Imperial Gains On High-Grade Hit At Red Chris

VANCOUVER — A hot hole from below the planned pit at Red Chris, carrying 4.1% copper and 8.8 grams gold per tonne over 152 metres, sent Imperial Metals’ (III-T, IPMLF-O) share price rocketing up 46% in a day.

Imperial is working through an eight-hole program at Red Chris testing for deep mineralization. The latest results are from hole 350, which is the most easterly hole of the current program. It probed an area where mineralization at open-pittable depths is weak.

Only partial assay results are available, as drillers are still working the hole down to its target depth of 1,500 metres. The upper 220 metres of the hole returned consistent, low-grade mineralizaterest averaging 0.17% copper and 0.12 gram gold, which explains why the area had not previously been tested to depth.

Starting at 390 metres depth, the drill hit significantly better grades, returning 325 metres grading 2.24% copper and 4.52 grams gold. Included in that interval is a 152.5-metre segment of 4.12% copper and 8.83 grams gold. Imperial says that, of the 62 assay intervals in the 152.5-metre run, only six returned less than 2% copper and only four returned less than 4 grams gold.

The strong gold-to-copper ratio is consistent with other drill results from the eastern side of the deep zone, but hole 350 pulled the highest-grade intercept over an interval of that scale from the Red Chris property to date. Copper mineralization is hostedinan intensely quartz-f looded, veined, and stock-worked portion of the Red stock, the local host rock. Interestingly, the copper-hosting mineralogy over the 152-metre interval is almost exclusively chalcopyrite, with only minor bornite. In contrast, most high-grade copper-gold intervals from the western portion of the deep East zone host significant, and sometimes dominant, bornite.

Imperial also released partial assay results from hole 349, which was collared 110 metres northeast of hole 350. Hole 349 cut 537.5 metres grading 0.86% copper and 0.99 gram gold, starting 390 metres down-hole. Similar to hole 350, hole 349 was collared within the boundaries of the proposed open pit but the upper 243 metres of core did not encounter significant mineralization.

In early November, Imperial released results from the two previous deep holes at Red Chris. Both were drilled to more than 1,300 metres depth and returned long mineralized intervals.

Hole 348 was collared 200 metres southwest of hole 350, almost in the middle of the eastern side of the planned pit. It returned 1,265 metres averaging 0.62% copper and 0.82 gram gold, starting 42 metres below surface. The upper 303 metres of the core are within the pit but are weakly mineralized, while the 255-metre interval starting at 302 metres depth returned 0.87% copper and 0.84 gram gold. And the 244 metres of core starting 725 metres down-hole held the best grades, averaging 1.21% copper and 2.41 grams gold.

Hole 347 was situated roughly 100 metres south and returned 1,132.5 metres of 0.39% copper and 0.46 gram gold, starting at 108 metres depth. Again, the portion of the core nearer to surface was only weakly mineralized but a deeper portion, starting at 290 metres, returned 700 metres of 0.47% copper and 0.59 gram gold.

Imperial is close to completing all eight planned holes of its first deep drilling program. The company says it is working on a geological model to explain the various characteristics of the deposit at depth. In early 2010, it will start a second phase of deep drilling, based on that model. Winter work at Red Chris is now possible, as Imperial spent some $3 million in 2008 building an access road into the project.

A 2005 feasibility study of Red Chris estimated proven and probable reserves of 276 million tonnes grading 0.349% copper and 0.266 gram gold. The reserves would support a 30,000-tonne-per- day operation for 25 years. The planned pit is some 1.8 km long and up to 1 km wide, covering two zones known as the Main and East zones.

The study assumed access to grid power, an assumption that came much closer to being a reality in September, when the B. C. and federal governments announced concrete plans to build the Northwest Transmission Line along Highway 37 to Bob Quinn Lake. Red Chris sits another 120 km north along Highway 37 from Bob Quinn Lake.

The final obstacle in Imperial’s path at Red Chris is a continuing legal battle over the validity of the project’s federal environmental assessment, which was conducted by way of a screening report. Environmental groups challenged the federal government’s authority to decide that a project can be approved through a screening rather than a full review, even though the provincial authorities conducted both a full-scale review and the public consultation process.

The case was recently heard in the Supreme Court. A decision is expected in early 2010.

On news of the high-grade results from hole 350, Imperial shares gained $2.77 to close at $8.85, setting a new 52-week high. In the depths of the financial crisis the company’s stock dropped as low as 93¢, from a high of over $18 in late 2007. Imperial has 32 million shares outstanding, 36 million fully diluted.