Integra doubles indicated gold resource at Triangle

Integra Gold (TSXV: ICG; US-OTC: ICGQF) has doubled the gold ounces of the Triangle deposit at its 100% owned Lamaque gold project in Val-d’Or, Quebec.

The March 2017 estimate shows — using a 3-gram gold cut-off — indicated resources increased 100% from 737,590 oz. to 1.47 million ounces (6.3 million tonnes grading 7.32 grams gold per tonne). Inferred resources fell 1% to 991,800 oz. at 5.67 grams gold.

At a higher cut-off of 5 grams gold, indicated ounces jumped 105% from 580,150 to 1.19 million (4 million tonnes at 9.24 grams gold). Inferred resources dropped 15% to 631,200 oz. at 7.85 grams gold.

The new estimate highlights gains in the indicated resource at both cut-offs. The average grade at both cut-offs improved (4% at 3 grams gold and 3% at 5 grams gold), Raymond James analyst Tara Hassan writes.

Integra Gold’s senior vice-president of exploration Hervé Thiboutot (front) explains the geology of the Triangle and No. 4 Plug gold deposits to analysts and investors during a site visit in July. Photo by Lesley Stokes.

The updated resource incorporates 117,000 metres of new drilling completed at Triangle in late 2015 and 2016, with 75% of that drilling being infill. The effective date of the estimate is Jan. 11, 2017, with Integra noting it has since drilled another 15,000 metres in 75 holes at Triangle.

This is the third resource estimate for Triangle since Integra recognized the steeply dipping (45- to 75-degree) C-structures and their relationship with the flatter (25- to 55-degree) C-splay structures, the company says.

Haywood analyst Kerry Smith says that 67% of the new indicated resource (at a 3-gram cut-off) lies within the C-structures, which have an average true thickness of 3.7 metres, making it “perfect for cheaper long-hole mining.” The C-splay structures, which have an average true thickness of 2.6 metres, account for the rest of the indicated resource.

The recent increase in the indicated resource “derives from successful infilling of the C2 and C4 structures, while showing upside to convert and expand C5 inferred ounces,” BMO analyst Andrew Mikitchook says.

The Triangle deposit contains 75% of Lamaque’s current global resource of 1.92 million indicated oz. and 1.34 million inferred oz., at a 3-gram cut-off.

Integra intends to use a variable cut-off grade ranging between 4.5 grams and 5.5 grams depending on the deposit at Lamaque, Smith notes. Along with Triangle, the project has five other deposits: the No. 4 plug, Parallel, No. 6 vein, Fortune and Sixteen.

Integra Gold CEO Stephen de Jong at the 2016 Gold Rush Challenge finale in Toronto. Photo by George Pimentel Photography.

On Feb. 27, Integra tabled an updated preliminary economic assessment (PEA) for Lamaque, where it envisioned extracting gold through underground mining from the Triangle, Parallel and No. 4 plug deposits. Annual production should range between 123,000 and 155,000 oz. over a 10.5-year mine life. Expected start-up costs are $175 million, with all-in sustaining costs of $824 per ounce.

While the PEA used the November 2016 resource estimate for Lamaque, Integra says the updated Triangle resource does not affect the study’s “validity or currency.” It says, however, the update supports the potential to increase the project’s mine life or throughput — something that it will assess in future studies.

“We are especially encouraged by the substantial upgrade in indicated resource grade, width and total ounces of the near-surface C2 structure, which accounts for most production in the early years of the proposed mine plan,” Stephen de Jong, Integra’s president and CEO, said in a release.

Year-to-date, Integra has finished 22,884 metres of infill and extension drilling 102 holes at Lamaque, of which 75 holes went into Triangle.

Integra has five drills turning, including three at Triangle, one at Plug No. 4, and one at the Lamaque Deep target. The 2017 drill campaign includes at least 71,000 metres of surface drilling, where the focus will stay on Triangle and Plug No. 4, as well as testing high-impact targets, including Lamaque Deep and others found during the 2016 Gold Rush Challenge, Integra says.

The junior also intends to drill 10,000 metres underground using the Triangle exploration ramp. Integra has finished 750 metres of that ramp, noting it should reach the C2 structure of the Triangle deposit in April.

The underground drilling, expected shortly, will target the C2 structure at 10-metre centres in the bulk sample area.

Integra plans to start the 5,000-tonne bulk sample in the second quarter. It also expects to publish a resource update on the Sigma deposit, 3 km northwest of Triangle.

Integra closed March 22 up 6.4% at 83¢ per share, within a 52-week range of 42¢ to 96¢. It has $38 million cash-on-hand.