Rainy River Resources Announces 5.72 Million Ounces of Gold in Measured and Indicated Resources, and 2.25 Million Ounces of Gold in Inferred Resources

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TORONTO, ONTARIO--(Marketwire -02/24/12)- Rainy River Resources Ltd. ("Rainy River" or the "Company") (TSX: RR.TO - News) is pleased to announce an updated mineral resource statement for the Rainy River Gold Project ("RRGP") in northwestern Ontario. Mineral resources were estimated by SRK Consulting (Canada) Inc. ("SRK") and are reported in accordance with Canadian Securities Administrators National Instrument 43-101. The consolidated mineral resource statement for the RRGP is tabulated in Table 1. Resources are reported at the same elevation as the PEA study (approximately 500 m below surface) and the same cut-off grades as those reported in the June, 2011 mineral resource statement.

HIGHLIGHTS

 

--  Measured and Indicated mineral resources of 5.72 million ounces of gold,
    12.01 million ounces of silver
--  Inferred mineral resources of 2.25 million ounces of gold, 6.77 million
    ounces of silver
--  Measured and Indicated mineral resources increase 30% for contained gold
    and 32% for contained silver ounces, driven by a 28% increase in
    tonnage.


Table 1. Consolidated Mineral Resource Statement(i), Rainy River Gold
Project, SRK Consulting, February 24, 2012.

In pit resources(ii)
----------------------------------------------------------------------------
                          Tonnes    Au            Au       Ag            Ag
                        ('000's)    g/t   ('000's) oz      g/t   ('000's) oz
----------------------------------------------------------------------------
Measured                  23,154   1.29           960     2.00         1,491
----------------------------------------------------------------------------
Indicated                112,778   1.09         3,963     2.39         8,673
----------------------------------------------------------------------------
Measured & Indicated     135,932   1.12         4,923     2.33        10,164
----------------------------------------------------------------------------
Inferred                  22,679   0.93           675     2.18         1,588
----------------------------------------------------------------------------

Out of pit resources(ii)
----------------------------------------------------------------------------
                          Tonnes    Au            Au       Ag            Ag
                        ('000's)    g/t   ('000's) oz      g/t   ('000's) oz
----------------------------------------------------------------------------
Indicated                 11,476   0.81           298     3.37         1,242
----------------------------------------------------------------------------
Inferred                  64,437   0.67         1,387     2.35         4,871
----------------------------------------------------------------------------

Underground resources(ii)
----------------------------------------------------------------------------
                          Tonnes    Au            Au       Ag            Ag
                        ('000's)    g/t   ('000's) oz      g/t   ('000's) oz
----------------------------------------------------------------------------
Measured                     108   4.97            17     3.89            13
----------------------------------------------------------------------------
Indicated                  3,340   4.51           484     5.53           594
----------------------------------------------------------------------------
Measured & Indicated       3,448   4.53           501     5.48           607
----------------------------------------------------------------------------
Inferred                   1,376   4.14           183     7.03           311
----------------------------------------------------------------------------

Combined Resources: In pit, Out of Pit and Underground(ii)
----------------------------------------------------------------------------
                          Tonnes    Au            Au       Ag            Ag
                        ('000's)    g/t   ('000's) oz      g/t   ('000's) oz
----------------------------------------------------------------------------
Measured                  23,262   1.31           977     2.01         1,504
----------------------------------------------------------------------------
Indicated                127,594   1.15         4,745     2.56        10,509
----------------------------------------------------------------------------
Measured & Indicated     150,856   1.18         5,722     2.48        12,013
----------------------------------------------------------------------------
Inferred                  88,492   0.79         2,245     2.38         6,770
----------------------------------------------------------------------------
(i)Mineral resources are reported relative conceptual pit shells. On
average, the open pit extends to an elevation of 500 metres below surface.
Mineral resources are not mineral reserves and do not have demonstrated
economic viability. All figures are rounded to reflect the relative accuracy
of the estimate. Figures may not add due to rounding. All assays have been
capped where appropriate.

(ii)Open pit mineral resources are reported at a cut-off grade of 0.35 g/t
gold, underground mineral resources are reported at a cut-off grade of 2.5
g/t gold based on a gold price of US$1,100 per ounce, a silver price of
US$22.50 per ounce, a foreign exchange rate of 1.10 Canadian dollars to 1.0
US dollar, gold recovery of 88% for open pit resources and 90% for
underground resources with silver recovery at 75%.

Table 2. Comparison Between the June 2011 and February 2012 Mineral Resource
Statement.

----------------------------------------------------------------------------
Percentage change from
 June 2011               Tonnes   Au grade  Au ounces   Ag grade  Ag ounces
----------------------------------------------------------------------------
Measured                     48%         2%        50%         4%        53%
----------------------------------------------------------------------------
Indicated                    25%         1%        26%         3%        29%
----------------------------------------------------------------------------
Measured & Indicated         28%         1%        30%         3%        32%
----------------------------------------------------------------------------
Inferred                     14%       -16%        -4%       -16%        -4%
----------------------------------------------------------------------------

COMMENTARY

Raymond Threlkeld, President & CEO of Rainy River Resources Ltd., commented: "We are very pleased to announce the results of our latest mineral resource update for the Rainy River Gold Project following one of the largest exploration programs in Canada. The new mineral resource statement incorporates 394 new core holes (170,000 metres) in 2011, for a total resource base of 1,279 diamond drill holes (578,261 metres). The results demonstrate the success of our intensive 2011 program in improving the quantity and quality of our resource database, de-risking the project for development, and identifying new areas for growth."

"Combined open pit and underground mineral resources in the Measured & Indicated ("M&I") categories total 5.72 million ounces of gold and 12.01 million ounces of silver, while combined Inferred resources total 2.25 million ounces of gold and 6.77 million ounces of silver. Relative to the June, 2011 mineral resource statement, M&I mineral resources increased by 1.31 million ounces of gold and 2.89 million ounces of silver, representing increases of 30% and 32%, respectively. Inferred mineral resources are comparable to the June, 2011 mineral resource statement, and provide a basis for future exploration targets and conversion to higher confidence ounces."

"A key focus of the 2011 drill program was to convert inferred mineral resources into Measured or Indicated within the conceptual pit shells. We now see a significant improvement in open pit Measured & Indicated mineral resources, with 136 million tonnes grading 1.12 g/t gold and 2.33 g/t silver, for 4.92 million ounces gold and 10.16 million ounces silver reported. As previous Inferred ounces moved to the Measured and Indicated category, grades improved, showing the value and effectiveness of the infill drilling."

"The underground portion of the Rainy River Gold Project has now expanded to 501,000 ounces of gold in the Measured and Indicated categories, for an increase of 72% compared to June, 2011 estimate, and this resource remains open at depth."

"Currently, 12 diamond drill rigs are active at the Rainy River Gold Project, with 150,000 metres of drilling planned for 2012, to complete the remaining infill program in the open pit and underground areas, to conduct condemnation drilling for site facilities, and to progress with regional exploration along a prospective 6 km-long trend. This resource update incorporates assay results and data received up to December 16, 2011. The next resource update is expected ahead of the commencement of our feasibility study, in mid-2012, and will incorporate new drill information from the first few months of 2012."

Sensitivity Analysis:

Block model quantities and grade estimates at the Rainy River Gold Project are sensitive to the selection of cut-off grades. The sensitivity of block model quantities for open pit and underground material to gold cut-off grades is presented in Tables 3 and 4, below.

 


Table 3. Block Model Quantities and Grade Estimates(i) at Selected Cut-off
Grades - Potential Open Pit Mining Material

----------------------------------------------------------------------------
Cut off grade             Tonnes    Au            Au       Ag            Ag
0.30 g/t Au             ('000's)    g/t   ('000's) oz      g/t   ('000's) oz
----------------------------------------------------------------------------
Measured                  25,598   1.20           985     1.96         1,610
----------------------------------------------------------------------------
Indicated (in pit)       131,527   0.98         4,158     2.31         9,759
----------------------------------------------------------------------------
Indicated (ex. pit)       14,468   0.71           330     3.18         1,479
----------------------------------------------------------------------------
Measured & Indicated     171,593   0.99         5,473     2.33        12,848
----------------------------------------------------------------------------
Inferred (in-pit)         27,444   0.82           725     2.00         1,763
----------------------------------------------------------------------------
Inferred (ex-pit)         84,153   0.59         1,602     2.19         5,913
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Cut off grade             Tonnes    Au            Au       Ag            Ag
0.40 g/t Au             ('000's)    g/t   ('000's) oz      g/t   ('000's) oz
----------------------------------------------------------------------------
Measured                  21,161   1.38           936     2.05         1,392
----------------------------------------------------------------------------
Indicated (in pit)        98,492   1.20         3,791     2.47         7,834
----------------------------------------------------------------------------
Indicated (ex. pit)        9,263   0.91           272     3.54         1,056
----------------------------------------------------------------------------
Measured & Indicated     128,916   1.21         4,999     2.48        10,282
----------------------------------------------------------------------------
Inferred (in-pit)         19,225   1.03           634     2.34         2,444
----------------------------------------------------------------------------
Inferred (ex-pit)         49,225   0.77         1,211     2.71         4,292
----------------------------------------------------------------------------
(i)The reader is cautioned that the data presented in this table should not
be misconstrued as a mineral resource statement. The figures are only shown
to illustrate the sensitivities of the block model quantities and grade
estimates to the selection of cut-off grade.

Table 4. Block Model Quantities and Grade Estimates(i) at Selected Cut-off
Grades - Potential Underground Mining Material

----------------------------------------------------------------------------
Cut off grade             Tonnes    Au            Au       Ag            Ag
2.0 g/t Au              ('000's)    g/t   ('000's) oz      g/t   ('000's) oz
----------------------------------------------------------------------------
Measured                     140   4.34            20     3.54            16
----------------------------------------------------------------------------
Indicated                  5,015   3.75           604     5.00           806
----------------------------------------------------------------------------
Measured & Indicated       5,155   3.76           624     4.96           822
----------------------------------------------------------------------------
Inferred                   2,114   3.47           236     6.23           423
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Cut off grade             Tonnes    Au            Au       Ag            Ag
3.0 g/t Au              ('000's)    g/t   ('000's) oz      g/t   ('000's) oz
----------------------------------------------------------------------------
Measured                      83   5.62            15     4.40            12
----------------------------------------------------------------------------
Indicated                  2,414   5.20           403     6.08           472
----------------------------------------------------------------------------
Measured & Indicated       2,497   5.21           418     6.03           484
----------------------------------------------------------------------------
Inferred                     957   4.74           146     7.13           220
----------------------------------------------------------------------------
(i)The reader is cautioned that the data presented in this table should not
be misconstrued as a mineral resource statement. The figures are only shown
to illustrate the sensitivities of the block model quantities and grade
estimates to the selection of cut-off grade.

Technical Description

Gold mineralization at the Rainy River Gold Project has a volcanogenic origin associated with minor amounts of copper, lead, zinc and silver. Sulphide zones are generally sub-parallel to foliation, which strikes at approximately 300 degrees and dips 50 degrees to 70 degrees to the south. These zones contain low grade gold mineralization. Higher grade gold mineralization is associated with shear zones that trend 20-30 degrees to the main foliation and plunge steeply to the south. The gold mineral resources are based on drilling data received up to December 16, 2011 and includes 1,279 drill holes (578,261 metres). Since the previous mineral resource estimate (see press release dated June 29, 2011), the Company has drilled and added 394 new core boreholes (170,000 metres) to the resource database. The Rainy River Gold Project hosts three types of sulphide mineralization: gold-rich polymetallic sulphide mineralization, for which resources are reported in this press release, subordinate silver-rich polymetallic sulphides and copper-nickel PGE sulphides. These other resources are not reported here, but will be included in a NI 43-101 Report that will provide details of this mineral resource statement.

Mineral resources are reported over an area measuring approximately 2 kilometres x 1 kilometre to a depth of 700 metres. Mineral resources have been estimated using a geostatistical block model approach constrained by seven major zones subdivided into 23 resource domains. Block size was set at cubes 5 metres in size. These zones are termed the ODM/17, 433, HS, New, Cap, 34, Western Area and other Zones. The bulk of the mineral resources occur in the ODM/17 and 433 Zones. Metal grades were estimated using ordinary kriging as the principal estimator. Metal grades were estimated separately in each domain from capped composite data within that domain. Kriging parameters were derived from variogram models with grade estimation completed in two successive passes. The first estimation pass is generally considered search neighbourhoods adjusted to full variogram ranges. The size of the search ellipse was usually doubled for the second estimation pass. Mineral resources are classified as Measured, Indicated and Inferred, considering the geological continuity, data quality, block distance from the nearest informing composites, and variography results.

A pit optimizer was used to determine the quantities of material offering "reasonable prospects for economic extraction" by an open pit. Results from the pit optimization are used solely for assisting with the preparation of the mineral resource statement and do not represent a thorough economic study as is required to evaluate mineral reserves. SRK considers that the material above the final depth of the conceptual pit shell (approximately 500 m below surface) offers reasonable prospects for economic extraction from an open pit, because ongoing drilling results suggest that the zone of gold mineralization is broader than currently modelled and that new drilling information should positively impact future pit optimizations. Input assumptions used for the conceptual pit optimization and to derive the cut-off grade of 0.35 g/t gold for open pit mineral resources include:

 

--  Gold price: US$1,100/oz. Silver price: US$22.50/oz
--  88% gold recovery, 75% silver recovery
--  Operating costs of C$2.00/t for mining, C$7.25/t for processing,
    including G&A
--  48 degree average pit wall angle

The block model quantities and grade estimates below pit bottom were also reviewed to determine the portions of the Rainy River deposit having "reasonable prospects for economic extraction" from an underground mine. Assumptions used to derive the cut-off grade of 2.5 g/t gold for underground resources include:

 

--  Gold price: US$1,100/oz. Silver price: US$22.50/oz
--  90% gold recovery, 75% silver recovery
--  Operating costs of C$55/t for mining, C$7.25/t for processing, including
    G&A

Qualified persons

Rainy River's exploration program in Richardson Township (part of Chapple Township) is being supervised by Kerry Sparkes, P.Geo., Vice-President Exploration, a Qualified Person as defined by National Instrument 43-101. Mr. Sparkes P.Geo. is also the person responsible for the content of this news release. The Company has a rigorous QA/QC program in place to ensure best practices in sampling and analysis of drill core. All drill core is marked for sampling and then split in half with a diamond saw blade. Samples are placed in sealed bags with security tags. All samples were assayed using a standard fire assay, 30 gram nominal sample weight with an AA finish. Over-limit samples were re-assayed with a gravimetric finish, and then by 1000 g screen fire assay as a check. Samples with visible gold were automatically analyzed for ore grade by 1,000g screen- fire assay, with coarse and fine fractions being combined proportionately and the fine fraction being assayed twice. Standards, blanks and duplicates are inserted every 25 metres. ALS Canada Ltd. performed primary assaying, with duplicates being analyzed at Activation Laboratories Ltd. ALS Canada Ltd. and Activation Laboratories Ltd. implement independent QA/QC protocols that include the insertion of certified blanks and standards as part of their routine analysis. Resource estimation work by SRK was completed by Dorota El-Rassi, P. Eng and Glen Cole, P.Geo, both employees of SRK and "independent qualified persons" as this term is defined in National Instrument 43-101.

About Rainy River

Rainy River Resources Ltd. is a Canadian precious metals exploration company whose key asset is the Rainy River Gold Project, a large gold system centred in Richardson Township (part of Chapple Township). As of September 30, 2011, the Company had $115 million in cash and securities, and is well funded for its 2012 plans to 1) commence a feasibility level study on the RRGP; 2) continue growing the existing resource through exploration; 3) conduct a condemnation program in areas identified for potential mine facilities; and 4) continue regional exploration. The Rainy River Gold Project is very well located in the southwestern corner of northern Ontario, near the U.S. border. It is accessed by a network of roads and is close to hydro-electric infrastructure. The Rainy River district has a skilled labour force and is one of the lowest-cost areas for mineral exploration and development in Canada. The Company is also working to advance the early-stage discoveries at its TPK Joint Venture Property, also in northern Ontario, where it has the right to earn a 51% interest in the property from Northern Superior Resources Inc. Ontario has low political risk and, according to the annual Fraser Institute global survey of the mining industry, has consistently ranked as one of the top jurisdictions embracing mineral development.

RAINY RIVER RESOURCES LTD.

Raymond W. Threlkeld, President & CEO

CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS

This release includes certain statements that may be deemed to be "forward-looking statements". All statements in this release, other than statements of historical facts, that address events or developments that management of the Company expects, are forward-looking statements. Although management believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and actual results or developments may differ materially from those in the forward-looking statements. The Company undertakes no obligation to update these forward-looking statements if management's beliefs, estimates or opinions, or other factors, should change. Factors that could cause actual results to differ materially from those in forward-looking statements, include market prices, exploration and development successes, continued availability of capital and financing, and general economic, market or business conditions. Please see the public filings of the Company at www.sedar.com for further information.

Contact:

Rainy River Resources Ltd.
Indi Gopinathan
Director, Investor Relations
416-645-7289
igopinathan@RainyRiverResources.com

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