More gold for Rainy River at Richardson

Vancouver – The four drills that Rainy River Resources (RR-V) has turning on its Richardson township gold property in northern Ontario are returning robust results for the junior.

Two recent sets of results included positive news from infill work at the main ODM17 and 433 zones as well as expansion efforts to the north and south. The work looks certain to increase the confidence and tonnage when Rainy River updates the Richardson resource, which currently contains 2.2 million indicated ounces gold and 1.8 million inferred ounces gold.

The resource is centred on the 600-hectare Richardson caldera. Infill drilling of late mostly returned mineralized intercepts with grades and thickness typical of the open-pit resource but also included a few high-grade hits. Hole 380, for example, intercepted 15 metres of 1.04 grams gold per tonne, 4.5 metres of 0.76 gram gold, and 27.5 metres of 0.68 gram gold; all three hits came between 490 and 550 metres depth. Similarly, hole 383 returned six intercepts, including 12 metres of 2.62 grams gold and 27 metres of 1.17 grams gold between 560 and 620 metres depth.

The two high-grade hits came from holes 376 and 382. Hole 382 returned 46.5 metres grading 2.66 grams gold, starting 434 metres downhole and including 15 metres averaging 6.46 grams gold. And hole 376 cut 12 metres of 9.57 grams gold from 455 metres depth, including 3 metres of 36.9 grams gold.

Rainy River then drilled five holes testing the eastern and western limits of the ODM17 zone. The western expansion holes generally returned only marginal mineralization but three holes to the east extend the zone 100 metres. Hole 378 hit 22.5 metres grading 0.83 gram gold, hole 381 cut 15 metres grading 0.82 gram gold and hole 384 returned 16.5 metres of 0.76 gram gold. The intercepts all came between 285 and 370 metres depth.

And a single exploration hole testing the down-plunge extent of the recently discovered South zone returned 15.7 metres of 0.7 gram gold from 305 metres downhole.

In June Rainy River released results from a set of holes that tested the northern portion of the 433 zone, which constitutes the northern part of the conceptual open pit. The 433 zone is 400 metres north of and stratigraphically underneath ODM17 and in the last resource estimate it contributed roughly 10% of the deposit’s gold count.

In an attempt to increase that level the company punched 19 holes targeting mineralization above 400 metres depth, since the conceptual pit depth in the area is 350 metres. The deepest holes were the ones farthest to the south, which were actually on the ODM17 zone and thus crosscut the top of ODM17 before hitting 433.

All 19 holes returned significant gold intersections. Major intersections from the top of ODM17 include48 metres of 0.99 gram gold, 31.5 metres of 1.38 grams gold, 18 metres of 3.07 grams gold, and 60 metres of 2.25 grams gold. The average grade of these new intersections is considerably higher than the resource averages – 1.24 grams gold for the indicated resources and 0.88 gram gold for the inferred tonnes.

The drills also returned good results from the 433 zone, such as 21 metres of 2.55 grams gold, 51.7 metres of 1.93 grams gold, 16.5 metres of 1.31 grams gold, and 41.6 metres of 1.62 grams gold. Based on the results Rainy River says it will continue to drill this area aggressively.

The Richardson township project sits 80 km south of Kenora. Rainy River bought the project from Nuinsco Resources (NWI-T) in mid-2005 and has had three to four drill rigs turning on the property for the last three years.

According to a resource estimate from May, a conceptual open pit at Rainy River now encompasses 2.5 million oz. gold and 4.3 million oz. silver as indicated and inferred resources. Within the pit shell, the indicated resource divides into 55 million tonnes of volcanic-hosted mineralization grading 1.21 grams gold per tonne and 1.89 grams silver per tonne as well as just 57,000 tonnes of mafic-hosted mineralization averaging 1.37 grams gold. Inferred in-pit resources add 12.5 million tonnes grading 0.95 gram gold and 2.36 grams silver.

The estimate also found a significant resource that is still considered open-pittable but falls outside of the current pit design. Those inferred resources total 50.6 million tonnes grading 0.79 grams gold and 2.19 grams silver, for 1.3 million oz. gold and 3.6 million oz. silver. All open-pittable resources were calculated using a cut-off grade of 0.4 gram gold.

The mineralization at Rainy River continues at depth and so the report also calculated the project’s underground resource. Indicated underground resources total 530,000 tonnes grading 5.14 grams gold and 1.47 grams silver; the inferred underground count stands at 875,000 tonnes averaging 5.22 grams gold and 1.27 grams silver. Underground resource calculations used a 3-grams-gold cut-off grade.

And in June Rainy River welcomed a new president and CEO, as Nelson Baker retired from both positions. Raymond Threlkeld comes to Rainy River after leading Western Goldfields, which recently merged into New Gold (NGD-T), and working for Coeur D’Alene Mines (CDM-T) and Barrick Gold (ABX-T, ABX-N).

On news of the latest drill results Rainy River’s share price gained 10¢ to close at $2.30. The company has a 52-week trading range of 62¢ to $3 and has 57 million shares outstanding.