In less than 18 months since acquiring the DeLamar project in southwestern Idaho, Integra Resources (TSXV: ITR; US-OTC: IRRZF) has upgraded 90% of its global resource from the inferred to the measured and indicated category, and the company is on track to complete a preliminary economic assessment before the end of September.
“We were able to upgrade the resource to measured and indicated without losing gold and silver ounces in the conversion process, which is not often the case in resource estimation,” commented George Salamis, Integra’s president and CEO. “The overall resources, in fact, have grown substantially since the last resource estimate, and the project now boasts close to 4 million equivalent oz. gold in measured and indicated and 0.5 million oz. gold equivalent in inferred resources, positioning it into a very rare group, as there are only a handful of projects in North America with this size of resource.”
The DeLamar project includes the DeLamar and Florida Mountain deposits, situated 8.5 km apart and connected by an all-weather haul road, 160 km from Boise.
Kinross Gold’s (TSX: K; NYSE: KGC) historic DeLamar mine produced 1.6 million oz. gold and 100 million oz. silver before it closed in 1998, due to low metal prices.
Historic underground mining at Florida Mountain from the 1830s to the 1910s produced 133,000 oz. gold and 15.4 million oz. silver. Kinross open-pit mined the deposit in the 1990s and produced another 124,500 oz. gold and 2.6 million oz. silver. The mine closed the same year as DeLamar, and was put on care and maintenance.
Integra’s updated resource incorporates over 250,000 metres of historic drilling by Kinross Gold and its predecessors, and 30,000 metres (93 holes) done by Integra since the first quarter of 2018, which is the first exploration DeLamar has seen in 25 years.
Last year, Integra found a mineralization zone that was not fully explored by previous operators. The new zone, Sullivan Gulch, in addition to successful drilling below and around the existing resource, has proven the company’s theory that the DeLamar deposit has potential for resource growth.
DeLamar’s resource stands at 172.37 million tonnes grading 0.43 gram gold per tonne and 21 grams silver per tonne, or 0.70 gram gold-equivalent, for 2.38 million contained oz. gold and 116.51 million oz. silver for 3.88 million equivalent oz. gold. Inferred resources add 28.27 million tonnes grading 0.38 gram gold and 13.5 grams silver, or 0.55 gram gold-equivalent, for 343,000 contained oz. gold and 12.24 million oz. silver for 500,000 equivalent oz. gold.
DeLamar and Florida Mountain’s resources were constrained to lie within optimized pit shells created using metal prices of US$1,400 per oz. gold and US$18 per oz. silver. The DeLamar deposit resource was based on 1,528 historic reverse-circulation (RC) and diamond core holes, as well as 83 RC and diamond core holes drilled by Integra. The Florida Mountain resource was based on 1,074 historic holes and 10 core holes by Integra. The historic holes were drilled from the mid-1970s to the late 1990s.
The company plans to drill 20,000 metres at the project this year — 6,500 metres of which will focus on Florida Mountain. Last year, Integra only drilled 3,400 metres at Florida Mountain due to its exploration drilling at Sullivan Gulch, which diverted resources.
This year, the drill program at Florida Mountain will try to find near-surface oxide and transitional extensions to the deposit that have never been drill tested north and south of the resource. The drilling will also delineate high-grade feeder zones found last year.
At DeLamar, another 2,600 metres of drilling has been completed since the resource estimate cut-off date of May 1, 2019, and the company has found multiple exploration targets on the periphery of the DeLamar deposit, including Deadwood, Black Sheep, Milestone and Henrietta, in addition to Sullivan Gulch to the southeast.
Tara Hassan, a mining analyst at Raymond James, notes that 45% of the updated total resource falls within the oxide and transitional categories. “This is an important element of the resource update,” she says in a research note, “as there is now a substantial portion of the resource that could be amenable to heap leaching, supporting our view that the project offers significant optionality from a development approach.
“We continue to view Integra to be one of our preferred development companies, given that it remains undervalued and well positioned to earn a market re-rating due to the potential for resource growth, the scale and optionality of its deposits, and its experienced and proven management team.”
At press time, Integra’s shares traded at 88¢ within a 52-week range of 61¢ to 95¢. The company has a $49-million market capitalization.