Rainy River Resources Ltd., ("Rainy River" or the "Company" (TSX
VENTURE: RR) is pleased to announce an updated mineral resource
statement for the Rainy River Gold Project ("RRGP") in Northwestern
Ontario. Mineral resources were estimated by SRK Consulting
(Canada) Inc. ("SRK") and are reported in accordance with Canadian
Securities Administrators National Instrument 43-101. The
consolidated mineral resource statement for the RRGP is tabulated
in Table 1. The reported resources were calculated at the same
elevation and the same cut-off grades as those reported in the
February 2011 resource estimate.
Highlights
-- Measured & Indicated resources of 4.4 million oz gold, 9.1 million oz
silver
-- Inferred resources of 2.3 million oz gold, 7.0 million oz silver
-- Open pit Measured & Indicated resources increase 28% for contained gold
and 38% for contained silver ounces
-- Underground Measured & Indicated resources increase 41% for gold and 43%
for silver
-- Increase in Measured & Indicated resources driven by a 25% increase in
tonnage and increases in grade of 3% and 10% in gold and silver,
respectively
Table 1. Consolidated Mineral Resource Statement(i), Rainy River
Gold Project
SRK Consulting (Canada) Inc., June 29, 2011.
In pit resources(ii) (above 450 m elevation)
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Tonnes Au Au Ag Ag
('000's) g/t ounces g/t ounces
----------------------------------------------------------------------------
Measured 15,660 1.26 635,641 1.93 972,751
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Indicated 99,927 1.08 3,480,907 2.48 7,967,183
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Measured & Indicated 115,587 1.11 4,116,548 2.41 8,939,934
----------------------------------------------------------------------------
Inferred 16,602 0.94 503,969 2.63 1,405,954
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Out of pit resources(ii) (above 450 m elevation)
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Tonnes Au Au Ag Ag
('000's) g/t ounces g/t ounces
----------------------------------------------------------------------------
Inferred 57,211 0.75 1,380,438 2.82 5,183,770
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Underground resources(ii) (below 450 m elevation)
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Tonnes Au Au Ag Ag
('000's) g/t ounces g/t ounces
----------------------------------------------------------------------------
Measured 100 4.74 15,212 2.67 8,568
----------------------------------------------------------------------------
Indicated 1,775 4.83 275,596 3.10 176,856
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Measured & Indicated 1,875 4.82 290,808 3.08 185,424
----------------------------------------------------------------------------
Inferred 3,628 3.82 445,389 3.84 447,870
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Combined resources: In pit, out of pit, underground(ii)
----------------------------------------------------------------------------
Tonnes Au Au Ag Ag
('000's) g/t ounces g/t ounces
----------------------------------------------------------------------------
Measured 15,760 1.28 650,853 1.94 981,319
----------------------------------------------------------------------------
Indicated 101,702 1.15 3,756,503 2.49 8,144,039
----------------------------------------------------------------------------
Measured & Indicated 117,462 1.17 4,407,356 2.42 9,125,358
----------------------------------------------------------------------------
Inferred 77,442 0.94 2,329,796 2.83 7,037,595
----------------------------------------------------------------------------
(i) Mineral resources are reported in relation to an elevation determined
from conceptual pit shells, and not all of the inferred resources lie within
the optimized pit shell. Mineral resources are not mineral reserves and do
not have demonstrated economic viability. All figures are rounded to reflect
the relative accuracy of the estimate. All assays have been capped where
appropriate.
(ii) Open pit mineral resources are reported at a cut-off of 0.35 g/t gold,
underground mineral resources are reported at 2.5 g/t gold. Optimized cut-
off grades are based on a gold price of US$1,100 per ounce, a silver price
of $22.50 per ounce and a foreign exchange rate of 1.10 Canadian dollars to
1 US dollar. Metallurgical recoveries include gold recovery of 88% for open
pit resources and 90% for underground resources with silver recovery at 75%.
Commentary
"The latest resource update incorporates 49 new holes that were
focused on testing new targets like the Western Area and 17 East
Extension as well as conducting infill within the open pit", noted
Raymond Threlkeld, President and CEO. "We have successfully added
0.99 million ounces of gold and 2.5 million ounces of silver to the
Measured & Indicated classes relative to the February 24, 2011
resource estimate. This represents a 28% increase in gold resources
and a 38% increase in silver resources in the M&I category, and
includes 17,000 metres (49 drill holes) from our 2011 drill
program. The infill program at Rainy River is well underway, with
10 rigs on site and an additional 153,000 metres of drilling
planned for the remainder of 2011. The Company will continue with
an aggressive program to delineate the RRGP ore body in preparation
for a feasibility study commencing later this year. Further infill
drilling in the remainder of 2011 is planned to convert and upgrade
resources in the pit, following a potential continuation of the
trend demonstrated with this incorporation of 49 drill holes. In
addition, we will focus on exploration of the 17 Deep and ODM
Zones, and on the Western Area." Mr. Threlkeld also noted, "The
more we drill at Rainy River, the better the quality of resources
we find, thus de-risking the project."
Sensitivity Analysis:
Block model quantities and grade estimates at Rainy River are
sensitive to the selection of cut-off grades. The sensitivity of
block model quantities for open pit and underground material to
gold cut-off grades is presented in Table 2 and Table 3 below.
Table 2. Block model quantities and grade estimates(i) at various cut off
grades - potential open pit mining material
----------------------------------------------------------------------------
Cut off grade Tonnes Au Ag Ag Ag
0.25 g/t Au ('000's) g/t ounces g/t ounces
----------------------------------------------------------------------------
Measured 19,835 1.06 675,384 1.77 1,131,018
----------------------------------------------------------------------------
Indicated 139,912 0.86 3,854,947 2.22 9,994,182
----------------------------------------------------------------------------
Measured & Indicated 159,747 0.88 4,530,331 2.17 11,125,200
----------------------------------------------------------------------------
Inferred (in-pit) 22,748 0.78 568,783 2.27 1,663,443
----------------------------------------------------------------------------
Inferred (ex-pit) 102,278 0.55 1,802,489 2.23 7,333,199
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cut off grade Tonnes Au Au Ag Ag
0.30 g/t Au ('000's) g/t ounces g/t ounces
----------------------------------------------------------------------------
Measured 17,506 1.16 654,870 1.86 1,048,679
----------------------------------------------------------------------------
Indicated 116,797 0.97 3,650,512 2.35 8,837,990
----------------------------------------------------------------------------
Measured & Indicated 134,303 1.00 4,305,382 2.29 9,886,669
----------------------------------------------------------------------------
Inferred (in-pit) 19,498 0.86 540,212 2.47 1,550,786
----------------------------------------------------------------------------
Inferred (ex-pit) 73,864 0.65 1,553,542 2.57 6,100,135
----------------------------------------------------------------------------
Table 3. Block model quantities and grade estimates(i) at various cut off
grades - potential underground mining material
----------------------------------------------------------------------------
Cut off grade Tonnes Au Au Ag Ag
3.0 g/t Au ('000's) g/t ounces g/t ounces
----------------------------------------------------------------------------
Measured 79 5.26 13,397 2.85 7,264
----------------------------------------------------------------------------
Indicated 1,321 5.55 235,679 3.32 141,148
----------------------------------------------------------------------------
Measured & Indicated 1,400 5.53 249,076 3.30 148,412
----------------------------------------------------------------------------
Inferred 2,458 4.32 341,253 4.55 359,897
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cut off grade Tonnes Au Au Ag Ag
3.5 g/t Au ('000's) g/t ounces g/t ounces
----------------------------------------------------------------------------
Measured 62 5.81 11,637 3.08 6,165
----------------------------------------------------------------------------
Indicated 1,007 6.27 202,966 3.56 115,148
----------------------------------------------------------------------------
Measured & Indicated 1,069 6.24 214,603 3.53 121,313
----------------------------------------------------------------------------
Inferred 1,561 4.94 248,065 5.49 275,362
----------------------------------------------------------------------------
(i) The reader is cautioned that the figures presented in Table 2 and Table
3 should not be misconstrued with the mineral resource statement presented
in Table 1. The figures are only shown to illustrate the sensitivities of
the block model quantities and grade estimates to the selection of cut-off
grade.
Technical Description
Gold mineralization at the Rainy River Gold Project has a
volcanogenic origin associated with minor amounts of silver, copper
and zinc. Sulphide zones are generally sub-parallel to foliation,
which strikes at approximately 300 degrees and dips 50 degrees to
70 degrees to the south. The estimated gold mineral resource is
based on data received up to February 27th, 2011 and includes 885
diamond drill holes totaling 397,069 metres. Since the previous
mineral resource estimate (see press release dated February 24th,
2011) the Company has drilled and added 49 new drill holes totaling
17,000 metres to the resource database.
Mineral resources are reported over an area measuring
approximately 2 kilometres x 1 kilometre to a depth of 700 metres.
Mineral resources have been estimated using a geostatistical block
model approach constrained by seven major zones sub-divided into 23
resource domains. Block size was set at cubes 5 metres in size.
These zones are termed the ODM/17, 433, HS, New, Cap, 34 and other
Zones. The bulk of the mineral resources occurs in the ODM/17 and
433 Zones. Metal grades were estimated using ordinary kriging as
the principal estimator. Metal grades were estimated separately in
each domain from capped composite data within that domain. Kriging
parameters were derived from variogram models with grade estimation
completed in two successive passes. The first estimation pass is
generally considered a search neighbourhood adjusted to full
variogram ranges. The size of the search ellipse was usually
doubled for the second estimation pass. Mineral resources are
classified as Measured, Indicated and Inferred, considering various
aspects including geological continuity, data quality, block
distance from the nearest informing composites, and variography
results.
A pit optimizer was used to determine the quantities of material
offering "reasonable prospects for economic extraction" by an open
pit. Results from the pit optimization are used solely for the
purpose of reporting mineral resources that have "reasonable
prospects for economic extraction" by an open pit and do not
represent a thorough economic study as is required to evaluate
mineral reserves. SRK considers that the material above the final
depth of the conceptual pit shell (450 metres vertical depth)
offers reasonable prospects for economic extraction from an open
pit, because ongoing drilling results suggest that the zone of gold
mineralization is broader than currently modeled and that new
drilling information should positively impact future pit
optimizations. Input assumptions used for the conceptual pit
optimization and to derive the cut-off grade of 0.35 g/t gold for
open pit mineral resources include:
-- Gold price; US$1,100/oz. Silver price; US$22.50/oz
-- 88% gold recovery, 75% silver recovery
-- Operating costs of $2.00/t mining, $7.25/t processing costs including
G&A
-- Process rate of 20,000 tpd combined open pit and underground feed
-- 48 degree average wall angle
The block model quantities and grade estimates below pit bottom
were also reviewed to determine the portions of the Rainy River
deposit having "reasonable prospects for economic extraction" from
an underground mine. Assumptions used to derive the cut-off grade
of 2.5 g/t gold for underground resources include:
-- Gold price; US$1,100/oz. Silver price; US$22.50/oz
-- 90% gold recovery, 75% silver recovery
-- Operating costs of $55/t mining, $7.25/t processing costs including G&A
-- Process rate of 20,000 tpd combined open pit and underground feed
Qualified persons
The mineral resource statement was prepared by Dorota El-Rassi,
P.Eng. (APEO #100012348) and Glen Cole, P.Geo (APGO #1416), of SRK,
both "independent qualified persons" as that term is defined in
National Instrument 43-101. SRK's Technical Report will be filed on
SEDAR within the prescribed 45 days following the date of issuance
of this news release.
Rainy River's exploration program in Richardson Township is
being supervised by Kerry Sparkes, P.Geo. (APEGBC #25261),
Vice-President Exploration and a Qualified Person as defined by
National Instrument 43-101. Garett Macdonald, P.Eng. (PEO
#90475344), is the person responsible for the content of this news
release. The Company continues to implement a rigorous QA/QC
program to ensure best practices in sampling and analysis of drill
core. All drill core is marked for sampling and then split in half
with a diamond saw blade. Samples are placed in sealed bags with
security tags. All samples were assayed using a standard fire
assay, 30 gram nominal sample weight with an AA finish. Over-limit
samples were re-assayed with a gravimetric finish. Samples with
visible gold were automatically analyzed for Ore Grade by 1000g
screen fire assay, with coarse and fine fractions being combined
proportionately and the fine fraction being assayed twice.
Certified Standards, blanks and duplicates are inserted every 25
metres. ALS Canada Ltd. performed primary assaying, with duplicates
being analyzed at Activation Laboratories Ltd. ALS Canada Ltd. and
Activation Laboratories Ltd. implements independent QA/QC protocols
that include the insertion of certified blanks and standards as
part of their routine analysis.
About Rainy River
Rainy River is a Canadian precious metals exploration company
whose key asset is the Rainy River Gold Project. With approximately
$120 million in cash and securities, the Company is well funded to
conduct a dual-focused drilling program consisting of: 1)
definition diamond drilling of the main gold resources in
preparation for scoping and prefeasibility studies, and 2)
selective diamond drill testing of high-priority gold targets
defined primarily by RC drilling within the large gold system
centred in Richardson Township. The Company's property is extremely
well located in the southwestern corner of Northern Ontario near
the U.S. border. It is accessed by a network of roads and is close
to hydro-electric infrastructure. The Rainy River district has a
skilled labour force and is one of the lowest-cost areas for
mineral exploration and development in Canada. The Company is also
working to advance the early-stage discoveries at its TPK Joint
Venture Property, also in Ontario, where it can earn a 51% interest
in the property from Northern Superior Resources. Ontario has low
political risk and, according to the annual Fraser Institute global
survey of the mining industry, has consistently ranked as one of
the top jurisdictions embracing mineral development.
RAINY RIVER RESOURCES LTD.
Raymond Threlkeld, President & CEO
This release includes certain statements that may be deemed to
be "forward-looking statements". All statements in this release,
other than statements of historical facts, that address events or
developments that management of the Company expects, are
forward-looking statements. Although management believes the
expectations expressed in such forward-looking statements are based
on reasonable assumptions, such statements are not guarantees of
future performance, and actual results or developments may differ
materially from those in the forward-looking statements. The
Company undertakes no obligation to update these forward-looking
statements if management's beliefs, estimates or opinions, or other
factors, should change. Factors that could cause actual results to
differ materially from those in forward-looking statements, include
market prices, exploration and development successes, continued
availability of capital and financing, and general economic, market
or business conditions. Please see the public filings of the
Company at www.sedar.com for further information.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Rainy River Resources Ltd. Indi Gopinathan Director of
Investor Relations 416-645-7289 igopinathan@rainyriverresources.com
www.rainyriverresources.com
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