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Mining News: Junior focuses on growth at Livengood International Tower Hill targets a 10-million-ounce gold resource at Alaska project in ’09 outlining an attractive project for the majors Shane Lasley Mining News
The gold resource at International Tower Hill’s Livengood project has grown by more than 350 percent over the past year. A Jan. 28 resource estimate of 6.8 million ounces of gold makes the project one of the largest new gold discoveries made anywhere in the world in the last decade.
International Tower Hill Mines Ltd. President and CEO Jeff Pontius told Mining News the original target of a 7 million-ounce gold resource by mid-year 2009 has been bumped to 8 million ounces after the most recent estimate came within a fraction of the company’s original goal. The junior is targeting a gold resource in excess of 10 million ounces by year-end, placing it in the top 10 percent of new gold discoveries globally.
Exploration expands As the encouraging results rolled in, the aggressive junior continued to expand its exploration program at the bulk tonnage gold project located about 75 miles, or 120 kilometers, north of Fairbanks, Alaska, first adding a winter drill program and then adding extra drills.
The junior originally had a C$5 million exploration budget for 2009, but on Feb. 12, International Tower Hill said it has succeeded in securing an agreement to raise another C$5 million. Pontius said the company’s focus this year is on Livengood and nearly all of the junior’s exploration budget will be used to expand the property’s resource estimate.
After the junior announced it had succeeded in securing a finance agreement, Pontius said, “We are going to expand our work in 2009 with the additional money. We are going to move from the 16,000 meters in the current plan to 34,000 meters of RC and core drilling this year.”
Two drills to turn this winter During the winter program, the company plans to complete about 9,000 meters of reverse circulation drilling adjacent to the currently outlined resource. The first reverse circulation drill started turning Feb. 6 and a second RC rig was expected to be drilling by the end of February.
Two primary focus areas will be northeast and southwest of the main body of mineralization. The company said these areas are bordered by the high-grade Core zone and are expected to add significantly to the property’s mineral resource.
In addition, drillers will drop back inside the outlined resource area to incorporate two areas not included in the current estimate. Pontius explained that the blocks not included in the estimate have good drilling around them but could not be included because of the way the resource model works.
The company anticipates results from its winter drilling program near the middle of the second quarter. Using the data, the explorer will complete a new resource model that will be the foundation of a preliminary economic analysis of the deposit.
Pontius said he anticipates having results of the preliminary analysis by July.
Core rig tagged for deeper drilling This summer, International Tower Hill plans to add a core rig to its exploration program at Livengood. While the two reverse circulation rigs will be used to continue expanding the breadth of the shallower bulk-tonnage gold resource, the core rig will target a deeper zone believed to be feeding higher-grade mineralization discovered with RC drilling.
“We have defined a northwest trending zone of higher-grade mineralization that appears to have roots to it. This looks like it could be a feeder system. We have intersected some very good grades in this zone,” Pontius explained. “We will come in with a core program to look at that at depth for a high-grade feeder that I assume is going to be a key aspect to the deposit.”
Metallurgy appears promising International Tower Hill reports initial metallurgical work indicates the gold in both the oxidized and non-oxidized parts of the deposit is recoverable with a cyanide solution and that recovery is significantly enhanced with even minor oxidation of the rock.
Tests indicate that Livengood’s mineralization is amenable to cyanide extraction with an average overall gold recovery of 77 percent for the oxidized, or partially oxidized, material and 56 percent for the non-oxidized material. About half of the material included in the October 2008 resource estimate was classified as oxidized or partially oxidized.
The junior said metallurgical results indicate that heap leaching may be a viable method for gold recovery at Livengood. The company said additional tests are currently in progress in order to assess any increase in recoveries with finer grinding.
With deeper and higher-grade ore being discovered, the company is investigating the viability of a gravity mill. Samples currently at the lab are being tested for the ore’s gravity component. The junior anticipates results from this metallurgical work sometime in March.
Resource mushrooms in 2008 The 6.8 million ounce gold resource estimate (based on a 0.50 g/t cutoff grade) at Livengood is divided virtually evenly between the indicated resource category, 3.41 million ounces, and the inferred resource category, 3.39 million ounces. This is a significant increase from the 1.899 million-ounce inferred gold resource reported a year ago (also using a 0.50 g/t cutoff grade).
International Tower Hill’s 2008 exploration program –183 core and reverse circulation holes and 41,063 meters of trenching – outlined an indicated gold resource of 128.6 million metric tons of ore averaging 0.83 grams of gold per ton, with an additional inferred resource of 142.1 million metric tons at an average grade of 0.74 g/t gold, based on a cutoff grade of 0.50 g/t gold.
Included in the overall resource, the company reported discovery of the higher-grade Core zone in the Money Knob target. The Core zone has an estimated indicated resource of 68.8 million metric tons at an average grade of 1.03 g/t gold, or 2.28 million ounces of gold, and an estimated inferred gold resource of 65.2 million metric tons at an average grade of 0.93 g/t gold, or 1.95 million ounces of gold, based on a cutoff grade of 0.70 g/t gold.
XRF increases efficiency The use of a handheld XRF analyzer assisted in rapid and efficient expansion of the gold resource at Livengood, according to International Tower Hill management. The handheld device gives on-site crews an early indication of mineral content, allowing them to more efficiently direct exploration efforts.
“(The XRF data) is a really good early indication. With the turnaround times that (assay) labs have been going through for the last couple of years, you can wait a long time to get your final assays back to see how much gold is in a hole,” Pontius said. “This has been important about directing our drilling to make sure we are following up areas that look like they are well-mineralized. It’s been very important to leading to the successes that we have had and as efficient as we have been at adding ounces to the deposit.”
International Tower Hill Vice President of Exploration Russ Meyers estimated that the use of XRF at Livengood saved the company about C$600,000 in geochemistry costs in 2008.
Exploring power options As resource ounces rapidly build at the deposit, International Tower Hill has begun exploring power options for a potential mine at Livengood.
Though the project lies along the Elliot Highway only about 35 miles, or 56 kilometers, beyond the power grid, the grid lacks excess power. Pontius anticipates using onsite natural gas-fired electricity generation as the most likely power source for a mine at Livengood.
Pontius said liquefied natural gas trucked down from Alaska’s North Slope would be a good short-term solution. For the long-term, the company hopes to obtain natural gas from the “bullet line” being considered to supply gas from the North Slope to Alaska markets.
“Livengood would be a hub-point where the two lines would split, one that goes down to Anchorage and one that goes to Fairbanks, so that would be a great long-term solution for us,” Pontius explained.
Livengood; a major target Two of the top brass of the International Tower Hill team were part of the AngloGold team that discovered the Livengood deposit. In 2006 Anglo sold the project, along with five other Alaska targets, to International Tower Hill in exchange for a stake in the junior. Anglo currently owns 14.55 percent interest in International Tower Hill.
Company geologist Heather Kelly told Mining News that Pontius was the North American exploration manager for AngloGold who initiated the Tintina Project, as well as leader of the Alaska exploration effort. Myers conducted the technical analysis and targeting work on the Tintina Belt study for AngloGold and has led the Alaska exploration effort with International Tower Hill from 2006 on.
International Tower Hill intends to focus on Livengood in 2009 with the goal of attracting a major to develop the rapidly expanding gold target. The junior believes the property will be a compelling target for one of the global giants. The junior also looks forward to bringing in a major to develop Livengood so it can turn to investigating other promising targets.
“The fact that Livengood is so favorably located along a paved highway some 70 miles northwest of Fairbanks is a huge positive for its potential near-term development into a large mining project. I would expect that the Livengood project will grow to a compelling acquisition target for a major gold company in the near term and that the company will then continue on with the exploration and development of its other very attractive exploration assets,” Kelly said. “ITH has a very robust pipeline of projects which will receive greater exploration effort following the monetization of the Livengood project.”
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