Integra chasing high-grade gold at DeLamar

Integra Resources (TSXV: ITR) has tabled assays from nine of 13 initial drill holes at its DeLamar deposit, part of its larger 21.4 sq. km DeLamar gold project, 80 km south of Boise, Idaho. The results mark the first major exploration at DeLamar in the last 25 years.

The DeLamar project consists of two deposits: DeLamar and Florida Mountain. The nine holes correspond to the first 2,900 metres of the company’s planned 20,000-metre, $10-million exploration campaign for 2018.

Integra president and CEO George Salamis says the plan is to drill 10,000 metres into each of the company’s two deposits.

“We had to start at DeLamar first because they’re at two different altitudes,” Salamis says in a telephone interview with The Northern Miner. “DeLamar sits at about 5,000 feet of elevation and Florida Mountain at 7,500 feet. Until recently there was snow at the top of Florida Mountain. It’s all gone now, but we had to wait until that melted.”

A geologist at Integra Resources’ DeLamar gold property in Idaho. Credit: Integra Resources.

The company has drilled 4,000 metres so far. Five of its holes are on the southeastern part of the property, in an area containing resources that have never been mined. The company says these drill results show the deposit is open for extension.

It has one diamond drill rig and one reverse-circulation rig active at DeLamar. It plans to add a third rig at Florida Mountain towards the end of May that would start drilling in early June.

Highlights from the current drill program include 140 metres from 94.5 metres downhole grading 1.19 grams gold equivalent and 151 metres from 184 metres downhole grading 1.2 grams gold equivalent.

DeLamar and Florida Mountain are connected by a 6.5 km,  all-weather, gravel road, installed by Kinross Gold (TSX: K; NYSE: KGC), which formerly owned and operated both properties.

Salamis says production at DeLamar occurred twice. The first, from 1883 to 1910, saw underground, narrow-vein mining produce 733,000 oz. gold and 57 million oz. silver at grades greater than 30 grams gold per tonne. From 1977 to 1998, Kinross produced 874,000 oz. gold and 50 million oz. silver, albeit at a much lower grade. Whereas previous operators had focused on the underground part of the deposit, Kinross bulk mined low-grade, near-surface ore.

“Both of those were shut down not due to exhausted resources, excessive strip ratios, or anything — it was purely price dependent,” Salamis says. “In the late 1990s we started to move into that ‘nuclear winter period’ of the gold price, and that shut them down.”

Integra acquired DeLamar from Kinross in November 2017 for $7.5 million and 9.9% of all issued and outstanding Integra shares. It acquired 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.

The DeLamar deposit has 117.9 million inferred tonnes grading 0.41 gram gold per tonne and 24.3 grams silver for 1.59 million oz. gold and 91.8 million oz. silver.

The resource is based on historical data and over 1,000 shallow holes drilled by Kinross covering a 3 km strike length to an average 120 metres’ depth below surface.

Integra Resources’ past-producing Florida Mountain gold-silver project in Idaho. Credit: Integra Resources.

“On occasion they would push a hole deeper and hit these spectacular, high grades,” Salamis says. “So picture that high-grade plumbing as the stem of the mushroom, driving all of that gold to what was mined by Kinross as low grade, which was the mushroom cap.”

As a result, every hole Integra drills is designed to pass through the low-grade mineralization at surface, confirming and expanding it, before hopefully intersecting the higher-grade veins deeper underground. The company will drill an average 325 metres downhole, testing at a 265-metre vertical depth.

The company also tabled a resource estimate for Florida Mountain in February 2018, based on Kinross’s drilling. Florida Mountain has 36.6 million inferred tonnes grading 0.57 gram gold and 14.12 grams silver for 675,000 oz. gold and 16.6 million oz. silver.

The company flew the first airborne induced-polarization survey on the property earlier this year. It found a chargeability anomaly that may correspond with high-grade veins. Salamis says the results provide extra motivation to look for the high-grade mineralization.

The company is targeting an updated resource estimate for the DeLamar project by the fourth quarter of 2018, and a preliminary economic assessment in 2019. Shares of the company are trading at 93¢ within a 52-week range of 85¢ to $1.40. The company has a $52-million market capitalization.