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Drillers struggle with sub-zero temps at Livengood mine

LIVENGOOD - Jim Downey and Dan Lien spent one early March afternoon on a sub-zero, windy day working to free a section of frozen drill pipe at the hillside drill pad overlooking the Elliott Highway.

The two drillers' helpers, part of the Butte, Mont.-based AK Drilling Inc. crew running a reverse circulation rig at the Livengood gold project, took turns pounding on frozen water surrounding the drill stem.

The drill rig broke a hydraulic hose the previous day, stopping progress of the underground mineral resource sampling program. Now, Downey and Lien were trying to chip away frozen material from the drill pipe at the surface, while waiting for the replacement hose.

"Cold weather," Downey said, when asked about the drawbacks of winter drilling in Interior Alaska. "You're using water, so everything is freezing up all the time."

Since early February, he and other drillers have been working at Livengood, an historic mining camp and the site of recent hard rock exploration efforts, located about 70 miles north of Fairbanks. The reverse circulation drill crews are working on several key areas previously untapped by the gold project's prospector, Denver-based International Tower Hill Mines Ltd.

 
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"We're experienced with winter drilling. It's not easy, but it's not an undoable thing, and it seems to be working pretty well," said Jeff Pontius, president and CEO of International Tower. "Certainly it is challenging from the standpoint of people and equipment you have to have out in winter weather."

Access to several pockets of potential mineralized areas within the Livengood exploration target has been previously prevented in summer months, due to damp ground conditions. That's despite the location on a southwestern slope located several hundred feet in elevation above the nearby Elliott Highway corridor.

 

Winter drilling of these areas, typically boggy during summer, will provide critical information needed to help International Tower evaluate the economic potential of a hard rock gold mine at Livengood.

The property's current estimates of indicated and inferred mineral resources contain a total of 9.72 million ounces of gold at a 0.3 gram per ton cutoff, or 0.009 ounces of gold per ton of rock. That resource estimate is based on exploration work conducted in 2008, totaling 173 drill holes and 10 trenches.

Contained within the existing, slightly oblong resource area are sections of undrilled ground, where exploration crews are working this spring. Already, drill results from the first four holes have been released by International Tower, results indicating that the winter crew hit one of the best holes to date on the property.

One hole returned a 675-foot intercept grading 0.0459 ounces of gold per ton, including a 125-foot section that averaged nearly one-tenth of an ounce of gold per ton of rock. The results confirm the thickness and higher-grade nature of the core zone, the company said.

The second hole produced a 125-foot section grading 0.039 ounces per ton. Both drill holes, like many drilled in 2008, ended in significant gold mineralization, indicating the deposit is open at depth, the company said.

Results from two other holes were released in mid-March. Both were drilled in another target on the northeast portion of the resource area and both produced intercepts several hundred feet in length with mineralization equal to or greater than past drilling.

"We have yet to get our arms around this thing. We're getting into areas that may be better than what we've drilled before," Pontius said. "It's still pretty exciting times and the deposit is continuing to grow, so we're certainly pleased and waiting to see what other good surprises we have."

International Tower plans to incorporate results from the winter drilling program into a new geologic resource estimate, scheduled to be completed and released this summer. Additionally, the company plans to complete the project's first preliminary economic assessment for Livengood, which should also be released this summer.

Initially this winter, International Tower planned a 20,000-foot drilling program for February, March and April, ending with the spring thaw.

Thanks to a successful equity financing effort that closed in early March, which provided more than $10 million to International Tower, the size of the current winter and the planned summer drilling program was increased. A second drill rig was added in early March, and crews are working to complete more than 32,000 feet of reverse circulation samples.

"We're busily working away, trying to get as many holes in as we can," Pontius said.

At Livengood, the two different drilling companies working this winter are encouraged to work together, rather than competitively, according to Chris Puchner, International Tower's chief geologist at Livengood.

The amount of work, and related compensation for the two drilling contractors, will be limited more by the length of the winter season rather than completing a share of a set amount of drilling footage, which is more typical in a mineral exploration program.

This summer, a third drill rig will be added to the project. A total of nearly 100,000 feet of drilling is budgeted for this summer's program at Livengood, the company said.

The spending plan for Livengood this year also increased, from the $4 million initially planned, to nearly $8 million anticipated for the entire year, according to Pontius.

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