Integra Resources (ITR.V, ITRG) has released an additional batch of drill results, this time from 21 holes of the total of 321 holes that were drilled into the stockpiles and backfill zones. The 21 holes the company reported on included about 860 meters of drilling (indicating the average depth of the holes was just over 40 meters). The total 321 hole drill program consisted of just under 12,600 meters of drilling.
If anything, the updated results confirm the consistency of the mineralization, both in terms of thickness and grade and although the company still has to provide an official update, it looks like Integra was successful in confirming the size and grade of the stockpiles and backfill material. The company initially estimated a total of 60 million tonnes could be mineralized with an average grade that would exceed the cut-off grades and we argued that if even only half of that tonnage could be added to the resource at a grade of 0.30 g/t gold, the 200-225,000 additional recoverable ounces of gold in the mine plan could boost the NPV and IRR of the proposed open pit heap leach economic scenario. Let it be clear we are talking about ‘potential’ here, and all data mentioned are our own interpretations and guesstimates and are not the company’s official guidance or estimates.
Keep in mind we need to see more drill results before being sure. The assay results from 226 additional holes still have to be released but seeing how consistent the grades are in the first 95 holes that have been released so far, we don’t expect any major issues to convert at least half of the 60 million tonnes into resource estimate.
And with the gold price consistently exceeding $1900/oz, the sulphide expansion could come back into play again as well as the economics would change drastically and dramatically compared to using $1600 gold as a base case scenario. We don’t expect the company to shift gears again as the message should remain clear: DeLamar should still be seen as a heap leach only project.
Disclosure: The author has a long position in Integra Resources. Integra is a sponsor of the website. Please read our disclaimer.
