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.
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Tonnes Au Au Ag Ag
Category '000s g/t ounces g/t ounces
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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
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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
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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
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(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
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Cut off
grade Tonnes Grade Grade Au Ag
Au g/t Category '000s Au g/t Ag g/t Ounces Ounces
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0.30 Measured 16,449 1.12 1.77 590,410 937,660
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Indicated 92,240 0.94 2.14 2,788,760 6,349,501
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Inferred 131,757 0.70 2.15 2,984,892 9,121,949
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0.35 Measured 14,707 1.21 1.84 572,272 869,332
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Indicated 77,934 1.05 2.24 2,639,850 5,615,597
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Inferred 104,591 0.80 2.31 2,702,754 7,781,272
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0.40 Measured 13,350 1.30 1.88 555,947 808,682
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Indicated 67,694 1.16 2.33 2,516,737 5,067,116
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Inferred 86,696 0.89 2.42 2,487,478 6,811,674
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Table 3: Block Model Quantities and Grade Estimates(i) at Various Cut-off
Grades - Potential Underground Mining Material
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Cut off
grade Tonnes Grade Grade Au Ag
Au g/t Category '000s Au g/t Ag g/t Ounces Ounces
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2.5 Measured 39 5.66 2.38 7,149 3,009
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Indicated 1,197 5.18 3.30 199,147 127,019
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Inferred 3,831 3.83 2.62 472,029 322,811
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3.0 Measured 31 6.41 2.58 6,484 2,609
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Indicated 833 6.25 3.67 167,235 98,295
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Inferred 2,835 4.21 2.86 384,153 260,276
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(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.
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