The Rainy River Gold Project (“Rainy” or the “Project”) is an advanced stage gold exploration project situated in the southern half of Richardson Township, approximately sixty-five kilometres northwest of Fort Frances in Western Ontario.
Today, the Rainy River Gold Project is defining an emerging Canadian Gold District, hosting NI 43-101 compliant gold reserves of 4 million ounces as of April 10, 2013.
The location of the Rainy River Project is excellent. The Property is centred in Richardson Township in ‘mining friendly’ northwestern Ontario, approximately 162 kilometres south of Kenora and 418 kilometres west of Thunder Bay. The property has tremendous infrastructure, with year-round road access and powerlines in close proximity, as well as a railway located 21 kilometres to the south of the property. The picturesque town of Fort Frances has a population of approximately 10,000 people from which a workforce could be sourced for the potential future mine, thereby eliminating the need to establish a camp at site.
History and Geology
The Rainy River Gold Project has attracted exploration interest since 1967; however, deep cover hampered exploration efforts and thus limited interest in the area.
Between 1994 and 1998 Nuinsco Resources Limited drilled a series of widely spaced reverse circulation drill holes, defining a fifteen kilometre long “gold-grains-in-till” dispersal train emanating from a thickly overburden-covered, six square kilometre “gold-in-bedrock” anomaly. Following up with diamond drill programs, Nuinsco made the initial 17 Zone discovery in 1994. In June 2005, Rainy River Resources Limited acquired a 100% interest in the project from Nuinsco Resources Limited.
Regional and Local Geology
The Rainy River Gold Project falls within the 2.7 billion year Rainy River Greenstone Belt that forms part of the Wabigoon Subprovince. The Wabigoon Subprovince is a 900 kilometre long east-west trending area of komaiitic to calc-alkaline metavolcanics that are in turn succeeded by clastics and chemical sediments. Granitoid batholiths have intruded into these rocks, forming synformal structures in the supracrustals that often have shear zones along their axial planes.
The Wabigoon Subprovince basement lithologies were overlain by Mesozoic (Jurassic and Cretaceous) sediments and were subjected to deep lateritic weathering followed by Quaternary glaciation. Limited preservation of the Mesozoic cover sediments and saprolite occurs in localized palaeo-lows.
The Wabigoon basement rocks and remnant Mesozoic cover sediments are overlain by Labradorian till of northeastern provenance. This till has been found to contain anomalous concentrations of gold grains, auriferous pyrite and copper-zinc sulphides. It is overlain by a glaciolacustrine clay and silt horizon and by argillaceous and calcareous Keewatin till of western provenance.
The Rainy River Gold Project is primarily underlain by a series of tholeiitic mafic rocks that are structurally overlain by calc-alkalic intermediate to felsic metavolcanic rocks. Intermediate rocks (dacites) host most of the gold mineralization. At a regional scale, the strongest and earliest deformation event produced a well-defined penetrative fabric. This foliation is approximately parallel to the trend of the metavolcanic rocks that strike at approximately 120 degrees and dip fifty to seventy degrees to the south. Structural geology studies by SRK suggest that the current geometry and plunge of the gold mineralization is the result of high strain deforming features associated with gold mineralization and rotating the mineralization plunge parallel to the stretching direction.
Deposit Types and Mineralization
At least two stages of gold mineralization exist in the Rainy River Gold Project:
- Early (low to moderate grade) gold mineralization associated with sulphide (pyrite-sphaleritechalcopyrite-galena) stringers and veins and disseminated pyrite in quartz-phyric volcaniclastic rocks and conglomerate; and Late (high-grade) gold mineralization associated with quartz-pyrite-chalcopyrite-gold veins and veinlets.
- Both styles of gold mineralization have been progressively overprinted by deformation, The gold mineralization is interpreted as a hybrid deposit type consisting of an early gold-rich volcanogenic sulphide mineralization overprinted by shear-hosted mesothermal gold mineralization.
- In addition to the gold mineralization, the project also contains nickel, copper and platinum group metals sulphide mineralization associated with a differentiated ultramafic-mafic intrusion. That magmatic-hydrothermal mineralization occurs within the main auriferous zones and crosscuts the volcanogenic sulphide mineralization and the later mesothermal gold mineralization associated with the regional deformation.
Rainy River Resources Completes Feasibility Study: Establishes Intermediate Production Profile with 4.0 Million Ounces of Gold in Proven and Probable Reserves
Apr 10, 2013
TORONTO, April 10, 2013 /CNW/ - Rainy River Resources Ltd. ("Rainy River" or the "Company" (RR.TSX)) is pleased to announce receipt of a positive Feasibility Study ("FS") for its 100% owned Rainy River Gold Project ("RRGP") in northwestern Ontario, Canada. The information presented below summarizes the results of the FS for a mine and processing scenario based on the October 10, 2012 National Instrument 43-101 ("NI 43-101") mineral resource estimate, which includes assay data up to June 10, 2012. All currency amounts herein are expressed in Canadian dollars ($) unless otherwise noted. This feasibility study was prepared and compiled by BBA Inc. ("BBA") for Rainy River in cooperation with a number of specialized consultants.
| FEASIBILITY STUDY HIGHLIGHTS
- Proven and Probable Mineral Reserves of 4.0 million ounces of gold and 10.3 million ounces of silver.
- First- and second-quartile average cash costs of US$413 and US$468 per ounce gold (including royalties and net of silver credits) over the first 5 and 10 years, respectively.
- Industry leading "all-in" costs of US$771 per ounce gold, first 10 years.
- Average mill head grade of 1.46 grams per tonne ("g/t") of gold, first 10 years.
- Average underground grade of 5.07 g/t of gold, life-of-mine.
- Average annual production of 326,000 gold ounces and 494,000 silver ounces, first 10 years.
| KEY METRICS
- Life-of-mine after-tax net present value ("NPV", at a 5% discount rate) of $931 million, internal rate of return ("IRR") of 23.7% and a payback of 3.2 years based on metal prices of US$1,400 per ounce gold and US$25 per ounce silver (base case).
- Initial pre-production capital costs of $713 million.
- Total open pit sustaining capital costs of $322 million (tailings facilities, overburden, waste removal, and equipment).
- Underground development capital costs of $68 million, commencing in 2016, funded by operating cash flows.
- Underground sustaining capital costs of $95 million (development, infrastructure and equipment).
| SUMMARY OF PROJECT ECONOMICS
| Gold Price
| Silver Price
| NPV at 5% discount
rate (C$ million)
| Payback Period
Raymond Threlkeld, Rainy River's President and CEO, stated: "With the release of the Rainy River Gold Project Feasibility Study, we are transitioning to the mine development stage of Canada's newest gold district. The Feasibility Study outlines an outstanding project, located in one of the best mining jurisdictions in the world, conveniently surrounded by infrastructure, and with tremendous exploration potential.
"By continuing to focus on our strategy of delivering a project with the lowest risk to our shareholders and the strongest internal rate of return, we have developed a plan with high production rates, low cash and "all-in" costs and strong margins.
"Our planned mine production averages 326,000 ounces of gold and 494,000 ounces of silver annually in the first 10 years of the combined open pit and underground operation. Over that period, we will operate at mill head grades of 1.46 grams per tonne of gold and 3.19 grams per tonne of silver, and a low open pit operating strip ratio of 2.8:1, which excludes overburden and capitalized waste.
"The higher grades mined in the open pit and underground will enable the average cash costs in the first five and 10 years to be US$413 and US$468 per ounce of gold including royalties and net of silver credit, respectively, which would place the Rainy River Gold Project in the lowest and second-lowest quartiles for cash costs, respectively, among gold producers worldwide. The after-tax NPV is $931 million with low "all-in" cash costs of US$771 per ounce gold (at US$1,400 per ounce gold, US$25 per ounce silver, including royalties and net of silver credits).
"This mine plan, combined with the exploration potential in our district, makes the Rainy River Gold Project stand out in Canada as a low risk, high return project.
"A prime example of the district potential is our exciting Intrepid Zone, where last week we saw high grade intercepts of almost half an ounce of gold and almost 3 ounces of silver over 9 metres in drill hole NR 131523. The Intrepid Zone, which is not included in the Feasibility Study, exemplifies the potential of the district and is expected to add high quality ounces to an already outstanding Rainy River Gold Project."
Areas of Upside Potential for the Project
- Intrepid Zone integration into the mine plan
- District exploration
In addition to the completion of its Feasibility Study, the company has received Provincial and Federal clearance for the filing of its Environmental Assessment (“EA”) report. Rainy River plans to file the RRGP Environment Assessment report with authorities in Q3/13 and continue to move forward with basic and detailed engineering.