Duane Hicks
Mining exploration in Richardson Township by Rainy River Resources Ltd. continues to turn up promising results, and the gold-mining operation potentially may be in production by 2014.
Garett Macdonald, vice-president of operations for Rainy River Resources, told delegates attending the Rainy River District Municipal Association’s annual general meeting here Saturday that exploration is increasing and the company is moving ahead with various studies this year.
In late February, the company will have out a new resource estimate which will indicate findings (ounces of gold) from the 122 new drill holes done in 2009.
It currently has about four million ounces in gold resources right now—half of it indicated, half of it inferred.
A preliminary economic assessment, essentially a first look at the economic potential of the project, is expected to come out by the end of July.
A potential project schedule, based on what the company knows to date, will include further resource estimates and drilling and a feasibility study by the end of 2011.
There also will be environmental baseline work (2010-11), which will involve working with local First Nations.
Macdonald stressed the company has to fully understand all of the technical and environmental aspects of the project so it can evaluate sometime this year or the next whether the mining project will be built.
“Often these projects can take two years to construct, from the time you decide to build,” Macdonald said, adding that if all goes well, the mining operation could be in production sometime in 2014.
But Macdonald expressed the importance of the work being done right now to determine what will happen down the road.
“Rainy River is in an exploration stage, but is moving toward development, and that just takes some time to complete,” he noted.
“There’s great potential here for a project,” he added, noting it looks to be a deep and long strike.
“We’re looking at a very big system here, and I think we’ve just started to find out what’s going on geologically,” Macdonald enthused.
“We’re basically looking at a volcanic system and it’s roughly three billion years old,” he told delegates. “So think of a volcano that erupted three billion years ago and now it’s tipped on its side and buried.
“So this is what we are figuring out—the more we drill, the more we understand, and the more we understand, the better success we’ll have finding more gold,” he remarked.
Macdonald said only about 30 percent of the project has been explored so far.
“It seems to change daily, depending on what we find,” he noted. “It’s a very big system and there’s a lot of exploration left to do on the project considering how much has been done.
“We believe there’s a lot more there than what we know.”
Macdonald said the company will be drilling about 70,000 metres this year.
The annual budget for 2010 is $18 million, roughly half of which will be spent on drilling, with the rest being spent on further environmental engineering studies.
The company has roughly $20 million in its treasury at the moment.
The company, which is branching out from Vancouver to have a second base in Toronto this year, will focus on building a development team, and will be hiring environmental consultants and those skilled in permitting and designing mines.
Macdonald said there’s currently six drill rigs on site, one of which was added a few weeks ago in order to continue its aggressive exploration of high-priority targets, and the company may need more as the project continues.
“The additional drilling that’s been done in the past year should do two things: it should increase the ounces in the project, and it should increase the confidence what we have in where those resources are located,” he explained.
It appears at this time that any future development probably would be a combined open pit and underground mining operation.
While the company previously had speculated it only would be an open pit mine, drilling in the past year had indicated the minerals may be located much deeper than what they’d be able to get with an open pit.
If it does go into production, the mine could employ 500-600 people, speculated Macdonald.
The operation would include not only the extraction of gold but processing into its final stage—gold bars—for shipping.
Macdonald said the 37,000 acre land package has suitable infrastructure for building potential mines.
Rainy River Resources acquired the property from Nuinsco in 2005. Since then, a total of 260,000 metres (260 km) of drilling has been done on the property.
Also in that time, the resources of the project were increased from 600,000 ounces of gold to four million ounces.
