, the Company cautions that, until this multi-phase
metallurgical program and the updated block model are completed and
the results thereof are incorporated into a revised financial
model, there can be no assurance that the overall recovery
increases, potential process optimizations, or block model
improvements, will, in fact, be realized, or that any such
increases, optimizations or improvements will have the overall
effect suggested above.
About the Livengood Gold Project
For full details with respect to the assumptions underlying the
current reserve and resource estimates and pre-feasibility study
economic analysis for the Livengood Gold Project (2016 PFS), please
see the technical report entitled "Canadian National Instrument
43-101 Technical Report on the Livengood Gold Project,
Pre-Feasibility Study, Livengood, Alaska", dated October
24, 2016, 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 options.
About International Tower Hill Mines Ltd.
International Tower Hill Mines Ltd. controls a 100% interest in
the Livengood Gold Project, located along the paved Elliott
Highway, 70 miles north of Fairbanks,
Alaska.
On behalf of
International Tower Hill Mines Ltd.
(signed) Karl
Hanneman
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 proposed use of the proceeds of the December 2016 private placement by the Company,
the ability of the Company to carry out and complete optimization
studies with respect to the Livengood Gold Project, the potential
for the results of the 2017 work program to have a positive effect
on the 2016 PFS economics, and the magnitude of the anticipated
effects, the ability of the Company to advance the Livengood Gold
Project, the potential development of any mine at Livengood,
business and financing plans and business trends are
forward-looking statements. 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, risks associated with the outcome of the expected
remedial de-listing review by the TSX, the use of proceeds from the
December 2016 private placement, the
potential inability of the Company 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 report on
Form 10-K and other reports filed with the United States Securities
and Exchange Commission (the "SEC"), and certain securities
commissions in Canada 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 Gold Project.
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 or Canada.
SOURCE International Tower Hill Mines Ltd.