Integra Resources (ITR.V, ITRG) will be finishing its drill program on the stockpiles and backfill of the historical mines at DeLamar and Florida Mountain soon as the company has already completed about 11,300 meters of drilling in 289 holes, exceeding the initial plans to drill 11,000 meters. The current drill program has now tested a large portion of the approximately 60 million tonnes in stockpiled and backfilled material and as mentioned before, even if ‘only’ 30 million tonnes at 0.30 g/t gold and 15 g/t silver could be added to the economics of the project, the mine life of the heap leach scenario
There aren’t a whole lot of surprises in the recently announced assay results (highlights below), and that’s fine as the stockpiles and backfilled areas were supposed to be pretty consistent in terms of grade and relative thickness.
And while the focus has recently been on expanding the leachable resources to expand the mine life and increase the amount of recoverable ounces in the heap leach scenario. But keep in mind the ‘optionality’ of also mining and processing the sulphides does come into play at the current gold and silver price. Looking at the sensitivity analysis as provided in the pre-feasibility study which was published last year, the after-tax NPV5% of the scenario including the construction of a mill (which was not realistic in a $1700 gold scenario), the situation looks very different at $1900 gold and $24 silver as the after-tax NPV5% increases by in excess of US$200M.
While it would be nice to see confirmation and to see a strong gold price throughout the year, the optionality provided by the project could prove its value in the current precious metals price environment.
Integra and Millennial Precious Metals (MPM.V) are in the final stages of consummating the merger. The vote for the Millennial shareholders is scheduled for April 26th. Integra shareholders don’t have to vote on the deal.
Disclosure: The author has a long position in Integra Resources and Millennial Precious Metals. Integra Resources is a sponsor of the website. Please read our disclaimer.
