Int'l Tower Hill increases Core zone by 20%
ITH news:
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2009-06-25 10:36 ET - News Release
Mr. Jeffrey Pontius reports
INTERNATIONAL TOWER HILL ANNOUNCES RESOURCE UPDATE AT LIVENGOOD, ALASKA
International Tower Hill Mines Ltd.'s results of its independently prepared 2009 winter program mineral resource update estimate for the Money Knob deposit at its Livengood gold project near Fairbanks, Alaska. The independent study incorporates all the drilling in the 2009 winter program plus the previous drilling for an overall total of 189 diamond and reverse circulation holes. This new resource estimate will form the basis for the company's initial preliminary economic assessment which is scheduled to be completed July, 2009.
The new resource estimate shows the expansion of the higher grade Core zone of the deposit with a 20-per-cent increase in total ounces at the 0.7 g/t cut-off. The Core zone area has an estimated indicated gold resource of 84.9 million tonnes at an average grade of 1.06 grams per tonne gold (2.88 million ounces) and an estimated inferred gold resource of 68.8 million tonnes at an average grade of 0.99 g/t gold (2.2 million ounces), based on a cut-off grade of 0.70 g/t gold.
At a 0.3 g/t gold cut-off, the average grade of the overall deposit has increased by approximately 8 per cent as most of the winter drilling was targeted on the higher grade Core zone.
At a 0.5 g/t cut-off, the average grade of the overall deposit has increased by 5.4 per cent.
Mineralization remains open for expansion in all directions.
Four drills (three reverse circulation and one core) are current operating on the summer drilling program of 45,000 metres and the next resource update is anticipated for October, 2009.
The current drilling at Livengood only covers approximately three square kilometres of the Main gold target, which is approximately 12 square kilometres in area.
Continuing metallurgical studies focusing on the potential milling of Livengood mineralization indicate that portions of the mineralization have an unusually high gravity concentration component, with an average of 77 per cent of the gold reporting to just 15 per cent of the material. Cyanide extraction tests also indicate that the mineralization would be amenable to heap leach treatment of low-grade material.
The geometry of the currently defined shallowly dipping, outcropping ore zone suggests a low strip, open pit mining potential that could support a high production rate and economies of scale.
The drilling incorporated into the new resource estimate was primarily from two areas of permafrost that are best accessed in the winter months and added an average of over 20,000 ounces of gold per hole to the resource. The generally higher grade intervals in the Southwest target area raised the overall grade of the resource by approximately 5.4 per cent. The summer 2009 drilling program began on June 1 and, to date, has completed 25 holes of the 120 holes planned (assays pending). A 3-D image of the most recently released Livengood drill information can be viewed at the company's website.
Jeff Pontius, president and chief executive officer of ITH, stated: "This most recent resource expansion has now placed the Livengood project into a small and unique group of 100-per-cent-owned junior deposits, with the potential to support a very large production profile. The increase in overall grade by 5.4 per cent and the higher confidence level of the resource will have a significant impact on the current economic modelling. The overall size and configuration of the deposit and its favourable gold recovery characteristics continue to support the project's potential for large-scale, low-cost production with a significant starter pit component."
Livengood project highlights
The company wishes to emphasize that the Livengood project has a very favourable logistical location, being situated 110 road kilometres north of Fairbanks, Alaska, along the paved all-weather Elliot Highway and the Trans Alaska pipeline corridor and approximately 55 kilometres north of the Alaska State power grid and along the proposed Alaska natural gas pipeline route.
As a comparison, the Fort Knox mine, one of North America's larger gold mines and located 80 kilometres to the southeast of Livengood, reported in its March 30, 2007, 43-101 technical report, a proven and probable resource estimate of 159 million tonnes at an average grade of 0.53 g/t gold (the current Livengood resource significantly exceeds Fort Knox at this time). The Fort Knox mine has announced that it is currently commissioning a large run of mine heap leach facility to augment its current milling operations, and estimates an average heap leach recovery of 61 per cent. The Fort Knox mine reported 2007 gold production of 338,459 ounces at a life of mine cash cost of approximately $390 (U.S.) per ounce. However, the company cautions that this information with respect to the Fort Knox property and operations could not be verified by the company and is not necessarily indicative of the mineralization on the Livengood property or the potential production from, or cost of, any future mining of the Livengood property.
Project background
ITH controls 100 per cent of its 44-square-kilometre Livengood land package, which is primarily made up of fee land leased from the Alaska Mental Health Trust and a number of smaller private mineral leases. The company and its predecessor, AngloGold Ashanti (U.S.A.) Exploration Inc., have been exploring the Livengood area since 2003, with the project's first indicated resource estimate being announced in early 2008. The 2009 drilling program is part of a series of drill initiatives marking the first grid drilling resource definition campaign for the project and is only the initial step in what the company envisions as a major exploration program to define what it anticipates is one of the world's larger new gold deposits.
Updated resource estimate
On June 24 2009, Barnes Engineering Services, Inc. delivered the updated mineral resource estimate which will be incorporated into the forthcoming report on the preliminary economic viability of the Livengood project. The updated resource estimate was prepared as at May 30, 2009, in accordance with the requirements of NI 43-101 and incorporates the data for all drilling through the end of May, 2009.
The May, 2009, indicated and inferred mineral resource estimate for the Livengood deposit covers an area of approximately 2.6 square kilometres and is based on 189 drill holes which have an average length of 252 metres and 11 trenches with an average length of 38 metres. Approximately one-half of the total estimated area (1.6 square kilometres) contains 177 of the drill holes and, in this area, the geology has been modelled to represent the volumes of the different stratigraphic units on the property. Outside of the modelled area no identifiable stratigraphy has been recognized and, consequently, it has been modelled as a homogeneous mass. Statistically, each of the geological volumes was treated independently with individual kriging parameters developed.
The resource model for the deposit was developed using multiple indicator kriging techniques. Indicator variogram modelling was done on 10-metre composites. The resource model and the variograms were heavily constrained by the lithological model developed by the company. Statistical analysis showed this to be a reasonable and prudent approach to modelling. Spatial statistics indicate that the mineralization shows very reasonable continuity within the range of anticipated operational cut-offs. Bulk density was estimated on the basis of individual density measurements made on core samples and reverse circulation drill chips from each stratigraphic unit. In total, 95 measurements were used. An average density of 2.72 was used for the entire modelled volume, as the variability between units was small. The resource model, with blocks 15 by 15 by 10 metres, was estimated using nine indicator thresholds. A change-of-support correction was imposed on the model assuming five- by five- by 10-metre selectable mining units.
The geology of the holes around the margins of the currently drilled area indicates that the favourable host stratigraphy and alteration remain open laterally and at depth, thus indicating that the system could potentially be much larger than the current estimate.
A detailed description of the updated resource estimate and other pertinent geological information related to the Livengood project will be included in an NI 43-101-compliant preliminary economic assessment technical report being prepared for the company by Mineral Resource Services Inc., Barnes Engineering Services, Inc. and Pennstrom Consulting Inc., which will be filed on SEDAR within 45 days of this news release.
Qualified person and quality control/quality assurance
The work program at Livengood was designed and is supervised by Dr. Russell Myers, vice-president of exploration, and Chris Puchner, chief geologist (CPG 07048), for ITH who are responsible for all aspects of the work, including the quality control/quality assurance program. On-site personnel at the project log and track all samples prior to sealing and shipping to ALS Chemex for assay. ALS Chemex's quality system complies with the requirements for the International Standards ISO 9001:2000 and ISO 17025:1999. Analytical accuracy and precision are monitored by the analysis of reagent blanks, reference material and replicate samples. Quality control is further assured by the use of international and in-house standards. Finally, representative blind duplicate samples are forwarded to ALS Chemex and an ISO-compliant third party laboratory for additional quality control.
Tracy Edward Barnes, PE, of Barnes Engineering Services, Inc., a consulting mining engineer, is a professional engineer in the state of Colorado, U.S. (No. 33381), and as such is acting as the qualified person, as defined in NI 43-101, for the resource modelling for the Livengood deposit. Mr. Barnes has a BS degree in mining engineering and more than 34 years of relevant mining engineering experience in operating, corporate and consulting environments. Mr. Barnes is also a SME founding registered member. Both Mr. Barnes and Barnes Engineering Services, Inc. are independent of the company under NI 43-101.
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