Drill Tracker Weekly: Integra’s Step-out Drilling Extends Triangle Zone at Lamaque South

Drill Tracker Weekly is not exclusive to Resource Investing News and is published with permission from Mackie Research Capital Corporation. It highlights drilling results in context with our database of over 10,000 drilling and trenching results. The purpose of this report is to highlight drilling and trenching results that stand out from the pack and compare them to their peer group. This report does not constitute initiation of coverage or a recommendation.

Integra Gold (TSXV:ICG)

Price: $0.35

Market cap: $85 million

Cash estimate: $9.5 million

Project: Lamaque South

Country: Canada

Ownership: 100 percent

Resources: 2.65 million tonnes at 9.5 g/t gold indicated; 0.78 million tonnes at 10.9 g/t gold inferred

Project status: advanced exploration

• Integra Gold announced high-grade intervals from step-out drilling on the Triangle Zone at its 100-percent-owned Lamaque South gold project in the Abitibi greenstone belt in Val-d’Or, Quebec. The project is adjacent to the past-producing, 4.6-million-ounce Lamaque mine and the 4.5-million-ounce Sigma mine, previously operated by Teck (TSX:TCK.B) and Placer Dome. In October 2014, the company purchased the fully permitted 2,200-tonne-per-day Sigma mill and tailings facility for C$8 million.

• Highlights from the recent step-out drilling include: 10 meters grading 14.79 g/t gold from the T1 Zone and 8 meters of 11.47 g/t gold and 5 meters of 15.55 g/t gold from the T10 Zone. Hole TM-15-05 extends the T10 zone 150 meters down dip of existing drilling, while TM-15-08 extends the zone an additional 180 meters from TM-15-05, totaling 330 meters of down-dip extension. The two intervals start at core depths of 674 and 795 meters, respectively (600 and 730 meters vertically below surface).

• Using a cut off of 5 g/t gold and a US$1,175 gold price, the company has outlined an indicated resource estimate of 2.6 million tonnes grading 9.5 g/t gold, with an additional 0.78 million tonnes of 10.9 g/t gold in the inferred class. Over 70 percent of the indicated resource is hosted within the higher-grade Triangle and Parallel zones.

• Using a US$1,175-per-ounce gold price, the January 2015 PEA outlines a small-capex project with an estimated pre-production capital cost of $61.2 million, returning an after-tax NPV (5 percent) of $113.5 million, an IRR of 59 percent and a payback of 1.6 years on the 4.5-year mine life. The operating cash, plus sustaining cost per ounce, is estimated at $641 per ounce.

Development history: past production of 9.1 million ounces of gold on Sigma and Lamaque mines; Lamaque South acquired 2009, Sigma/Lamaque North acquired October 2014

Current holes: 10 meters at 14.79 g/t gold; 8 meters at 11.47 g/t gold

Risks Analysis

Data contained in DRILL TRACKER WEEKLY is based on early stage exploration activity. The results are obtained at the very early stages of exploration and therefore, individual results may not be reproducible with additional trenching or drilling, nor may the results ultimately lead to the discovery of an economic deposit. Delineation of a resource body requires an extensive data gathering exercise according to guidelines set out in National Instrument 43-101 before investors can be reliably assured of a competent body of mineralization that may be of economic interest. DRILL TRACKER WEEKLY is designed to highlight individual trench or drill results, which stand out as being materially anomalous and are particularly worth of note – a type of early warning flag for a particular property that warrants further attention. Hence, DRILL TRACKER WEEKLY does not provide a recommendation to buy, sell or hold a specific equity – it is an information reference source to help quantify the meaning and relevance of early stage exploration results. 

Relevant Disclosures Applicable to: Drill Tracker Weekly

1. The research analyst or a member of the research analyst’s household owns and/or has options to acquire shares of the subject issuer. At the date of this release the author, Wayne Hewgill, owns shares in the following company: Fission Uranium Corp. (TSX.FCU)
2. Integra Gold Corp. (ICG) is currently under coverage at Mackie Research Capital by analyst Peter Campbell
3.  In March 2014, Peter Campbell visited the Lamaque Gold Project in Val-d’Or, Québec. Travel to and from the site in Val d’Or were paid by Integra Gold Corp. 

Analyst Certification

I, Wayne Hewgill certify that the information in this report is sourced through public documents that are believed to be reliable but accuracy and completeness as represented in this report cannot be guaranteed. The author has not received payment from any of the companies covered in this report. This report makes no recommendations to buy, sell or hold. Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.