INTERNATIONAL TOWER HILL MINES LTD. : http://www.ithmines.com/ : QwikReport

Livengood

Livengood Gold Project, Near Fairbanks, Alaska, USA

4.04M Ounces Gold Indicated and 3.59M Ounces Gold Inferred



Interior Alaska Legislative Delegation
Letter of Support for Livengood Development
click to enlarge

Highlights of Results

The results of the independently prepared 2009 winter program mineral resource update estimate (announced June 25, 2009) for the Money Knob deposit at the Livengood gold project near Fairbanks, Alaska (Tables 1-3). The independent study incorporates all the drilling in the 2009 winter program plus the previous drilling for an overall total of 189 diamond and reverse circulation holes (Figure 1). This new independent resource estimate will form the basis for the Company's initial Preliminary Economic Assessment which is scheduled to be completed the third quarter 2009.

Table 1
May 2009 Livengood Resources (at 0.50 g/t gold cutoff)

Classification

Gold Cutoff (g/t)

Tonnes (millions)

Gold (g/t)

Gold (Ounces)

Indicated

0.50

145,767,213

0.863

4,044,471

Inferred

0.50

142,557,941

0.790

3,597,925



Table 2
May 2009 Livengood Resources (at 0.70 g/t gold cutoff)

Classification

Gold Cutoff (g/t)

Tonnes (millions)

Gold (g/t)

Gold (Ounces)

Indicated

0.70

84,964,254

1.06

2,884,637

Inferred

0.70

68,856,010

0.99

2,200,489



Table 3
May 2009 Livengood Resources (at 0.30 g/t gold cutoff)

Classification

Gold Cutoff (g/t)

Tonnes (millions)

Gold (g/t)

Gold (Ounces)

Indicated

0.30

234,945,944

0.69

5,174,276

Inferred

0.30

280,596,423

0.59

5,322,617

Readers are cautioned that mineral resources which are not mineral reserves do not have demonstrated economic viability.
The drilling incorporated into the new resource estimate was primarily from two areas of permafrost that are best accessed in the winter months and added an average of over 20,000 ounces of gold per hole to the resource (Figure 1). The generally higher grade intervals in the SW target area raised the overall grade of the resource by approximately 5.4%. The Summer 2009 drilling program began on June 1st and, to date, has completed 25 holes of the 120 holes planned (assays pending). A 3D image of the most recently released Livengood drill information can be viewed at:

http://www.corebox.net/properties/livengood/



Project Background

The Livengood deposit is a major new North American gold discovery located in Alaska along the Trans Alaska Pipeline route, 110 kilometres north of Fairbanks. The indicated and inferred mineral resource estimate for the Livengood deposit covers an area of approximately 1.8 square kilometres and is based on 189 drill holes and 10 trenches.

In 2008 the company drilled 116 holes. This program was the first grid-drilling resource definition campaign for the project, which saw its first resource estimate in early 2008. The Company's efforts in 2008 discovered the high-grade Core Area, which carries an average grade of almost 1 gram per tonne of gold.

Between February and April 2009 the company drilled 34 reverse circulation holes totaling 9,648 metres which expanded the Core Area to the south west and to the north east as illustrated by holes MK-RC-120 and MK-RC-130 (Figure 1). All of these results have been incorporated into the June 2009 resource estimate.


Figure 1: Livengood drill plan map illustrating how the June 2009 resource estimate expands the deposit to the southwest and northeast compared to the January 2009 resource estimate.



Figure 2: Aerial view looking south at the Money Knob Deposit with the current extent of open ended drill defined deposit.



District Scale Potential

At Livengood soil geochemical studies indicate that there is anomalous gold over an area of roughly 10km by 3km (Figure 3). Within that area there are a number of more strongly anomalous targets that still need to be investigated. Drilling to date has explored a total are of roughly 3.6 square kilometers in the heart of the 12 square kilometer main anomaly. All of these anomalies highlight the still under-explored potential of the district.


Figure 3: Summary of soil geochemistry at Livengood highlighting the scale of the gold system and the relatively small area investigated by drilling to date. The red polygons highlight key gold anomalies in the district.



Resource Expansion Program/2009 Exploration

The 2009 exploration program at Livengood will focus on the expansion of the deposit, specifically the systematic drilling of the East and Northeast sectors of the deposit where previous drilling has highlighted good mineralization (Figure 4). In addition preliminary drilling will investigate the strongly anomalous soil chemistry in the Far East sector (Figure 4). Four drill rigs will be used in the summer, including three RC rigs and one core rig. It is anticipated that they will all drill to the end of September with the possibility that drilling could continue into October. It is anticipated that approximately 40,000 meters of drilling will be completed by the end of September. An intermediate resource will be estimated in October based on assays received to the middle of September. A winter drilling program is planned to explore the Southwest sector of the deposit. The details of this program will be determined in September.

In addition to the drilling program additional soil geochemistry is planned to investigate several of the northeastern anomalies. At least 900 soil samples will be collected in the course of this program.


Figure 4: 2009 Resource Expansion program for the Livengood Gold Project. Drill collars in the present resource are shown in black and white. Holes completed to date in the summer of 2009 collars are shown in red and white. The red polygon around the deposit is the soil geochemical anomaly from Figure 3.



Project Summary

The Livengood project contains a large, bulk-tonnage target that is related to 90 million year old monzonitic intrusions, similar in age to those that host the Fort Knox deposit. This bulk-mineable deposit lies in a logistically favorable area due to its proximity to Fairbanks and location along the Elliott Highway. ITH is developing the Livengood deposit to the resource definition stage and most recently released a Canadian National Instrument compliant updated resource News Release on June 29, 2009.

Location

Livengood is located approximately 120 km northwest of Fairbanks, Alaska in the Tolovana Mining District within the Tintina Gold Belt. The primary target lies in the center of the historic Livengood Placer District which has produced in excess of 500,000 ounces of gold since 1914 and has at least an additional 350,000 ounces of drill defined placer resources. The property can be accessed year-round by the all weather paved Elliott Highway and secondary roads. The property has the benefit of being along the industrial route used to service Prudhoe Bay's oil and gas fields and is within eye shot of the Alyeska Oil Pipeline, a very auspicious location.

Ownership

The property consists of 4,375 hectares (44 km2) of a Lease with the State of Alaska, Leases with individuals for State and Federal claims and a Lease with individuals for private lands. ITH controls 100% of the property package which is subject to sliding scale royalty, land payments and work commitments.

Environmental and Cultural

The State of Alaska and Bureau of Land Management both provide transparent permitting processes which promote responsible modern exploration and mining techniques in Alaska. ITH is committed to the environment and community of Alaska. Archeological studies have been an ongoing part of the exploration permitting process. In 2009 baseline environmental studies have begun including surface water quality studies, stream fauna studies, fish tissue chemical studies, and wetlands delineation. ITH makes a policy of hiring Alaskan contractors where possible and encourages their out of state contractors to hire locally are far as possible. In addition in 2009 ITH signed a memorandum of understanding with the State of Alaska Large Mine Permitting Team which will allow state officials to become directly involved in the design and implementation of baseline work for the project.

Property Background

The Livengood Property has been prospected, explored and placer mined by several companies and private individuals since the 1970s with 19 holes drilled prior to AngloGold Ashanti (U.S.A.) Exploration Inc. acquisition in 2003. AngloGold drilled 12 RC and core holes defining and confirming the broad large-tonnage gold system. Studies conducted by the State of Alaska Division of Geological and Geophysical Surveys in 2003-2004 defined the source area for the placer gold in the Livengood District which is now the target for the large bulk-tonnage system currently under investigation by ITH.

ITH acquired Livengood from AngloGold in August of 2006, aggressively drilled the surface gold anomalies and in return discovered a significant gold deposit in 2007. ITH drilled 7 core holes in 2006 and 15 core holes in 2007 to produce the first resource estimation on the property of NI 43-101 Compliant 2.6 million ounces of contained gold in February 2008. Drilling in 2008 dramatically expanded the deposit with the discovery of the well mineralized "Core Zone" (Figure 4) and the deposit has continued to grow so that by June 2009 the resource is nearly 3 times the size that it was at the beginning of 2008 (Figure 5). Of critical importance is the fact that the overall grade of the resource has been steadily increasing along with the ounces. The June 2009 resource represents a 20 percent increase in the indicated ounces at a 0.7g/t cutoff.


Figure 5: Resource growth at the Livengood project based on a 0.5 gram per tonne cutoff.


Mineralization and Deposit Type

Local mineralization consists of gold in multiple stages of quartz veins associated with variable amounts of pyrite, arsenopyrite, stibnite, and minor to trace amounts of other sulfides. Vein and disseminated mineralization are spatially and possibly genetically associated with dikes and sills of monzonite, diorite, and syenite which are hosted by sediments and volcanic units. These host rocks consist of three, thrust-bound assemblages that include Devonian sediments and volcanics, Cambrian mafic rocks, and basement Paleozoic to Proterozoic sediments and volcanics. This entire sequence was intruded by a series of ~90 million year old dikes and sills (Fort Knox/Tintina Gold Belt age).

Mineralization at Livengood is both stratigraphically and structurally controlled. Two basic styles account for the bulk of gold mineralization at Livengood; these are disseminated mineralization related to potassic, albitic and sericitic alteration events and veinlet-style mineralization which may develop at multiple stages in the history of the deposit (Figure 6).


Figure 6: Generalized paragenesis of the Livengood deposit as proposed by Dick Sillitoe in June 2009.


The biotite alteration is generally preserved only as remnants within broader zones of albitic and sericitic alteration. Gold mineralization occurs as disseminated arsenopyrite and pyrrhotite in this alteration style. Albitic alteration is widely associated with the volcanic-hosted and intrusion-hosted mineralization. Sericitic alteration is the most widespread and occurs in all major rock units and makes up the bulk of the core zone mineralization.

What makes Livengood a major deposit is the alteration-related mineralization. This results in the development of broad zones of relatively low grade mineralization. More locally developed higher grade vein-hosted mineralization then raises the overall grade to potentially economic grades. The pervasive style of the mineralization is reflected in the fact that many holes are mineralized over 50% of their length (Table 4).

Table 4: Total length of mineralized intervals in selected holes from Livengood illustrating the pervasive nature of the mineralization. These represent the 12 highest grade holes drilled to date.

Hole ID

Total Depth (m)

Length Mineralized (m) *

Average Grade Mineralized Section (g/t)

% of Hole Mineralized

Reverse Circulation Drilling  

MK-RC-0119

225.55

138.70

1.76

61%

MK-RC-0088

115.82

28.95

1.50

25%

MK-RC-0075

243.84

94.48

1.47

39%

MK-RC-0023

288.04

170.68

1.44

59%

MK-RC-0008

213.36

202.69

1.42

95%

MK-RC-0126

263.65

167.66

1.42

64%

MK-RC-0039

277.37

181.36

1.39

65%

MK-RC-0120

313.94

88.39

1.38

28%

MK-RC-0071

301.75

201.16

1.35

67%

MK-RC-0110

355.09

236.24

1.33

67%

MK-RC-0007

286.51

160.04

1.32

56%

MK-RC-0089

374.90

204.22

1.29

54%
* Intervals included in sum have <3m of internal waste & cutoff grade of 0.25g/t

Resource Definition Summary

On June 24 2009, Barnes Engineering Services, Inc. delivered the updated mineral resource estimate which will be incorporated into in the forthcoming report on the preliminary economic viability of the Livengood project. The updated resource estimate was prepared as at May 30, 2009 in accordance with the requirements of N.I. 43-101 and incorporates the data for all drilling through the end of May 2009.

The June 2009 indicated and inferred mineral resource estimate for the Livengood deposit covers an area of approximately 2.6 square kilometres and is based on 189 drill holes which have an average length of 252 metres and 11 trenches with an average length of 38 metres. Approximately one half of the total estimated area (1.6 square kilometres) contains 177 of the drillholes and, in this area, the geology has been modeled to represent the volumes of the different stratigraphic units on the property. Outside of the modeled area no identifiable stratigraphy has been recognized and, consequently, it has been modeled as a homogeneous mass. Statistically, each of the geological volumes was treated independently with individual kriging parameters developed.

The resource model for the deposit was developed using Multiple Indicator Kriging techniques. Indicator variogram modeling was done on 10 metre composites. The resource model and the variograms were heavily constrained by the lithological model developed by the Company. Statistical analysis showed this to be a reasonable and prudent approach to modeling. Spatial statistics indicate that the mineralization shows very reasonable continuity within the range of anticipated operational cutoffs. Bulk density was estimated on the basis of individual density measurements made on core samples and reverse circulation drill chips from each stratigraphic unit. In total, 95 measurements were used. An average density of 2.72 was used for the entire modeled volume, as the variability between units was small. The resource model, with blocks 15 x 15 by 10 metres, was estimated using nine indicator thresholds. A change-of-support correction was imposed on the model assuming 5 x 5 x 10 metre selectable mining units.

The geology of the holes around the margins of the currently drilled area indicate that the favourable host stratigraphy and alteration remain open laterally and at depth, thus indicating that the system could potentially be much larger than the current estimate.

A detailed description of the updated resource estimate and other pertinent geological information related to the Livengood project will be included in a NI 43-101 compliant preliminary economic assessment technical report being prepared for the Company by Mineral Resource Services Inc., Barnes Engineering Services, Inc. and Pennstrom Consulting Inc., which will be filed on SEDAR within 45 days of the June 24th Press Release.

Metallurgical Studies

Preliminary gold characterization results indicate very high, rapid cyanide extractions for the oxide and weakly oxidized ores (averaging 96.7%). The results of preliminary cyanide extraction tests carried out on selected samples are outlined in Table 2. Samples were selected to represent variations in the grade, degree of oxidation and alteration style. The results show that the gold is readily recovered from the oxidized and partially oxidized ore types with somewhat lower recoveries from un-oxidized ores.

Table 5: Cyanide extraction results from 72 hour bottle roll tests conducted by Hazen Research on minus 10 mesh sample material. Head Assay refers to the assay of the original sample material. The Residue Assay is the amount of gold left in the solid material after the cyanide extraction. Calculated Head is the grade calculated based on the residue assay and the gold content of the cyanide solution. The gold recovery is calculated using both the head grade estimates.

Oxidized & Partially Oxidized Mineralization

 

Unoxidized Mineralization

n=21

Head Assay (g/t)

Calculated Head
(g/t)

Residue Assay (g/t)

Gold Recovery Based on Solids

Gold Recovery Based on Products

 

n=6

Head Assay (g/t)

Calculated Head
(g/t)

Residue Assay (g/t)

Gold Recovery Based on Solids

Gold Recovery Based on Products

Max

2.47

3.22

0.69

94%

96%

 

Max

3.36

1.49

0.89

96%

90%

Min

0.44

0.59

0.05

28%

34%

 

Min

0.60

0.69

0.07

23%

24%

Mean

1.01

1.11

0.24

73%

77%

 

Mean

1.51

1.07

0.50

60%

56%

The most recent metallurgic results, performed by Kappes Cassiday & Associates of Reno, Nevada, focused on testing gold recovery enhancement. Twenty-four samples were ground to -200 mesh and then split, with one portion undergoing whole ore bottle roll testing and the other portion going to a gravity concentrator. Only 20 samples had sufficient material to do both tests. The whole ore bottle roll tests were conducted on 1 kilogram aliquots with 40% solids in 1 gram/litre cyanide mixture. During the test, samples were extracted at 2, 4, 8, 16, 24, 36, 48 and 72 hours to define an extraction curve. The gravity concentration test involved feeding the sample through a Falcon SB40 Concentrator at 3 psig, 50 Hz and 20% solids three times. Following the first two runs, the Falcon concentrate was hand panned and the middling returned to the tails for further concentration. The final run concentrate was panned and the middlings separated. The combined panned concentrate and final middlings were subsequently fire assayed while the tails were subjected to 72 hour bottle roll cyanide extraction. The combined assays were used to calculate the total gold recovery.

The tests followed a proven gold recovery flow-sheet which utilized a combination of grinding, gravity concentration and cyanide leaching of the tails to increase average recoveries by 15% in the oxide/transition rock and by 30% in the un-oxidized rock, resulting in a global average gold recovery of 89% (Table 3). The significant increase in gold recovery indicates the economics of the Livengood deposit could be greatly enhanced by a high recovery milling operation for the higher grade ore and a low grade heap leach operation for the lower grade material, similar to that employed by the producing Fort Knox Mine located 100 kilometres to the south.

The extremely positive metallurgical testwork results confirm earlier indications on recovery optimization through grinding and will open the door to a much more economically robust project at Livengood.

In July 2009 Kappes Cassiday was commissioned to undertake a much broader metallurgical investigation. For this study the deposit was divided into 48 different mineralization types based on combinations of host rock, degree of oxidation and grade. Of the 48 potential styles 35 are actually represented in the Livengood deposit. Using RC chip samples 200 kilogram composite samples were constructed for each of the mineralization types and these composites have been sent to Kappes Cassiday and Associates for testing which will include cyanide bottle toll testing, grinding tests and Gravity Recoverable Gold (GRG) testing. These tests will give a much more comprehensive understanding of the options for processing the Livengood mineralization.

Table 6: Cyanide extraction results from 72 hour bottle roll tests conducted by Kappes Cassiday & Associates on -200 mesh material and with initial gravity concentration and cyanidization of the tailings material. (The Hazen Research results on -10 mesh material are included for comparison).

Sample #

Calculated Head, gms Au/MT

Au Extracted @10 mesh %

Au Extracted @ 200 mesh %

@ 200 mesh + Grav %

Grav Con Grade gms Au/MT

100112113

0.459

79%

84%

92%

45.9

100588589

1.686

59%

73%

 

 

100772773

0.728

76%

70%

 

 

100829830

1.278

77%

83%

91%

129.12

101024026

0.62

71%

88%

 

 

101273274

0.787

78%

87%

91%

54.8

101291292

1.333

87%

91%

94%

94.37

101548549

2.67

95%

94%

99%

163.8

101604605

0.992

75%

83%

96%

200.24

101774775

1.069

85%

94%

95%

89.78

101827829

2.733

80%

98%

94%

77.32

101847849

1.279

58%

59%

82%

67.34

102070071

0.594

92%

87%

 

 

102096097

1.074

71%

89%

85%

50.58

102575576

0.927

96%

94%

98%

200.09

102642643

0.596

69%

80%

91%

47.59

102886887

0.873

36%

42%

75%

81.92

103110111

0.711

75%

85%

95%

153.51

Average OX & Trans Ore

 

76%

82%

91%

104.03

 

 

 

 

 

 

102536537

0.875

90%

96%

99%

50.58

100123124

0.609

59%

76%

90%

27.08

101896897

1.269

28%

41%

70%

52.68

101925926

1.552

48%

64%

85%

194.67

101618619

1.434

60%

80%

90%

68

101437438

0.819

59%

70%

85%

37.3

Average UN-OX Ore

 

57%

71%

87%

71.72

Overall Deposit Average

 

66%

77%

89%

87.87




Conclusions

The Livengood Deposit represents one of the largest new discoveries in the last decade. In the last 12 months it has grown from a prospect to a major deposit. The deposit remains open to the southwest, northeast and northeast. Aggressive drilling in 2009 will undoubtedly expand the deposit significantly.

From a logistical perspective the Livengood Deposit is in a very favourable location. It is on a major year round paved road only 100 kilometers from Fairbanks, a major regional center, and it appears that either natural gas or grid electricity as viable options to power a mining operation there.

Metallurgical testing indicates that the ore is not refractory and can be treated effectively with standard cyanide extraction methods which will probably allow either heap leaching or milling or some combination of the two.

The Preliminary Economic Assessment study currently underway will be a critical fist look at the economic viability of the project so watch this page for that report at the end of July 2009.
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