INTEGRA SET FOR 100,000
OUNCES PER YEAR AT CASH
MARGINS OF +$1000/OZ
Plant upgrade completed ahead of schedule will take full
advantage of soaring gold price
http://www.stocknessmonster.com/news-item?S=IGR&E=ASX&N=553182
DasMünz
INCREASED 94% TO 480,000 OUNCES
RANDALLS ORE RESERVE
INCREASED 94% TO 480,000
OUNCES
MINE LIFE EXTENDED TO 6 YEARS AT EXPANDED MILL RATE
FROM FOUR OPEN PIT SOURCES – UNDERGROUND
PRODUCTION POTENTIAL NOT YET INCLUDED
Highlights
* Randalls Gold Project Ore Reserves estimate increased to 6.0 million tonnes at
2.5 g/t gold for a contained 480,000 ounces net of mining depletion to 30 June
2011
* Increased Ore Reserves of 94% or 230,000 ounces
* Ore Reserves based on four open pit sources only – potential underground
production is not yet included in current Ore Reserves
* Life of Ore Reserve cash cost estimated to be $685 per ounce, with a ~$800
per ounce operating profit margin further enhancing Integra’s position as one
of Australia’s most profitable gold miners
* Financial Year 2012 forecast cash cost of production $550 per ounce
* If only open pit Ore Reserves were processed - without the introduction of
high-grade underground production - mine life extended to 6 years at an
upgraded processing rate of 1 million tonnes per year
* Ore Reserves do not include the high-grade Lucky Bay, Spice, Fly Camp /
Anomaly C gold deposits or northern extensions to the recently discovered
Majestic gold deposit to be added to Ore Reserves at a later date
* 1.4 years of stockpiled medium-grade ore
* Increasing gold production and extended mine life provides Integra with a very
solid platform to capitalise on immense exploration upside and other growth
opportunities
Integra Mining Limited (ASX:IGR, ‘Integra’) is pleased to report that open pit Ore Reserve
estimations have been completed for existing and new gold deposits, including a preliminary
Ore Reserve estimate for the recent Majestic discovery. This Ore Reserves upgrade comes less
than 1 year after the first gold pour at the Randalls Gold Project.
The proportionally large Ore Reserves upgrade and the meaningful extension of mine life is
consistent with Integra’s long stated strategy of establishing a robust operation based upon an
initial modest yet highly profitable Ore Reserve (see ASX releases 24 July 2009 and 25 January
2011), and then progressively adding to Ore Reserves using cashflow from operations.
Integra is targeting 100,000 ounces per year production from an upgraded processing facility
at Salt Creek with the upgrade expected to be completed next month. A further increase to
120,000 ounces per year of steady state production – spiking at 140,000 ounces per year – is
expected when high-grade underground production is established to compliment these open pit
Ore Reserves.
Integra’s Managing Director Chris Cairns said: “This Ore Reserve upgrade provides a very solid
foundation for further growth and continues Integra’s track record of delivering on its
promises. While the highly profitable 6 year mine life on open pit Ore Reserves alone is very
robust, the real value driver will be the outcome of trial underground mining at the high-grade
Cock-eyed Bob gold deposit later this year. If successful, this would catalyse the progressive
development of the high-grade Cock-eyed Bob, Santa and Maxwells gold deposits as
underground operations capable of materially increasing annual gold production from the
Randalls Gold Project and extending mine life to ten years.”
Randalls Gold Project Open Pit Ore Reserves
Total open pit Ore Reserves for the Randalls Gold Project as at 1 July 2011 are 6.0 million
tonnes at 2.5 g/t for 480,000 ounces. The Salt Creek processing facility is currently
undergoing an upgrade, on-schedule to be completed in August, to 1 million tonnes per year
throughput capacity. At the expanded process facility capacity, the Randalls Gold Project now
has over 6 years of mine life sourced from open pits alone. However, it is the Company’s
intention to develop additional high-grade underground production sources which would
significantly extend the current open pit Ore Reserve life.
The upgrade includes an updated open pit Ore Reserve for the Salt Creek gold deposit
(150,000 ounces net of production depletion of 53,000 ounces), a revised open pit Ore
Reserve for the Maxwells gold deposit (an increase of 46,000 ounces to 144,000 ounces) and a
preliminary Ore Reserve for the Majestic open pit (98,000 ounces attributable to Integra) and
the Harry’s Hill open pit (86,000 ounces).
Estimated cash cost of production for the aggregate 480,000 ounce Ore Reserve estimate is
$685 per ounce confirming Integra’s position as one of Australia’s most profitable gold miners
with, at current gold prices, a life of mine operating profit margin of ~$800 per ounce.
Clearly, as lower cost deposits are added to the Ore Reserve (for example the Lucky Bay
deposit) they will be preferentially scheduled for mining ahead of higher cost deposits. Integra
has provided guidance for the current financial year to June 2012 of a cash cost forecast of
~$550 per ounce (see ASX release 10 June 2011). Should Integra have further exploration
success translating into additional Ore Reserves over the next 6 years (with a $23 million
exploration budget for this year), those new Ore Reserves would likewise be scheduled for
production with a view to maximising profit.
Sources of Future Ore Reserve Upgrades
The recent outstanding drill results including 18.9 metres at 9.84 g/t gold from 12.8 metres
depth at the Lucky Bay deposit, while very exciting, are outside the Mineral Resource
boundaries necessitating a reinterpretation of the mineralisation outlines and will require
additional drilling in follow-up to these results. Consequently, the Lucky Bay deposit has not
been included in the current Ore Reserve upgrade. Additional sources for near-term open pit
Ore Reserve upgrades also include northern extensions to the Majestic gold deposit and the
Spice, Anomaly C / Flycamp, and Santa gold deposits.
Underground Production Potential Targeting 50% of Production
While the Ore Reserves status of the Randalls Gold Project is on a very firm foundation from
open pit production sources alone, it is Integra’s intention to demonstrate the viability of
underground mining at three high-grade banded iron formation (BIF) hosted gold deposits at
Cock-eyed Bob, Santa and Maxwells. Trial underground mining at Cock-eyed Bob is planned to
commence development in the December quarter. If commercially successful, underground
mining will continue to the next level at Cock-eyed Bob and underground development at the
Santa gold deposit will commence. Upon completion of open pit mining operations at the
Maxwells gold deposit, underground development would commence from the base of the open
pit.
Subject to successful completion of the trial mining exercise, the objective within a two year
period is to have 50% of the process facility feed being provided by underground sources at an
expected grade of 5-6 g/t gold. This will be blended with open pit production ore and
stockpiled ore to maintain a 3-4 g/t gold head grade presented to the process facility. By
supplementing the process facility with 50% of feed from underground sources, the life of the
remaining open pit Ore Reserves is effectively doubled. In this way, without any additional
discovery, Integra is targeting a 10 year mine life at the Randalls Gold Project.
Exploration
Integra has historically been one of the most active explorers in the Australian gold sector.
The current year’s budget for exploration and Mineral Resources to Ore Reserves conversion is
approved at $23 million with additional discretionary expenditure as needed upon success.
Integra has made two discoveries within a three-year period – Salt Creek which is currently in
production and Majestic which has a preliminary Ore Reserve included in this announcement.
Following a major exploration review and target appraisal process earlier this year, Integra is
now focussed on five main areas for discovery:
* The recent Queen LaPage JV with Rubicon Resources;
* The Majestic region outside the discovery zone;
* The Mt Monger area;
* The Salt Creek region outside the known deposit; and,
* The ‘SIRO’ target zone in the Aldiss Project and the Eraynia JV with Image Resources.
Integra has a large number of quality targets which will be aggressively tested over the
coming year.
Yours sincerely,
Chris Cairns
Managing Director
DasMünz
Continuity of High-grade Mineralization
Integra Mining Limited schnitt bei dem Lucky-Bay-Prospekt erneut hochgradiges Gold. Lucky Bay befindet sich nur 4 km südlich von der Verarbeitungsanlage des Randalls-Goldprojekts in der Nähe von Kalgoorlie in Westaustralien.
Im Februar hatte Integra eine erste abgeleitete Ressource (JORC) von 25.000 oz für die Lucky-Bay-Lagerstätte gemeldet. Die aktuellen Bohrungen weisen auf eine Vergrößerung der Ressource hin.
Zu den Höhepunkten der neuen RC- und Diamantbohrungen gehören:
• 17,8 m mit 6,53 g/t Gold ab 42 m
darin: 4,1 m mit 14,56 g/t Gold ab 44,4 m
• 18,9 m mit 9,84 g/t Gold ab 12,8 m
darin: 2 m mit 37,02 g/t Gold ab 20,4 m und
3 m mit 16,50 g/t Gold ab 23 m
• 13,55 m mit 4,46 g/t Gold ab 32,8
darin: 1 m mit 20,57 g/t Gold ab 37,2 m
• 7 m mit 4,36 g/t Gold ab 19 m
