ONTARIO – Toronto-based Rainy River Resources has revised the preliminary economic assessment for its Rainy River gold project 80 km south of Kenora, thanks to estimated mill head grades of 1.45 g/t Au, 50% above the figure used in the November 2011 PEA.
The Rainy River project will generate a pre-tax net present value (5% discount) of C$846 million and generate an internal rate of return of 21.0%. Payback will be 3.8 years based on US$1,250/oz for gold and US$25/oz for silver. At current precious metals prices the project has a NPV of C$1,97 billion and IRR of 36.6%.
Rainy River expects preproduction capital costs to be $694 million for an open pit (including infrastructure and a processing plant) and $67 million for an underground mine. The mill is to have a capacity of 20,000 t/d. Total production will be 3.8 million oz of gold and 6.8 million oz of silver over the life of the project.
Total measured and indicated resources for both the pit and underground mine are 150.58 million tonnes grading 1.17 g/t Au and 2.46 g/t Ag. The total inferred resource is 88.29 million tonnes grading 0.78 g/t Au and 2.35 g/t Ag.
The company says there is upside to the project. It has the potential to extend the mine life beyond 16 years, to increase throughput, to deepen the planned underground mine or to find more resources though its district exploration program.
Rainy River next plans to update the 43-101 resource estimate and initiate basic engineering.
Additional details are available at RainyRiverResources.com.