IGR - Integra Mining

[Sean K]

Bah...

LOL, well it did break through jman! For a few seconds...

Gee, those last drill results from SC looked good:

Results from two further 20-metre spaced in-fill RC drill sections confirm geometry, grades and widths of gold mineralisation with intercepts including:

18 metres at 8.85 g/t gold;
21 metres at 6.39 g/t gold, including 4 metres at 21.79 g/t gold;
9 metres at 6.04 g/t gold;
39 metres at 3.08 g/t gold;
44 metres at 2.89 g/t gold, including 8 metres at 6.55 g/t gold;
40 metres at 2.53 g/t gold; and
31 metres at 2.35 g/t gold.

All from 50-80m. Nice.

Having that gold processing facility ready to be referbished and installed at SC is a huge bonus. What's that worth to them?

I'd anticipate the PFS to be a boost once it's released in July. Could be a turning point for them. Open pit at 3g/tn? Sounds pretty damn good.

Many more ounces to the 250K ish to be added you think? Or just increases the deposit to Indicated?

Shame they haven't got the 1.6m in the one deposit, would be rated more highly I think.

Chart wise it's in a pretty key support zone, so you would expect some consolidation here, but that could have been said around 55-60 also. In retrospect the H&S was a possibility and the break down through 55 gave a target of about 40c. No help now of course....

Might have found a bottom here with a slight break through the downtrend, but not going back up yet till we see some higher lows and highs and breaking 55 will be important.

Been a tough 2 months for goldies!

 

[jman2007]

LOL, well it did break through jman! For a few seconds...

Having that gold processing facility ready to be referbished and installed at SC is a huge bonus. What's that worth to them?

Many more ounces to the 250K ish to be added you think? Or just increases the deposit to Indicated?

Yes, I think I blinked and missed the break Lol...

kennas the actual savings made from refurbishing the mill would be fairly significant I imagine. These are just very loose figures, but the refurbishment could cost between $5-10M as opposed to building an entire new plant for at least $30M. Feel free to challenge these numbers!

From what I can establish, the original SC resource estimate was based on an approx 500m strike length, although at that time the known extent of the mineralisation was 700m+ along strike. We have now a situation where mineralisation has been etended to the south, to 1km of strike. Although at the same time, from just a very qualitative look at some of the sections, it looks as though the mineralisation definitely thins out in the south of the resource.

I'm going to be very conservative, and estimate that a doubling of the strike length will lead to another 50% increase in the overall resource, so potentially we could have 250,000oz + 125,000oz = 375,000oz @ 2.2-2.4g/t.

Hopefully we can also see a substansial proportion of the original estimate upgraded to indicated! The other feather in IGR's cap is the Maxwell's deposit, 400K oz @ 5.2 g/t, of which approx two-thirds is indicated. Either SC or Maxwells represent perfect start-up operations for a budding producer, consider that a lot of company's are producing from pits @1.6-1.8 g/t!

The chart is much apprecciated mate, and yes I agree, we're in a fairly key area of support, if we manage to consolidate around this region @ 50c until we hear some news I'll be a happy chappy. Cripes, the last two weeks have indeed been horrible for goldies....ugh!

jman

 

[jman2007]

I'm going to be very conservative, and estimate that a doubling of the strike length will lead to another 50% increase in the overall resource, so potentially we could have 250,000oz + 125,000oz = 375,000oz @ 2.2-2.4g/t.

Hopefully we can also see a substansial proportion of the original estimate upgraded to indicated!

Major announcement out today,

60% increase in Salt Creek Resource, it now stands at 400,000oz @ 2.7 g/t...very nice, I suppose my 375Koz estimate wasn't too far away!

Metallurgically, the ore looks to be relatively non-complex, and very reasonable recoveries were achieved in the testwork with a relatively coarse grind.

Interestingly, a lower proportion of the ounces than I expected were upgraded to indicated status, 84,000oz worth. This represents the infill drilling that was conducted on a 20x20m grid spacing, while the inferred portion relates to a 20x40m pattern. However, according to IGR, there is a reasonable chance that geostat modelling may show that there is negligible grade uncertainty brought about by the 20x40m drill spacing, so a good deal of the inferred resource may eventually be upgraded to indicated.

The market is a very strange thing sometimes, how can you explain a 60% resource increase by a 5% drop in the sp?

Cheers
jman

 

[explod]

The market is a very strange thing sometimes, how can you explain a 60% resource increase by a 5% drop in the sp?

Cheers
jman

Yep, cant' believe it. To my mind this is one of our best potential gold stocks.

The moral: Logic does not defy gravity or levitation in any circumstance.

 

[Sean K]

Yep, cant' believe it. To my mind this is one of our best potential gold stocks.

The moral: Logic does not defy gravity or levitation in any circumstance.

Still is over $100 oz to au current resource, doesn't look cheap, unless they have significant potential to upgrade that resource in short time.

Is commanding producer prices.

Please correct my spreadsheat in the Gold Stock Comparison thread if it's out.

Cheers,
K

 

[cuttlefish]

I think its a good stock as well. I started buying in near the middle of last year and took some profits on the way, including in the 50/60c range, but consider the remainder a long term hold and also topped up a bit again recently in the mid/high 40's.

In relation to the announcement I think there was an overly optimistic build up of expectations around the JORC upgrade which haven't been met. In particular the grade is probably lower than expectations. Also the usual pre-buildup and subsequent sell down has occured but without the usual post announcement spike because it was a bit lacklustre.

We're also probably not that likely to get any significant new surprises from them in the near future vs whats been happening in the past year. Mohegan, Lucky Bay and Red Dale don't appear likely to yield immediate surprises and Salt Creek will continue to grow incrementally (and significantly) but probably not as spectacularly as it did when it started from a small new discovery to grow into what it is now.

But its a great emerging gold play and there are plenty of positive qualitative factors that justify a higher resource EV vs its peers imo, including an extremely good resource - new discovery with shallow depth and good structure of the orebody for an open pit operation, good open pit grades and a large resource, good metallurgy, great location logistically, good management, good cash situation, ownership of processing plant, the resource to reserve conversion rate is likely to be high giving very robust project economics and its also on a reasonable development timeframe that isn't too far out.

Thus for an exposure to any gold price improvement I think its a good candidate.

 

[jman2007]

But its a great emerging gold play and there are plenty of positive qualitative factors that justify a higher resource EV vs its peers imo, including an extremely good resource - new discovery with shallow depth and good structure of the orebody for an open pit operation, good open pit grades and a large resource, good metallurgy, great location logistically, good management, good cash situation, ownership of processing plant, the resource to reserve conversion rate is likely to be high giving very robust project economics and its also on a reasonable development timeframe that isn't too far out.

Thus for an exposure to any gold price improvement I think its a good candidate.

I guess the resource EV doesn't take into account the quality of the resource, debt, cash and other assets as you've mentioned cuttlefish. Imo, there is plenty to like about IGR, including the fact that the two highest quality resources, Maxwells and SC are in very close proximity to each other and have a combined resource of 800,000oz at a very attractive grade of approx 3.9g/t. The exploration programme is well-funded, and I think it would currently be difficult to find an open-pittable resource of comparable quality in the goldfields.

jman

 

[smallfry]

I am struggling a bit to understand the market response to recent very positive announcements. Increased resource, easily mined, further potential etc etc. The SP seems to have been in a steady decline since the 60% increase in resource announced.

Can anyone explain?

 

[jman2007]

IGR starting to look rather cheapish, again...

If you believe in what they've done with the S-C Resource, 75% of it has now been re-classified as Indicated, based on "Risk-based Statistical Analysis", although they don't really tell you what it means.

My take on this is that the grade variance between adjacent ore blocks (the basic building-block of a 3d-model) has now fallen below some set of statistical criteria, so that any uncertainty prior to the analysis has now become "insignificant".

Hmmm... I dunno guys, I reckon they should be drilling more holes to build the model, rather than bending the numbers to fit the model. This sorta thing always makes me a bit nervous... Not entirely comfortable with it, but reasonably happy to hold and perhaps take a few more nibbles at these levels.

jman

 

[Dratoz]

Jman,
I thought that I understood their explanation of the basis for resource re-classification, although I am not a geo. Have you read all IGR announcements? Why are you questioning it?
Dratoz

 

[stollis]

Has anybody got on ideas on why such good news re $450 per ounce profit and severe price drop!

Looks to me as though integra are way over sold. They have all the hard assets (120 man camp and processing plant) to start production with good margins but price keeps going down!

Talk about a bear market!!!

 

[jman2007]

Has anybody got on ideas on why such good news re $450 per ounce profit and severe price drop!

Looks to me as though integra are way over sold. They have all the hard assets (120 man camp and processing plant) to start production with good margins but price keeps going down!

Talk about a bear market!!!

Howdy stollis,

Yep you summed it up in two words, "Bear Market". Looks to be sitting around 41-42 atm on MC to oz, so potentially oversold, yes. I say this when you consider their hard assets on paper, as you mentioned above. I'm sure IGR management would love to hear some ideas as to why they've been hung out to dry. Probably a combination of many factors outside their control, and certainly due to the string of failures in the Oz gold sector we've seen this year, mostly due to cost blowouts, dodgy interpretations and companies not varrying out due diligence before prematurely heading into production. They're still sitting on $15M in cash, and that's a fairly healthy position to be in considering the current climate. I continue to hold on this one.

 

[jman2007]

Jman,
I thought that I understood their explanation of the basis for resource re-classification, although I am not a geo. Have you read all IGR announcements? Why are you questioning it?
Dratoz

Dratoz,

It's not a question of whether or not I understand why they did what they did, but more one of personal preference. I am not a geostat modeller, but I can grasp the basics of what they were trying to achieve. If you asked a modeller and an exploration Geo their preference as to how best to fill in gaps in the drilling you'd get two very different repsonses. If you don't know what's underneath your feet, then there's nothing like sticking a hole in it to find out. Of course the remodelling would be all above board, and would be a far cheaper approach than infilling the whole damned thing on a smaller grid. In this game, what counts is what's actually contained in the ore block when you get down to that bench and mine it out. And trust me, there is no room for re-interpretation at that point.

 

[vegemite]

Talked to Chris Cairns at the Mining08 conference

* Not overly keen on the toll treating option
* 100 million required for financing. 70-75 million no problem at all (have been in discussions with banks etc) with shortfall possibly made up of convertible notes (although even this 25 mill might be possible via banks)
* Funding not an issue for 5 months by which time things may be easier to obtain etc

So overall sounded like things were pretty much under control.

From the presentation itself

* Mk Cap of 40 million. Project will lead to $250 million after capex
* Total production cost of $680/ounce (includes capex, opex, amortisation etc)
* IRR of 50%

Cheers, V

 

[jman2007]

Talked to Chris Cairns at the Mining08 conference

* Not overly keen on the toll treating option
* 100 million required for financing. 70-75 million no problem at all (have been in discussions with banks etc) with shortfall possibly made up of convertible notes (although even this 25 mill might be possible via banks)
* Funding not an issue for 5 months by which time things may be easier to obtain etc

So overall sounded like things were pretty much under control.

From the presentation itself

* Mk Cap of 40 million. Project will lead to $250 million after capex
* Total production cost of $680/ounce (includes capex, opex, amortisation etc)
* IRR of 50%

Cheers, V

Hey veg,

thanks for sharing that. I see they've been returned with $500,000 as a performance bond for removing the New Celebration Mill from site. The toll treating option isn't such a bad one in my opinion, it would substansially de-risk the project and with the POO falling back significantly, the diesel bill wouldn't be as crippling as it has proved to be in the last 12-16 months for many struggling miners.

Majority debt financing clearly advantageous if they decide to go it alone, not much point trying to raise equity at these prices. I would be happy from an exploration perspective if they focussed on the area between SC and Lucky Bay, definitely some kind of anomalous corridor running through there. We could do with another good news story. With $10.2m in the bank, I doubt they'll be hammering it too hard atm though.

jman

 

[sinner]

I see today someone put up a buy offer: 13 lots of 1,440,605 shares at 0.1.

So who is buying up just under 19mil shares?

 

[jman2007]

I see today someone put up a buy offer: 13 lots of 1,440,605 shares at 0.1.

So who is buying up just under 19mil shares?

Hi sinner,

That's not what it means unfortunately.

The correct interpretation is that at a buy price of 10 cents, there are 13 potential buyers who collectively would acquire 1,440,605 shares if all the orders were executed.

Had me hopeful for about 2 seconds though.......

Cheers
jman

 

[smallfry]

ah, but announcement this arvo suggests someone had a whiff?

Further extension to 'confirmed' resources, this keeps getting better - patience I think is in order.

 

[justiceotp]

IGR has gone into a trading halt anyone have any idea why and if so what effect it will have on the price?

 

[justiceotp]

Sorry their second ASX announcement answers that one for me, they have drilling results being announced by tomorrow afternoon