Integra Resources (ITR.V, ITRG) has released drill results from two holes drilled on the Sullivan Gulch deposit (located east-southeast of the DeLamar deposit) and some of the results are quite spectacular. The first hole, 226, was decent enough with 12 meters of 1.4 g/t gold-equivalent consisting of 0.54 g/t gold and 66.42 g/t silver but hole 227 appeared to be more exciting with several high grade intervals.
In hole 22-227, the drill bit intersected three separate zones of high-grade mineralization with 9.14 meters of 10.75 g/t gold-equivalent starting at a down-hole depth of 205 meters followed by 12.2 meters containing 4.01 g/t AuEq starting at a depth of almost 245 meters downhole and 7 meters of 8.4 g/t gold-equivalent at a depth of 313 meters downhole.
Sullivan Gulch is the area where most of the ‘easy’ upside can be found in terms of resource expansion and adding more ounces to the mine plan. The ongoing drill program at Sullivan Gulch aims to test the high-grade vein systems which underlie the already known mineralization. As those veins have barely been explored to date it is encouraging to see there appears to be some juice in those veins which are completely outside of the open pit designed for the pre-feasibility study. That’s important as the milling portion of the pre-feasibility study barely adds value in the presented scenario using $1650 gold, mainly due to the upfront capex to build the mill. But as that is a sunk cost, every additional ounce that could be added to the mine life will add a disproportional amount of value to the NPV of the non-oxide mining scenario.
We are working on an update report on Integra Resources centering around the heap leach phase of the project as the market seems to be underestimating the economics of the heap leach phase on a standalone basis.
Disclosure: The author has a long position in Integra Resources. Integra is a sponsor of the website. Please read our disclaimer.
