Integra CEO aims for mid-tier gold output in Idaho

[Ben Graham]

A feasibility study for Integra Resources’ (TSXV: ITR; NYSE-A: ITRG) DeLamar gold-silver project in Idaho lifts potential profit, trims construction and shortens payback, CEO George Salamis says.

At the base case ($3,000 per oz. gold and $35 per oz. silver), the study shows an after-tax net present value (NPV) at a 5% discount rate of $774 million, a 46% internal rate of return (IRR) and a 1.8-year payback, Integra said late Wednesday.

The company pegs total pre-production capital at $389 million and targets first production in 2028. At spot prices ($4,250 per oz. gold and $60 per oz. silver), the NPV rises to $1.7 billion and the IRR to 89%.

“It’s one big leap in that direction for us” to reach mid-tier production, Integra Resources CEO George Salamis told MINING.COM sister publication The Northern Miner in an interview. The team redesigned DeLamar to be simpler to permit, build and run, the veteran project developer said.

Integra has one of the few large US heap-leach gold projects advancing at the feasibility stage due to high environmental permitting hurdles (especially with Indigenous groups), risks of cyanide leakage, long lead times, and the need for significant capital. Compared with a 2022 prefeasibility study, the company intends to ease permitting and construction with reduced water, power and footprint.

Pads

“The really big change was recognizing it would be easier to build two smaller heap-leach pads instead of one very large one up front,” the CEO said. The company also plans to crush ore in two stages rather than three.

Other notable heap leach projects moving towards construction include Liberty Gold’s (TSX: LGD) feasibility-stage Black Pine project in southern Idaho. Revival Gold’s (TSXV: RVG) preliminary economic assessment-stage Mercur project in Utah and its prefeasibility-stage Beartrack-Arnett project, also in Idaho are another two examples.

Integra shares closed 3% higher in Toronto on Wednesday at C$5.64 apiece, after more than quadrupling over the past 12 months. It has a market capitalization of C$955 million ($693 million).

DeLamar’s 10-year mine plan outlines producing on average 88,000 oz. gold and 1.6 million oz. silver per year, with life-of-mine average annual output of 106,000 oz. gold-equivalent. Site cash costs are pegged at $1,179 per oz. and all-in sustaining costs at $1,480 per oz. of gold-equivalent produced. Integra expects early-years cash generation to carry much of the build.

The sequence aims to front-load cash flow. The study shows 119,000 oz. gold-equivalent average output in years one through five and about $165 million average after-tax free cash flow over that window. Leaching starts in year one, yielding about 7,000 oz. during construction, then ramps.

Deposit

Given silver’s ascent to new record price levels, Salamis noted the grey meal had become a major value driver at DeLamar.

“DeLamar is one of the largest undeveloped silver deposits in the US,” Salamis said. “There’s a lot of silver there.”

DeLamar hosts low sulfidation epithermal deposits. The project has nearly 120million tonnes in proven and probable reserves grading 0.33 gram gold and 13.56 grams silver per tonne for 1.3 million oz. gold and 52.3 million oz. silver.

Measured and indicated resources total almost 246 million tonnes grading 0.37 gram gold and 18.2 grams silver per tonne for 3 million oz. gold and 144 million oz. silver. It hosts a further 39.6 million inferred tonnes at 0.3 gram gold and 11.7 grams silver per tonne for 398,000 oz. gold and 14.9 million oz. silver.

Funding

Integra says it has “realistic and financeable” spending proposed beyond the initial capex. It includes $305 million sustaining capital, supported by cash flow from its producing Florida Canyon mine in Nevada and about $81 million in cash as of Sept. 30.

A mix of conventional project debt and equity is being considered for funding construction. Salamis said he doesn’t see a precious-metal stream as required financing at this stage.

Permitting under US federal rules is expected to begin early in the new year. Salamis highlights a relationship agreement with the Shoshone-Paiute Tribes of the Duck Valley Indian Reservation signed earlier this year. He estimates the project may create 300 long-term jobs at site.

Stibnite

The permitting earlier this year of Perpetua Resources’ (Nasdaq, TSX: PPTA) $1.3 billion Stibnite gold-antimony project in central Idaho, the first state mining permit issued in many years, showed that it can be done, Salamis said.

However, permitting remains a hurdle – and Integra acknowledges it. The study also leans on an elevated gold price outlook. Potential margins track bullion even as the company pitches below-industry average AISC.

Ahead lie company decisions on the debt mix, and how inflation affects costs and the construction schedule. Integra plans detailed engineering to be followed by a construction decision in 2027, Salamis said.

“We have all the ingredients in place to get ourselves there.”