Integra looks to add its name to Val d’Or lore

Integra Gold's (TSXV: ICG) formula for getting through the current tough patch in the mining market is about as straightforward as it gets. The Vancouver-based company is keeping things simple with a singular focus: drive its high grade Lamaque...

Integra Gold's (TSXV: ICG) formula for getting through the current tough patch in the mining market is about as straightforward as it gets. The Vancouver-based company is keeping things simple with a singular focus: drive its high grade Lamaque gold project into Quebec into production.

What further streamlines the plan is that the property sits within pizza delivery distance of the legendary gold mining town of Val d'Or – and all the infrastructure that goes along with it – and mineralization at the property is of the same variety of the nearby historic Lamaque mine, which turned out 4.4 million oz Au over its long life.

Unlike the original Lamaque, however, where mineralization was concentrated in a single large plug, Integra's Lamaque property is made up of a series of mineralized plugs. Thus far the company has outlined resources on four of them: Fortune, Triangle, No.4 plug and Parallel. When taken together the gang of four has indicated resources of 2.84 million tonnes with an average grade of 7.2 g/t Au for 661,290 oz and inferred resources of 738,000 tonnes grading 11.3 g/t Au for 268,870 oz.

What is perhaps most impressive about the resource estimate, however, is its resilience to lower gold prices. Should gold price fall into the US$1,100 or US$1,000 per oz range, Integra would consider using a higher cut-off grade to bolster margins. So while the above mentioned resource estimate was calculated using a 3-g/t cut-off grade, if that number is moved up to a 5-g/t cut-off grade the deposit still hosts 1.5 million tonnes of indicated resources with an average grade of 10.2 g/t Au for 498,760 oz and inferred resources of 488,500 tonnes grading 15.1 g/t Au for 236,540 oz.

Of the four plugs that cluster along a roughly 3 km strike length, two in particular stand out due to their higher grades and are accordingly getting the bulk of Integra's attention. The company is in the midst of constructing ramps that sink into both the Triangle and Parallel plugs – both of which are open laterally and at depth. And if the historic deposits around town, namely Lamaque and Sigma, are any indication, gold may well be found at great depth.

Sigma, which produced 4.5 million oz Au over its history, was mined to a depth of 2,000 metres, while mining at Lamaque went down 1,200 metres.

Integra's ground is underlain by steeply dipping volcanic flows and pyroclastics units that intruded by the mafic plugs, dykes and sills. Gold mineralization is vein type and mesothermal structurally controlled.

Both Parallel and Triangle have near surface mineralization that has been defined down to roughly the 400 metre level. But the depth potential has also been demonstrated by three holes at Triangle which show mineralization down to the 600 metre level and four holes at Parallel which showed mineralization below the 600 metre level.

Neither Parallel nor Triangle has historic stopes in them, but the No.4 plug does, and there are historic drifts at both No.4 plug and Parallel.

While Integra can only hope that any of its plugs will prove as bountiful as either Sigma or Lamaque, it is also mindful of not falling into the same trap that ultimately doomed both mines in their later years. Both Century Mining and White Tiger Gold were unable to make the two mines economic as they encountered less than expected mineralization as they dug deeper and yet continued to feed a lot of ore into the large mill. The massive amount of dilution that ensued was noted as one of the key reason for the bankruptcy of the companies.

To avoid falling into such a situation Integra has already begun discussions with mills in the area to process ore from its property.

A chief candidate may well be Agnico Eagle Mines (TSX: AEM; NYSE: AEM) and its Goldex mine. Since that mine ran into problems of its own a few years back and had to be closed due to flooding, Agnico has turned to mining smaller satellite deposits on the property. That means its mill has some spare capacity and Integra already has signed a confidentially agreement with Agnico as it considers the possibility of mining ore from its No.4 plug, which is the most well suited to the Goldex mill.

That's not to say the Integra is spending all of its time sniffing out mills in the area. While other juniors have been forced to sit on assets to conserve capital, Integra is being relatively aggressive as it drives towards getting a preliminary economic assessment out by the first quarter of next year.

The company has two drills turning at the site with aim of testing for extensions of the high grade zones, doing infill drilling for resource expansion while also testing new targets that show similar induced polarization signatures as the known plugs.

Recently Integra's stock broke out of the 17¢ range and was trading for 22¢ in Toronto on October 11th. The company has 111.3 million shares issued and outstanding.

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