River of gold: Rainy River Resources moves towards feasibility.In North Carolina, the homebase for Rainy River Resources' GEO Ray Threlkeld, It's a balmy 18 degrees, a far cry from the below-zero temperatures of Fort Frances, where the junior mining company's Rainy River Gold Project (RRGP) is under exploration. But Threlkeld will be spending a lot more time up north over the next 12 months, as the company moves towards a feasibility study.
After completing 187,000 metres of drilling in 20il, Rainy River released its preliminary economic assessment (PEA) in November, announcing it anticipates to annually produce 329,000 ounces of gold and 497,000 ounces of silver over the 13-year life of the combined open pit and underground mine.
"The area is completely covered with about 25 metres of glacial till, so the ore body's never been exposed, and it's sat there for many years," said Threlkeld, on the phone from his Raleigh home. "We think this is hot only just a nice, big mine, but this is a mining district. We're finding more and more ore each day, and we've got a huge area to explore yet."
He predicted the $681-million project, located 60 kilometres from Fort Frances and 25 kilometres from Emo, could be even larger than anticipated. A new resource estimate is being prepared for February, followed by an updated PEA for March, and "we expect some amazing increases," Threlkeld said.
He anticipates the grade of the deposit will increase, the waste-to-ore ratio will improve, and the mine life may even be extended because of two additional areas of exploration not included in the original PEA.
With an anticipated 2012 budget upwards of $70 million, Rainy River has enough in its treasury ($100 million) to see it through the feasibility stage, and isn't actively seeking more financing.
Threlkeld's confident that the development team, put into place in recent months, has the experience and knowledge to see the project through to development, which is anticipated for 2015.
When that time comes, construction will provide an estimated 700 jobs, and a permanent workforce of more than 500. Threlkeld sees RRGP opening doors for the local workforce, which is highly skilled, but often travels long distances to commute.
"There are a lot of young people who have moved out of the area and would like to come back--their families own farms and land in the region," Threlkeld said. "They'd like to come back and take care of that and have an op portunity to work."
An office in Emo provides residents with information about the project, and consultation with the area First Nations is ongoing. The company has forged a close relationship with the Fort Frances Chiefs Secretariat, comprised of chiefs from the seven area First Nations.
A memorandum of understanding signed early on in the consultation process has provided training and employment for First Nations members--the secretariates generating revenue through a partnership with Orbit Garant Drilling, which is operating four of the 12 drill rigs in the area--and the parties are hopeful of signing an impact and benefit agreement early in the first quarter of 2012.
Throughout his career, Threlkeld has worked closely with indigenous cultures around the world, but said working with Northern Ontario First Nations has been a unique, yet "very satisfying," experience.
"We've had our differences, and we sit down and iron them out face to face, and I think the relationship has actually grown a little bit stronger and works very well," Threlkeld said.
Rainy River also continues to explore its TPK property, a joint venture with Northern Superior Resources, located 470 kilometres northeast of Thunder Bay, near the Ring of Fire.
TPK exhibits similar characteristics to the Rainy River deposit, with a similar-sized gold anomaly, and Threlkeld is optimistic about its potential.
After successful year-long negotiations with the nearby Neskantaga First Nation, a camp and crew was to be mobilized in early January to start drilling.
The deposit at RRGP currently sits at 6.7 million measured, indicated and inferred ounces combined, but after experiencing growth year after year, Threlkeld believes the possibilities for RRGP remain open.
"We're still growing, and we have the ability to put it into production and make a very, very nice mine."
Rainy River Resources
Raymond Threlkeld, president and CEO
Exploration budget 2012: $60 to $70 million
Exploration focus: Rainy River gold district
By LINDSAY KELLY
Northern Ontario Business