International Tower Hill Mines (ITH) has released an updated resource estimate for its Livengood gold project 115 km northwest of Fairbanks, Alaska, that significantly expands surfacemine mineralization to 16.5 million oz of gold in measured and indicated resources and 4.1 million oz of gold in inferred resources. At the same time, ITH reported the results of an updated preliminary economic assessment for the project that considers production of 664,000 oz/y of gold over the first five years of operation and an average of 562,000 oz/y over a mine life of 23 years.

Capital costs to develop such a project are estimated at $1.61 billion, including $323 million in contingency and owner's costs. Cash costs of production are estimated at $557/oz of gold over the first five years of production and an average of $703/oz life-of-mine.

ITH has said it defined its mineral resources using economic parameters envisioned for a large surface-mining operation and a long-term gold price of $1,400/oz. The geometry of the currently defined, shallowly dipping, outcropping deposit enables development of a mine capable of generating significant production economies of scale. The assumed nominal mining rate is 70 million mt/y, and the plant processing rate is projected at 91,000 mt/d, using conventional SAG and ball milling followed by gravity and flotation circuits for concentration and CIL recovery of gold.

Ongoing metallurgical studies will focus on optimizing the various unit operations, reagent suites, grind size and leach residence time requirements. Improvements in each of these individual variables have the potential to make significant positive impacts on project economics.

ITH is carrying out a 28,000-m re-source-growth drill program during its current fiscal year, beginning June 1, 2011.

The program includes both in-fill and step-out drilling to test resource expansion potential both laterally and at depth.

A 10,800-m geotechnical drill program is also under way to determine suitable locations for site facilities. Results from this program will also aid in district-wide exploration activities, which are being carried out by a 6,200-m drill program on less-explored regions of the 145-km2 Livengood land package.

ITH cautions that the current economic assessment is preliminary in nature and is based on technical and economic assumptions that will be evaluated further in a prefeasibility study. The company expects to complete a prefeasibility study of the Livengood project by mid-November 2011.