Integra delays resource after drill hit

Integra Resources (TSXV: ITR; US-OTC: IRRZF) will delay an updated resource estimate for its DeLamar gold-silver project in southwestern Idaho after drill core from a step-out hole nearly half a kilometre from the project’s current resource assayed 2.53 grams per tonne gold equivalent over nearly 110 metres.

“Relative to everything we did in 2018, this one drill hole in particular is a real game changer for us in the grand scheme of things,” Integra president and CEO George Salamis says in an interview with The Northern Miner. “Because it’s such a big step out, ultimately with this hole, we think we’ve added a lot of resource potential.”

Hole 59, collared 400 metres from DeLamar’s current inferred resource and 260 metres from the nearest hole in the project’s Sullivan Gulch area, cut 109 metres grading 1.71 grams gold and 69.03 grams silver from 383 metres downhole. The hole ended in mineralization, with the last 20 metres averaging more than 4 grams gold equivalent — or four times the average grade of the project’s resource.

Integra’s vice president of exploration Max Baker at DeLamar. Credit: Integra Resources.

Integra had intended to release an update resource estimate for DeLamar during 2019’s first quarter, but has delayed it until 2019’s second quarter. The company still intends to table DeLamar’s previously planned preliminary economic assessment (PEA) in mid-2019.

“This is such a big step out, and the geology is so similar to everything else that we’ve intercepted to the north that we think we’ve really extended the zone out by a lot,” Salamis says.

The company recently resumed drilling at DeLamar. It drilled more than 20,000 metres at the project last year, and plans to drill a similar amount in 2019 from January to November. It has one drill turning at the project, but says it will add a second in February, and likely a third in April.

Eventually, it will task one drill with reconnaissance drilling on regional targets.

The company intends to drill 3,000 metres around the area of this step out hole to bring it into the upcoming resource estimate. It has stalled work planned for other areas of the project.

“Our technical team decided that we need to put everything else aside,” Salamis says. “Because of this result it’s really worth re-tasking our drilling efforts to this area to do more drilling to piece together what we think is going to be a pretty incredible resource extension.”

Integra Resources CFO Andrée St-Germain at the DeLamar gold project in Idaho. Credit: Integra Resources.

The company also tabled drill results from Delamar’s Town Road and Henrietta deposits. Highlights include 21 metres grading 0.91 gram gold and 2.31 grams silver from surface at Town Road and 26 metres at 0.51 gram gold and 27.15 grams silver from 83 metres downhole at Henrietta.

The DeLamar project consists of two neighbouring deposits, DeLamar and Florida Mountain, connected by a 6.5 km, all-weather road.

Integra acquired DeLamar from Kinross Gold (TSX: K; NYSE: KGC) in November 2017 for $7.5 million and 9.9% of all issued and outstanding Integra shares.

It aquired Florida Mountain from a private group based in the U.S. in early 2018 for US$1.6 million. Kinross has a variable net smelter return royalty on DeLamar.

Kinross produced 874,000 oz. gold and 50 million oz. silver at DeLamar from 1977 to 1998. Underground mining at the project from 1883 to 1910 produced 33,000 oz. gold and 57 million oz. silver at grades greater than 30 grams gold per tonne.

The deposits contain a combined 154.5 million inferred tonnes grading 0.54 gram gold and 21.92 grams silver for 2.26 million oz. gold and 108.4 million oz. silver, or 0.71 gram gold equivalent for 3.54 million oz. gold equivalent.

The company is also performing metallurgical studies for inclusion in 2019’s PEA. It envisions DeLamar as an open-pit operation with heap leaching on certain sections of the project’s deposits. Because the site was recently reclaimed, Salamis says the company has a lot of environmental data about the area already, and therefore doesn’t have to do as much work in terms of “environmental input” into the study.

“The state signed off on the reclamation plan and the closure two years ago,” Salamis says. “That’s a lot of work that we don’t have to do that goes into the PEA.”

Shares of Integra Resources are trading at 87¢ with a 52-week range of 61¢ to $1.40.

The company has a $60-million market capitalization.