Integra Resources releases high-grade results from Florida Mountain deposit

Integra Resources (TSXV: ITR; NYSE-AM: ITRG) plans to update the resource estimate and complete a prefeasibility study on its DeLamar project before the end of the fourth quarter and in the meantime continues to release high-grade results from the project in southwestern Idaho.

The project, 160 km from Boise, consists of two past-producing mines, DeLamar and Florida Mountain, which shut down in the late 1990s due to low precious metal prices after producing 750,000 oz. gold and 47.6 million oz. silver between 1977 and 1998.

Highlights from ten drill holes, which cover a strike length of 400 metres and occur on multiple high-grade gold-silver shoots and veins within and outside the bulk tonnage resource at the Florida Mountain deposit, included 24.64 grams gold per tonne and 295.31 grams silver per tonne (28.44 grams per tonne gold-equivalent) over 5.18 metres starting from 164 metres downhole in drill hole FME-21-127, including 103.94 grams gold per tonne and 1,202.39 grams silver per tonne (119.41 grams gold-equivalent per tonne) over 1.22 metres.

Senior exploration manager Chris Longton. Credit: Integra Resources.

Drill hole FME-21-125 returned 31.24 metres grading 3.13 grams gold per tonne and 104.08 grams silver per tonne (4.47 grams gold-equivalent per tonne) starting from 12.35 metres downhole, including 6.17 grams gold and 87.60 grams silver (7.30 grams gold-equivalent), and drill hole FME-21-130 cut 9.39 metres of 12.50 grams gold and 156.92 grams silver (14.52 grams gold-equivalent) starting 17.22 metres from surface, including 1.52 metres of 73.25 grams gold and 427 grams silver (78.75 grams gold-equivalent).

“This is by far the largest number of high-grade drill hits we have put out in one news release,” George Salamis, the company’s president and CEO, said in an interview. “Usually we’ll put four or five hits into a news release and this was ten, but the most germane point is, if you look at a cross-section through Florida Mountain, you can see the continuity of these vein structures from all ten drill results, which is key in these high-grade vein structure systems. That’s key from a mining perspective, from a resource perspective, and from a potential profitability perspective.

Project geologist Sebastien Bricka. Credit: Integra Resources.

“The thing is, now we have 92 drill hits of over 4 grams gold-equivalent that we’ve intersected at Florida Mountain, which is a big number, so we can clearly see from these drill holes the potential for one million plus oz. gold and silver there.”

Salamis also noted that it is evident that high-grade gold-silver resource potential occurs below the existing bulk tonnage, lower grade pit-constrained gold-silver resource, which is the focus of the upcoming prefeasibility study, and said the company will continue to pursue high-grade exploration from surface and, if warranted by additional internal studies and further drilling, Integra may choose to evaluate the possibility of transitioning in the future to an underground scenario.

“We dream big,” he told The Northern Miner. “We’ve got a large, bulk tonnage open pit that is complemented by a high-grade underground scenario. We’ve modelled what that would look like, but we have to get there in steps, and step one is to get it into a resource category, but it could add huge potential.”

The mining executive also said he was optimistic about the upcoming PFS and the next stage of permitting.

“As we put out this PFS, the results of which I think are going to be excellent, we’re then going into permitting, and that phase is three years of jumping through various hoops, which we will get through,” he said. “We think this will be relatively straightforward because it’s a past operation and we’re just re-opening it.”

The focus in 2022 will be working on permitting the plan of operations, which will demarcate where Integra plans to build its infrastructure — everything from the open pits to the heap leach facility, mill site and tailings. “A lot of this area has already been disturbed because the two (DeLamar and Florida Mountain deposits) were mined in the past,” he said. “Where we’re going to put our infrastructure is on private land, which we own, and Bureau of Land Management land, and some State land, so we’re not dealing with the Forestry Service in any way, which should make our lives easier.”

“Almost 100% of our resource there is on patented ground, the easiest from a permitting situation; the next easiest leg up is a tie between BLM ground and State ground, and that’s where the majority of our infrastructure is going to go. Picture two squares separated by about 5 km: One square in the West is DeLamar and one square in the East is Florida Mountain, and halfway in between those two is where we’re going to put our infrastructure, and that area is a combination of BLM ground, ground we own, and ground that third parties own and State leases as well. All of this is going to be under the umbrella of one plan, and this one plan is really going to be dictated by an area that was already disturbed. It was mined for twenty years by Kinross. They reclaimed it successfully, but it’s still regarded as being disturbed previously, so we’re basically starting off where Kinross left off.”

Salamis noted that Kinross walked away due to low gold prices, which at the time were about US$300 per oz., “not because of resources and reserves.”

The company will continue to drill the project while permitting is underway, Salamis emphasized, noting that two rigs are turning and a third will arrive in early September.

“We’ve passed the 20,000 metre mark easily for 2021 and by the time we hit the end of the year we’ll probably have drilled 30,000 metres,” he said, adding that one of the rigs will be moved to the War Eagle target, about 4 km from Florida Mountain. War Eagle, he said, is where Integra has had some of its highest grade hits at the project. “It was mined underground by old timers from the late 1800s to the early 1900s, but never mined by Kinross,” he said.

Project geologists Sebastien Bricka and Kifor Muroff. Credit: Integra Resources.

“In our view, if we can keep the investment audience and our shareholders’ attention on high-grade underground potential while we’re in the permitting phase, that’s good,” he added. “It gives us optionality.” 

Based on the DeLamar project’s 2019 PEA, an open-pit/heap leach operation would have a production rate of 27,000 tonnes per day and source oxide and transitional mineralization from both the Florida Mountain and DeLamar deposits over an initial mine life of ten years. The early stage study forecast average annual production from year one to ten of 103,000 oz. gold and 1.66 million oz. silver (124,000 gold-equivalent ounces) for life of mine total payable production of 1.03 million oz. gold and 16.60 million oz. silver (1.24 million oz. gold-equivalent). Life-of-mine all-in sustaining costs were estimated at US$619 per oz. net of silver by-product or US$742 per oz. on a gold-equivalent co-product basis.

The PEA forecast pre-production capex of $213 million (US$161 million) and an after-tax payback period of 2.4 years. The study outlined an after-tax internal rate of return of 43% and after-tax net present value at a 5% discount rate of $472 million (US$358 million).

Integra Resources’ management team is made up of the former executive team at Integra Gold, which was sold to Eldorado Gold (TSX: ELD; NYSE: EGO) in July 2017 in a deal worth $590 million. The chairman of the board is Stephen de Jong, who served as president and CEO of Integra Gold between 2012 and 2017, and the board of directors includes C.L. “Butch” Otter, who was the 32nd governor of Idaho from 2007 to 2019.

News of the drill results sent Integra’s shares up 7¢ to $3.53. Over the last year the company’s shares have traded in a range of 3.13 and $5.19. Integra has a market cap of about $195.2 million.