Sunday, 24 July 2011

Integra Mining boosts Randalls ore reserve 94% to 480,000 gold ounces

Integra Mining (ASX: IGR) continues to develop the vast potential of the Randalls Gold Project in Western Australia, with the latest positive for the company a 94% reserve boost to 480,000 gold ounces.

The reserves estimate is now 6.0 million tonnes at 2.5 grams per tonne (g/t) gold for a contained 480,000 ounces, based on four open pit sources only, and comes less than a year after the first gold pour at the project.

This provides the enticing potential opportunity for underground production, which is not yet included in current ore reserves.

Chris Cairns, managing director, told Proactive Investors today, that the only real means of assessing the potential production performance of the Cock-eyed Bob, Santa and Maxwells gold deposits as underground operations is to develop them.

"In a nutshell, it is cheaper to develop for trial mining than it is to drill them and the trial mining gives us a much more realistic outcome – with associated revenue – than would any amount of drilling.

"As for FY2012 revenue, we are investing in the business by reducing debt by a further $20 million, spending $23 million on exploration, expanding the process facility capacity by 25% for $12 million and risk-funding underground trial mining at Cock-eyed Bob for $8.2 million."

The current life of ore reserve cash costs at Randalls estimated to be $685 per ounce, providing an $800 per ounce operating profit margin - which enhances Integra’s position as one of Australia’s most profitable gold miners.

The financial year 2012 forecast cash cost of production is just $550 per ounce.

Integra said if only open pit ore reserves were processed - without the introduction of high-grade underground production, the mine life would be extended to 6 years at an upgraded processing rate of 1 million tonnes per year.

Adding the possibility of much more gold, the ore reserves do not include the high-grade Lucky Bay, Spice, Fly Camp / Anomaly C gold deposits or northern extensions to the recently discovered Majestic gold deposit to be added to reserves at a later date

Importantly - increasing gold production and extended mine life provides Integra with a very solid platform to capitalise on immense exploration upside and other growth opportunities.

Currently there is 1.4 years of stockpiled medium-grade ore, ensuring production capacity will continue to be utilised.

Integra is targeting 100,000 ounces per year production from an upgraded processing facility at Salt Creek with the upgrade expected to be completed next month.

A further increase to 120,000 ounces per year of steady state production, before 140,000 ounces per year is expected when high-grade underground production is established to compliment the open pits.

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