Integra Resources (ITR.V, ITRG) has wrapped up its stockpile drill program at DeLamar a while ago and released the assay results from the final holes earlier this week. The update contains the results of 145 holes for a total of 4,244 meters of drilling which is a substantial part of the 321 hole drill program for a total of in excess of 12,500 meters.
As you know, Integra’s plan was to thoroughly explore the backfill and stockpiles that are currently present on the DeLamar project to expand the mine life of the heap leach portion of the project. Integra initially expected to find up to 60 million tonnes of gold and silver mineralized material and expected this material would be amenable for heap leaching.
Now all data has been received, Integra will be in a position to release a resource update pretty soon. The company mentioned it is aiming for the resource update to be published in the current quarter and the updated resource will include all recently completed 321 holes. There obviously is no guarantee the company will be able to add 60 million tonnes of low-grade mineralization to the mine plan, but the grades and thicknesses of the stockpiles are surprisingly consistent which means it would just be a large earth moving exercise without any stripping requirements. So as long as the recoverable rock value per tonne exceeds the excavating, processing and transportation costs (and G&A of course), odds are the mineralization will end up on the leach pad and should provide a boost to the NPV despite the relatively high discounting factor towards the end of the mine life. Applying a 5% discount rate (which now sounds absurdly low in the current interest rate climate), every dollar of net cash flow generated in year 9 would have to be discounted by a factor of 1.55 and would add just 65 cents to the NPV.
And that’s fine, of course. Every dollar of added value will be very welcome and will make the project more appealing from a development perspective.
Disclosure: The author has a long position in Integra Resources. Integra is a sponsor of the website. Please read our disclaimer.
