Diligence is paying off for gold explorer Integra Gold (TSXV: ICG; US-OTC: ICGQF) in the prolific Val-d’Or gold mining camp, as a steady drill program has allowed the company to upgrade resources at its Triangle Zone gold deposit, 2.5 km southeast from the town of Val-d’Or.
Compared to the previous resource estimate in February 2015, indicated resources grew 21% to 627,810 oz. gold within 2.6 million tonnes grading 7.37 grams gold per tonne. Inferred resources quadrupled to 871,530 contained oz. gold in 3.9 million tonnes at 6.89 grams gold. Both calculations use a 3-gram-gold cut-off.
“The upgrade really met and surpassed everyone’s expectations,” George Salamis, chairman of Integra, tells The Northern Miner during a phone interview. “We’ve oriented the drill program to focus on the high-grade shear zones of the deposit, and the result is in this resource estimate.”
Drilling over the past year has identified six mineralized shear zones — called the “C-structures” — that vertically slice through the metamorphosed volcanic terrain and cross-cut a finger-shaped intrusive “plug” at Triangle.
Because of the varying competencies between the rock types, the intrusive absorbed the strain by shattering into a series of flat-lying mineralized veins called the “C-flats,” which make up most of the previous resource estimate.
The C-structures account for 63% of Triangle’s total indicated oz. gold, and 74% of the inferred oz. gold — which is a healthier proportion from a mining perspective, Salamis says, since the steeply dipping resources can be extracted using less expensive methods, such as long-hole stoping.
“The C-structures carry a lot more ounces than the C-flats, they’re thicker and more continuous, and that’ll carry substantial enhancements, in terms of mineability,” he says.
The company is taking steps towards updating the preliminary economic assessment, and aims to deliver it during the first half of next year.
But in light of the suspended operations at Rubicon Minerals’ (TSX: RMX; NYSE-MKT: RBY) Phoenix gold mine in Red Lake, Ont., and lower production from Goldcorp’s (TSX: G; NYSE: GG) Éléonore gold mine in Quebec, it appears that high-grade underground gold miners may face unanticipated head-grade challenges.
Both companies blamed higher-than-expected geological complexity for production shortcomings, forcing the miners back to the drawing board to revise their mine plans and models to combat dilution.
Salamis says that although those deposits are “different beasts” than Triangle, Integra has been assiduous with its geological modelling and grade-capping approach to ensure higher predictability in the deposit.
“Getting more stringent on the resource estimation parameters came as a result of more data,” he says, noting the 11% and 23% decrease in average indicated and inferred grade of the resource, from rigorous grade-capping.
“The progression for any company to take is to refine the resource estimation parameters as the project advances, because the more data you capture, the more it becomes representative of what’s there,” he continues.
And as the geological controls on mineralization become clearer, Salamis says that exploration opportunities present themselves, such as the No. 4 Plug prospect, 400 metres north of Triangle.
“We’ve drilled the No. 4 plug in the past and encountered disseminated gold mineralization in the intrusive, but at the time we didn’t know about the high-grade shear zones,” he says. “We traced the shear zones at Triangle up through the volcanics where they intercept the No. 4 plug, and what we’re seeing is a lot more grade focused around those structures, so it kind of opens up the exploration potential there considerably.”
Mineralization at Triangle is open in all directions, but has so far been traced at surface for 800 metres, and variably up to 900 metres deep.
Salamis points out that the lion’s share of the 4.5 million oz. gold produced at the nearby Sigma mine came from vertical shear zones traced in a sea of dykes and sills, for at least 1.5 km at surface and 1.8 km deep.
At the Lamaque mine, he says, 4.6 million oz. gold was extracted largely from the flat-lying veins within the bounds of a 200-by-300 metre intrusive plug.
“A lot of gold can be defined in a small area, which is why Lamaque has the highest ounce gold per vertical metre for any deposit in this part of the Abitibi,” he says. “From a depth perspective, Triangle compares with Sigma and Lamaque quite nicely, and it’s still open along strike.”
With over $23 million in its treasury and perhaps $11 million coming through the exercise of near-term warrants, Integra can keep its 10,000-metre monthly drill budget into the new year, with 100,000 metres scheduled for 2016.
On top of that, the company has enticed over 1,250 worldwide participants to compete in its “Gold Rush” challenge, which offers $1 million in prizes in exchange for the most “convincing” exploration plans for the property.
“I think we’re going to get a really diverse set of submissions,” Salamis says, noting the looming Dec. 1 deadline. “You’d be surprised by the number of non-scientific people that have entered the challenges, there are research analysts, business analysts — it’s just amazing. It’s exactly what we wanted.”
Integra Gold shares have traded within a 52-week range of 17¢ to 37¢ per share, and closed at 34¢ at press time. There are 353.5 million shares outstanding for a $118.4-million market capitalization.
With the better-than-expected resource estimate, Beacon Securities kept its “buy” rating on Integra’s stock, raising its 12-month target share price from 70¢ to 75¢. Cormark Securities raised its target share price by 5¢ to 75¢ per share, and kept its “buy” rating on the stock, whereas Macquarie Research increased its target share price 10¢ to 80¢ per share.