Rainy River pulls high-grade gold

Vancouver — Rainy River Resources (RR-V, RRFFF-O) has announced a number of high-grade drill intercepts from its namesake gold project located about 80 km south of Kenora, in northwestern Ontario.

Hole NR06-107, in the ODM zone, returned a true-width 22.6-metre interval (from 198.5 metres down-hole depth) grading 17 grams gold per tonne (uncut). Visible gold was noted in association with pyrite, sphalerite, galena and minor chalcopyrite mineralization. Based on the widespread visible gold, Rainy River considers ODM a distinct and separate mineralized zone from the 17 zone.

Previous stepout hole NR06-106, collared about 60 metres southeast of hole 107 and between the 17 and Beaver Pond zones, cut a 43-metre section (from 248 metres depth) averaging 5.4 grams gold (uncut) including a 9.5-metre interval of 17.7 grams gold.

The project is in the Archean-aged Rainy River greenstone belt, situated within the Wabigoon Subprovince. It was discovered in the mid-1990s by Nuinsco Resources (NWI-T, NUIRF-O) while the company was chasing down strong gold-in-till anomalies. A subsequent inferred resource estimate (not compliant with National Instrument 43-101) was calculated at 11 million tonnes of 1.33 grams gold (about 471,000 contained ounces gold) in the 17 zone. Preliminary metallurgical work conducted by Nuinsco indicated gold recoveries of 93% using a fine grind, based on the samples’ free-milling attributes and amenability to leaching.

In addition to the gold zones (17, 433, Beaver Pond, West and ODM), the project contains an area of base metal mineralization. The 34 zone, east of the 17 gold zone, was drill-tested by Nuinsco in 1995 returning intercepts of massive and net-textured nickel, copper, platinum group metals, gold, silver and cobalt-bearing sulphides in a mafic-ultramafic host rock.

Rainy River acquired the project from Nuinsco in mid-2005 for a cash payment of $2.5 million ($750,000 initially paid and $1.75 million payable on seven quarterly installments), issuance of 2,197,380 Rainy River shares and a quarterly royalty of $1 per tonne of ore produced. An additional payment of $2.5 million is also due on commercial production or ore shipments.

With three drill rigs on the project, Rainy River is focusing on tracing the extension of its new ODM zone. It also plans to allocate one rig to test the western extension of the 34 nickel zone. The company expects to have a new resource estimate on its 17 gold zone completed by year-end.

Shares of Rainy River rallied on the strong gold results, essentially doubling over the course of a few days from around $2.20 to $4.39 on over two million shares of volume. The company posts a $188-million market capitalization based on its 43.2 million shares outstanding.