Rainy River pulls wide high-grade gold intercepts

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

Hole NR06-107 on the ODM zone returned a true-width 22.6-metre interval (from 198.5-metres downhole 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 the ODM as a distinctly separate mineralized zone to the 17 zone.

Previous step-out 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 occurs in the Archean-aged Rainy River greenstone belt situated within the Wabigoon Subprovince. It was discovered by Nuinsco Resources (NWI-T, NUIRF-O) in the mid-1990s while chasing down strong gold-in-till anomalies and subsequently led to a non-NI43-101 compliant inferred resource estimate of 11 million tonnes of 1.33 grams gold (about 471,000 contained ozs. of gold) in the 17 zone. Preliminary metallurgical work conducted by Nuinsco indicated gold recoveries of 93% using a fine grind, based on its free-milling attributes and amenability to leaching.

In addition to the gold zones (17, 433, Beaver Pond, West and ODM), the project also 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 increments), 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 extent of its new ODM zone. It also plans to allocate one rig to test the western extent of the 34 Nickel zone. The company expects to have a resource estimate on its 17 gold zone completed by year-end.

Shares of Rainy River rallied on the strong gold results, essentially doubling over a few days from the $2.20-level to the $4.40-level on a couple million shares of trading volume. The company posts a $188-million market capitalization based on its 43.2 million shares outstanding.