An updated resource estimate based on 394 new core holes from 170,000 metres of drilling in 2011 — bringing the total to 1,279 drill holes, or 578,000 metres — has lifted the spirits and shares of Rainy River Resources (RR-T, RR-V).
The Rainy River gold project in northwestern Ontario has combined open-pit and underground measured and indicated resources of 5.72 million oz. gold — a 30% increase over the June 2011 estimate — and 12.01 million oz. silver for a 32% increase, driven by a 28% increase in tonnage. Inferred resources measure 2.25 million oz. gold and 6.77 million oz. silver.
Open-pit measured and indicated resources at a 0.35-gram-gold-per-tonne cut-off grade stand at 136 million tonnes grading 1.12 grams gold per tonne for 4.92 million contained oz. gold and 2.33 grams silver per tonne for 10.16 million contained oz. silver.
Inferred resources add 22.7 million tonnes grading 0.93 gram gold per tonne for 675,000 oz. gold and 2.18 grams silver per tonne, for 1.59 million oz. silver.
The underground portion of the gold project has expanded to 3.45 million tonnes grading 4.53 grams gold for 501,000 contained oz. gold in the measured and indicated category, and 5.48 grams silver for 607,000 oz. silver. Inferred resources add 1.38 million tonnes of 4.14 grams gold for 183,000 oz. gold and 7.03 grams silver for 311,000 oz. silver. The underground resource is based on a cut-off grade of 2.5 grams gold per tonne.
The company is looking to drill 150,000 metres this year with 12 diamond drill rigs.
Drilling will comprise the completing of an infill program in the open-pit and underground areas, condemnation drilling for site facilities and regional exploration along a prospective, 6-km trend.
Rainy River hopes to have the next resource update by mid-year, ahead of its feasibility study. The new resource estimate will include drill information from the first few months of 2012.
Gold mineralization at the Rainy River project originates in volcanogenics associated with minor amounts of copper, lead, zinc and silver. Sulphide zones are generally sub-parallel to foliation, which strikes at 300 degrees and dips 50 degrees to 70 degrees to the south. These zones contain low-grade gold mineralization.
Higher-grade gold mineralization is associated with shear zones that trend 20 degrees to 30 degrees to the main foliation and plunge steeply to the south.
The advanced-stage project hosts three types of sulphide mineralization: gold-rich polymetallic sulphides, subordinate silver-rich polymetallic sulphides and copper-nickel-platinum group element sulphides.
Rainy River fully acquired the project from Nuinsco Resources (NWI-T) in 2005. The property is 65 km northwest of Fort Frances, 162 km south of Kenora and 418 km west of Thunder Bay. It has year-round road access, a railway 12 km south and power lines close by.
The company has $100 million in its treasury.
At presstime Rainy River shares traded at $7.85 within a 52-week range of $5.66–$12.75. The junior has 84 million shares outstanding.
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