Tower Hill Raises $10M, Doubles Livengood Drill Program

VANCOUVER — A March financing brought in twice as much as it expected, so International Tower Hill Mines (ITH-V, THM-X) has doubled the size of its drill program at the Livengood gold project in Alaska. And recent drill results continue to show that the project deserves the redoubled effort.

Two holes punched into the northeastern portion of the Core zone returned promising intercepts as did two drilled at the southern end of the high-grade zone.

Hole 112, one of the holes northeast of the Core zone, returned 1.11 grams gold per tonne over 100 metres from 256 metres down-hole, after an intercept closer to surface returned 0.97 gram gold over 17 metres. From 100 metres east, hole 111 returned 0.59 gram gold over 68 metres.

The company called the intercepts in hole 112 “critical” as they confirm the presence of a second, lower fault thrust that duplicates what has been the favourable rock section. In addition, the bottom of the hole showed strong alteration and gold mineralization, indicating there may be another higher-grade centre similar to the Core zone developing in this area.

Tower Hill also released results from two holes in the southern portion of the Core zone. Hole 109 cut 18.3 metres grading 0.92 gram gold from just 9 metres below surface, followed by 3 metres of 1.28 grams gold from 107 metres, 4.6 metres of 0.9 gram gold from 139 metres, and 38.1 metres of 1.23 grams gold from 165 metres. And hole 110 returned 205.7 metres averaging 1.43 grams gold, starting 149 metres down-hole and including 38 metres at 3.08 grams gold.

Both holes ended in significant mineralization, indicating that the deposit is open at depth. In fact, many of the holes completed in the second half of 2008 also ended in mineralization.

On the heels of these latest results, Tower Hill says drilling over the next month will focus on the northeast and south zones, which it calls the “two largest and most prospective” targets areas at present. The company started its winter drill program in early February and, with a second drill recently added, plans to drill 10,000 metres before spring.

Initially, Tower Hill had only planned to drill 6,000 metres in the winter program. But when the company got a better-than-expected response to its private-placement offering, plans changed. Tower Hill originally announced a $5-million financing, comprised of 2 million shares at $2.50 apiece. But the offering included an overallotment option of equal size.

Not only did the overallotment sell, Tower Hill added another 200,000 shares to the bonus component and those all sold as well. In the end, the company sold 4.2 million shares and walked away with $10.5 million. With its coffers full, Tower Hill now plans to drill a total of 40,000 metres at Livengood this year, up from a planned 16,000 before the financing closed.

There are currently two drills turning at Livengood; when the winter program is complete, the company plans to update the resource estimate again, for use in preparing a preliminary economic assessment. In the summer, Tower Hill will use three rigs to drill another 30,000 metres.

Tower Hill announced a new resource estimate for Livengood in late January, following its 2008 definition-drilling campaign.

Indicated resources now stand at 128.6 million tonnes grading 0.83 gram gold; inferred resources add 142.1 million tonnes at 0.74 gram gold. On its own, the higher-grade Core area hosts 68.8 million indicated tonnes at 1.03 grams gold plus 65.2 million inferred tonnes at 0.93 gram gold.

The thick, shallowly dipping gold deposit at Livengood outcrops at one end and looks amenable to open-pit mining. And Tower Hill’s initial metallurgical test work shows the deposit is amenable to heap-leach gold recovery, but milling might improve recoveries, an idea now being tested.

Livengood is favourably located, sitting 110 km by road north of Fairbanks along the paved Elliot Highway and the Trans-Alaska pipeline corridor. It is also 55 km north of the Alaska state power grid, along the proposed Alaskan natural gas pipeline route. Tower Hill owns the 44-sq.-km Livengood land package outright.

Tower Hill shares recently traded at $3.20 apiece. The company has a 52-week trading range of $1.07-3.30 and has 44.3 million shares outstanding.