Location and Regional Geology

The Rainy River Project is centred in Richardson Township approximately 80 kilometres south-southeast of Kenora, Ontario. In June 2005, Rainy River Resources Ltd. completed the acquisition of 100% interest in the Project from Nuinsco Resources Limited. Currently, the Project consists of 59 unpatented mining claims, 16 patented claims and one mining lease for a total land package of approximately 25,000 acres.



The Project is underlain by Archean-aged volcanic and sedimentary rocks of the Rainy River greenstone belt in the Wabigoon Subprovince, host to the Sturgeon Lake VMS deposits to the northeast. The Rainy River belt is bounded by the Sabaskong Batholith in the north and the Rainy Lake Batholithic Complex in the east. The belt is contiguous with the Kakagi-Rowan Lakes Greenstone Belt to the north, host to the Cameron Lake gold deposit (Nuinsco Resources Limited). Regional metamorphic grade is greenschist to lower-middle amphibolite facies, and upper amphibolite facies adjacent to batholiths.

Structurally, the strongest and earliest deformation event produced a well-defined penetrative fabric commonly observed on a regional scale. Subsequently, major faults, such as the east-west trending Quetico Fault which some interpret to extend through the Richardson Township area, were established.


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The Quaternary geology has been interpreted by the Ontario Geological Survey via surficial mapping and rotasonic drilling programs. In Late Wisconsin time when most of the Quaternary sediments were deposited, the area lay on the suture zone between Labradorean and Keewatin ice domes. This juxtaposition resulted in deposition of a basal till layer of northeastern provenance, which is overlain by at least one horizon of till of western provenance. The basal till layer is in direct contact with bedrock and has proven extremely effective as a medium for sampling the heavy mineral content and the discovery of Blind Gold Deposits on the Rainy River Property. Nuinsco Resources Limited was drawn to the area on the basis of an overburden sampling program by the OGS which yielded an exceptionally high gold grain result from an RC drilling program.



Exploration History, Mineralization and Geological Model

Due to thick overburden cover and a paucity of outcrop, much of the geological setting of the Rainy River Project, and the Rainy River greenstone belt, has been based on data collected from over 700 reverse circulation drill holes completed by Overburden Drilling Management Limited (ODM) for Nuinsco Resources Limited between 1994 and 1999, the interpretation of aeromagnetic data and the mapping carried out by Johns (1988) of the Ontario Geological Survey (OGS) in conjunction with an OGS rotasonic drilling program completed between 1987 and 1988 (Bajc, 1991). In fact, gold mineralization in Richardson Township was initially discovered on the basis of the results of the OGS program.

Nuinsco began work in the region in 1993 with a program designed to follow-up the Richardson Township gold-in-till anomaly reported by the OGS. The widely spaced drill holes completed by Overburden Drilling Management Limited (ODM) for Nuinsco led to the delineation of the largest and most intense gold-anomalous till layer ever encountered by a reverse circulation drill program in Canada, much larger, in fact, than the anomaly that led to the discovery of the Casa Berardi gold deposits in the Abitibi greenstone belt in northwestern Quebec. Following the discovery of the gold-in-till-anomaly, Nuinsco began to systematically develop exploration targets within the Rainy River district by employing a reconnaissance-scale overburden-drilling program. Initially a rotasonic drill rig was utilized and subsequently the more economical reverse circulation method was employed. The purpose of this work was to locate and define gold-in-till dispersal trains overlying the bedrock and to map the bedrock geology in areas of thick overburden cover.

Once the gold-in-till and bedrock anomalies were traced up-ice to a potential source, Nuinsco completed a series of diamond drill programs to assess the mineral potential of the bedrock source targets. The programs culminated in the delineation of a significant gold resource in the #17 Gold Zone, discovery of another gold-enriched target area known as the #433 Gold Zone and a high grade nickel-copper-PGE zone, known at the #34 Zone.



Current work on the property by Rainy River Resources Ltd. includes drilling of an additional 84 reverse circulation holes in April and August 2005. This work has added to the substantial database of basal till and bedrock data which will help guide the next exploration phase.



#17 Gold Zone
The #17 Gold Zone lies within a broad expanse of anomalous dacitic metavolcanics which averaged about 100 ppb gold. The mineralized zone varies from 40-140 metres wide and currently measures approximately one kilometre in strike length. Nuinsco defined an inferred resource of 11,025,000 tonnes grading 1.33 g/t gold (471,400 ounces) outlined by widely spaced drill intersections over a 1.0 kilometre strike length. Contained within this is a zone of higher grade material with a combined total of 1,736,000 tonnes grading 1.56 g/t (87,100 contained ounces) of gold. The resource and estimates, stated by Nuinsco to be NI43-101 compliant, are historical in nature, have not been verified by the Company's qualified person, and should not be relied upon; however, Rainy River believes that these historical estimates are relevant.

Preliminary metallurgical tests conducted for Nuinsco by Lakefield Research on the #17 Gold Zone mineralization indicate that on find grind, the gold is free-milling and amenable to leaching with gold recoveries of 93% being achieved.

#433 Gold Zone
The #433 Gold Zone is situated approximately 500 metres to the north of the #17 Gold Zone. Nuinsco drilled a total of 11 diamond drill holes and obtained results including 64.06 metres grading 1.40 g/t gold (NR97-42). The mineralization, while similar in gold content to the #17 Zone, is more copper rich suggesting an overall zonation to the immense mineralized system evident on the property. This zone remains open in all directions, and recent work by Rainy River has identified an untested IP chargeability anomaly along the western extension which will be drill tested by the current drill campaign, in addition to an exceptionally high bedrock intercept grading 7.00 g/t gold obtained on the most recent RC drilling program in August 2005.

Base Metal Mineralization (#34 Zone)
During the course of drilling the eastern extension of the #17 Gold Zone in 1995, Nuinsco discovered massive and disseminated (net textured) Ni-Cu-PGE-Au-Ag-Co bearing sulphides within a mafic-ultramafic host rock. Economic grades returned from drilling include 2.44 g/t Au, 0.94% Cu, 1.31% Ni, 1.25 g/t Pt and 3.32 g/t Pd over 4.86 metres (drill hole NR95-34) and 0.54 g/t Au, 2.26% Cu, 3.81% Ni, 3.97 g/t Pt and 9.04 g/t Pd over 2.47 metres (drill hole NR96-51). The mineralization has been traced along a ~350 meter strike length. The sulphide zone as outlined is small and its width has not been determined, however mineralized autoclasts contained within the sulphide mineralization are texturally distinct from the enveloping host rock suggesting transport from a separate, as yet undiscovered and potentially larger mineralized source.



Richardson Caldera Structure -- Geological Model
An important benefit of the widespread overburden drilling (>700 combined rotasonic and reverse circulation drill holes) was the ability to interpret bedrock geology from the recovered chips obtained from most holes. All of these samples were analyzed for gold, whole rock geochemistry and a variable assay suite. These analyses not only resulted in the identification of a large gold-enriched bedrock anomaly but were employed to enhance the regional geological framework and to provide insight into the type and extent of regional alteration patterns.

In the Rainy River Project area, the reverse circulation campaigns identified a large area of gold-enriched felsic to intermediate volcaniclastic rocks measuring approximately 2.5 km² in size. This anomalous area marks the limits of a recently interpreted caldera structure which contains both the dacite-hosted #17 and #433 Gold Zones and the #34 high-grade Ni-Cu (PGE-Au) Zone contained at the base of a sub-horizontal layered mafic/ultramafic pipe. All three mineral discoveries are "blind" deposits situated along the eastern margin of the interpreted caldera structure.

The indirect evidence for the presence of a caldera structure, as indicated by Dr. L. D. Ayres, a noted volcanologist and a former Professor at the University of Manitoba, includes:

1. The blocky, rather than linear distribution of the stratigraphic horizons.
2. The abrupt on-strike interruption of major rock types from mafic to dacitic volcanics.
3. The capping of the dacitic block by rhyolite and felsic fragmental rocks.
4. The confinement of quartz-feldspar porphyry intrusions and exhalites (iron formation).
5. Bowing (resurgent doming) of the dacite and rhyolite above the porphyry stocks.
6. Growth faults suggesting thickening and increased offsetting of the lowermost down-thrown dacitic horizons.
7. Restriction of strong shear deformation to the dacite and rhyolite units. This suggests these units were hydrothermally altered and weakened during or shortly after deposition, thereafter sheared during the southward tilting and regional greenschist metamorphism. The most convincing evidence is the presence of consistently anomalous levels of background gold (10 to 300 ppb) in the volcanics, generally accompanied by pyrite.

The following cartoons illustrate the postulated sequence of events that may have taken place for the Richardson Caldera:

Current Work and Next Steps

Early in 2005, Rainy River Resources Ltd. began working on the project by initiating a GIS compilation of all available topographic, cultural, geological, geophysical and geochemical data from government surveys and exploration programs completed by Nuinsco Resources. Historical geophysical data was reprocessed and reinterpreted. Re-logging of previous drill holes in the gold-mineralized zones commenced to gain a better understanding of the structural and lithological controls on the mineralization. This work was supplemented by in-fill sampling of the existing drill core where it had not been sampled previously. In addition, an 84-hole Reverse Circulation drill program was completed by Overburden Drilling Management Limited (ODML) in two campaigns in April and in August, 2005.

A Phase One diamond drill campaign commenced on the Project on September 21, 2005. The program will test a number of high priority targets developed from the initial data compilation and exploration program. Drilling on the #17 Gold Zone will test the extension of the mineralized zone which is open to the east and may be offset by faulting. In addition, drilling will test the interpreted down plunge direction of high grade gold mineralization within the #17 Zone. Rainy River Resources has identified a southwest plunge direction that may provide a structural control to the higher grade shoots; this direction has not been targeted by previous exploration efforts. Previous drill intercepts in the #17 Gold Zone include 5.1 grams gold over 62.57 metres (0.18 opt gold over 205 feet) cut by Nuinsco in drill hole NR96-45.

At least two new high priority gold targets have been identified by the recent RC till sampling program. The most interesting target lies between the 17 and 433 Gold Zones. A cluster of closely-spaced RC drill holes has recorded a substantial "cut-off" in pristine gold grain counts with one hole, RC05-57, returning a gold value of 6.58 grams per tonne from its 1.7 metre bedrock sample. It is believed that this bedrock sample potentially represents a third "blind" bedrock gold discovery within the Project area. In addition, targets to be tested in this phase of drilling also include two IP chargeability anomalies in the vicinity of the #17 and 433 Zones, neither of which have been tested by previous drilling.

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