The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Junior boosts estimate to 12.5 million ounces for Interior project; hits possible deep feeder zone as potential mine takes shape
The gold resource at International Tower Hill Mines Ltd.'s Livengood property in Interior Alaska more than tripled to 12.5 million ounces in October from 4 million ounces going into 2009. The junior expects to add another million or so ounces when assay results from about 60 more drill holes are added to a new resource estimate due out by the end of the year.
As Alaska's summer exploration season drew to a close, the Vancouver B.C.-based junior continued to discover potential for resource expansion northeast and west of the defined deposit. The core drill program also cut a thick intersect of high-grade gold below the Core Zone, the first evidence of a feeder zone theorized by company geologists.
Winding down its 2009 exploration program at the end of October, International Tower Hill will focus on a preliminary economic assessment due to be released around the end of the year.
5 million added ounces
In an Oct. 13 resource update, the company added assay results from 119 holes drilled this summer, primarily in the Northeast and Sunshine zones, to the 189 holes of data included in a 7.6 million-ounce resource released in June.
Using a cutoff of 0.5 grams per metric ton gold, the latest resource update included an indicated resource of 297 million metric tons grading 0.85 g/t, or 8.1 million ounces gold. The deposit also contains an inferred resource of 164 million metric tons grading 0.84 g/t, or 4.4 million ounces.
International Tower Hill said calculating the gold resources at Livengood with a 0.7 g/t cutoff offers an even more significant estimate for gauging the possibility of a future mine at Livengood.
At a cutoff of 0.7 g/t gold, the deposit contains 158 million metric tons of indicated resource grading 1.07 g/t gold and an inferred resource of 78 million metric tons grading 1.11 g/t.
"More importantly to us, at the 0.7 (g/t gold) cutoff, which is what we are thinking will be a mill cutoff, the deposit is on the order of 8.2 million ounces," International Tower Hill President Jeff Pontius told Mining News.
"It's big now, about twice the size of Fort Knox when they put (that mine) into production," he added.
International Tower Hill plans to wrap up the 2009 drill program at the end of October and calculate a new resource estimate with assay results from another 60 drill holes by year's end.
Pontius anticipates that the remaining holes will add at least another 1 million ounces to the rapidly expanding gold deposit located about 110 kilometers, or 70 miles north, of Fairbanks. The remaining assays also are expected to upgrade much of the resource in the Northeast and Sunshine zones from the inferred to indicated categories.
"A lot of (the remaining holes) will be infill that will be in the Sunshine, Northeast area; so we will be continuing to push up the number of indicated ounces, and we have some step-out drilling," Pontius said.
Economic assessments
The explorer is planning to produce two preliminary economic assessments over the next six months.
An initial assessment, scheduled to be released by the end of 2009, will incorporate the current resource estimate and the heap-leach portion of a US$400,000 metallurgical study being conducted by Kappes, Cassiday and Associates.
Pontius said about 60 percent of the deposit has varying degrees of oxidation. A previous but less-extensive metallurgical study indicated that the oxidized and partially oxidized mineralization at Livengood is amenable to heap-leaching.
The depth of oxidation varies in the Core zone, but probably averages about 150 meters, he said. The oxidation in the Sunshine zone has run to the depth reached by the reverse circulation drills, or about 250 meters.
Both the Core and Sunshine zones have mineralization starting at, or near, the surface with gold grades greater than a half-gram per metric ton. The junior envisions building an initial heap-leach operation to be fed by oxidized at-surface mineralization and then bringing a mill online.
"This thing is going to have a sweet three to five years at the beginning with a very low strip-ratio," Pontius said. "It is going to be real interesting to see how it all comes together. We are actively working on pit and mine design right now.
Once the metallurgical study is complete, International Tower Hill plans to focus its attention on a second economic study that will incorporate a mill into the scenario. This more comprehensive economic assessment is scheduled to be completed near the end of the first quarter of 2010.
"We have had good mill recoveries in both oxidized and un-oxidized ore," Pontius said. "It (the mill component) is really going to be the driver for the bulk of the deposit."
Feeder zone found
A core drill added to the summer drill campaign has been seeking a deep feeder zone that company geologists believe exists below the Core zone.
After encountering some difficulty drilling to the depths needed to test for the hypothetical high-grade gold zone, hole MK-09-37 reached the target. At a depth of 432.4 meters, or 1,405 feet, hole 37 intersected 15.5 meters with an average grade of 6.55 g/t gold.
"We are working on a follow-up hole. We have two intersections into that zone now, plus an upper intersection that are kind of all fitting together into a structural zone that it looks like we can chase," Pontius said. "This drill hole that is going into it right now has intersected the fault zone; if we hit it in the next two holes then we are going to have a shape that we can chase."
The company believes the deep mineralization can be reached with an open-pit, but the grades and widths of the mineralization are good enough to chase with underground mining if necessary.
"The grades are good enough, from my experience in Nevada, whether it drives the pit down there, which it probably will because we have a fairly shallow pit. Even if it didn't, those widths in the 15-meter range with those grades in the 5- to 6-gram range, that stuff is being mined underground, right now in Nevada."
"If we hit in these next two holes it is going to be an exciting thing for us," he added.
Aggressive program in 2010
International Tower Hill plans to kick off a winter exploration program in February. Drilling will focus on the Southwest Zone and some of the other areas that need to be drilled while the ground is frozen.
"We've got the winter drill program, which is going to be a very aggressive program for us. We will run four rigs and hit it as hard as we can," Pontius said. "We have areas we need to drill to the southwest and areas between the Sunshine zone and the Core zone, which certainly look like they are going to be mineralized. That's an area we definitely want to get back to. Some of our best results have come from there when we had the winter program this year."
The 2010 summer drill program that the junior is planning will focus on defining the edges of the mineralization where it is still open and beginning to upgrade the multimillion-ounce gold resource to reserves.
The deposit appears to remain open to the northeast. Though assays are still pending, one hole drilled about 300 meters to the northeast in the Sunshine zone appears to have cut good mineralization and mineralization could extend well beyond that.
Rock chip samples taken by geologists investigating a potential heap-leach site 2,000 meters northeast of the deposit returned assays of 1-4 g/t.
"Certainly, in my mind, we haven't closed it off in the northeast direction. They are drilling off to the north now on the other side of Ruth Creek, and we will see what comes out of that," Pontius said.
The explorer is also looking at a westerly expansion of the deposit. A scout-hole drilled 500 meters west of the currently defined deposit has hit what the company describes as good-looking alteration.
"We don't have any results back yet, but we are encouraged that we can march this thing off to the west," Pontius said.
Though the deposit continues to demonstrate the potential for expansion as the 2009 program winds to a close, Pontius believes International Tower Hill should have the project outlined to the point where it can begin investigating the details of building a mine at Livengood.
"We are going to be in a position, I think, by summer of next year to have defined something that makes sense. At that point in time, there are all kinds of engineering drilling and so forth that has to go on. The program will be dedicated to that, but will keep a couple of drill rigs turning to expand the deposit and make sure we are not missing something out there that would be great for us," he added.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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