I have highlighted in Bold those areas of interest. Mt Monger as an interesting site for the mill due to all permits being in place, having an open pit for the tailings and the low cost of getting mains power to the plant. This reduces power costs from diesel at 28 cents kwh to 9 cents.
Not to mention the distance from the current plant location, the time saved in moving the plant and you could have a plant up and running in 6-9 months is what the experts are telling me.
Another note of significance is that Barrick have commenced drilling in the Gawler.
Company Overview IGR has established an enviable and a dominant ground position of around 2,000sqkm at its Aldiss-Randalls Gold Project, around 100km SE of Kalgoorlie in WA. IGR recognised the controlling structures along the 80km Aldiss Fault and has so far defined total resources of 13.7Mt at 2.6g/t or 1.17Moz. The degree of confidence is high with 79% of resources in the indicated category. The Salt Ck discovery will help achieve an initial target of 0.5Moz recoverable. Exploration potential is high.
Strategy IGR's primary focus is the Aldiss-Randalls Gold Project, located 100km east of Kalgoorlie. The company is actively drilling to demonstrate a five-year mine life, producing approximately 100,000oz a year. This strategy has proven successful with the recent grassroots discovery of the Salt Creek prospect. IGR also has strategic farm-in/JV agreements with Barrick Gold and Mithril Resources for exploration of Olympic Dam and Voisey Bay-type targets.
Aegis Comments Outlook: IGR owns the New Celebration 1.35Mtpa gold facility. This plant is located 50km west of Randalls and too far to truck 2.6g/t ore. Phase-1 development of Randalls is under consideration, producing 70,000oz/yr from a head grade of 3.6g/t using the small ball mill. Phase 2, using the larger ball mill, would produce 100,000oz/yr, treating 3.25g/t ore. Ultimately, both mills could treat 1.8Mtpa at 3.0g/t and produce 165,000oz/yr. The cost to relocate and refurbish the plant is around $45M.
Catalysts: A number of prospects are not included in the current resource statement. There are un-modelled lodes at Maxwells, extensions at Co$#-eyed Bob, Co$#-eyed Bob South ‘A’ and ‘E’ anomalies and Salt Ck. Recent drill results from Salt Creek, best to date, include 58m at 3.96g/t that includes 40m at 4.85g/t. Step-out drilling continues to increase the strike of Salt Ck that will exceed 500m. There are parallel mineralised zones. This is an important discovery and will add significantly to reserves.
Risks: IGR has set target reserves to support five years' production at an annual rate of 100,000oz. This is the minimum resource to justify refurbishing the New Celebration gold facility and moving it to Randalls. The discovery of Salt Ck suggests that the target will be met easily. Moreover, ore grades of around 3g/t with mining from shallow open pits and recoveries of 90%-95% bode well for the project. IGR has a permitted site for a mill at Mt Monger, a purchase from Solomon (Australia) Pty Ltd.
Substantial Shareholders RMB Australia as trustee for Telluride Investments 6.0%
Moore Capital 5.7%
Board G Beissel (Chairman)
C Cairns (Managing Director)
P R Ironside (Director)
Differentiating Factors IGR controls an underexplored region east of Kalgoorlie. The company has a low EV per resource ounce, considering the grade of the 1.2Moz resource and ownership of a mill. Resources are expected to grow, with a substantial number of excellent drilling results extending known deposits and the inclusion of the recently discovered Salt Creek gold mineralisation. Production fundamentals may result in a re-rating. Excellent potential for additional discovery, including existing farm-in areas.Achievements IGR has achieved a dominant position along the Aldiss Fault and at Randalls to the west and defined a resource of over 1Moz and rising. Of great significance is the recent purchase of Mt Monger. Mt Monger is close to Salt Ck with major benefits. Mt Monger is permitted for a mill site and has access to a bore field. There is an open pit for disposal of tailings. For less than $5M, Mt Monger can be connected to grid power. Diesel power costs $0.28/kwh but grid power costs only $0.09/kwh.
Current Projects Aldiss Gold Project (AGP): Integra Mining has defined a JORC-compliant resources base of 1.2Moz of gold. The company owns the New Celebration gold processing facility, located some 60km west of its Randalls gold project. The company has made a blind grassroots gold discovery at the Salt Creek prospect and is in an intensive drilling campaign to identify resources sufficient to demonstrate project development over a five-year mine life. Potential for additional discovery is excellent.
Oodnadatta: The Oodnadatta project hosts very significant coincident magnetic and residual gravity anomaly having similarities with those associated with the Olympic Dam Cu-Au-U deposit. Integra has entered into a farm-in JV agreement with Barrick Gold to earn an 80% interest for exploration expenditure of $3M. Barrick has advised the commencement of drilling in late August to test four IOCG anomalies.
West Musgrave: IGR has entered into a farm-in JV agreement with Mithril Resources to explore for Voisey Bay-type nickel sulphide deposits. Mithril can earn 80% through expenditure of $5M.
Capital Structure IGR has 302.7M fully paid shares on issue and 33.8M listed options. There are 14.2M unlisted options and 2.0M convertible notes ($1.00 face value – 25 cents per share conversion, 30/06/08). As many as 4.25M options are in the money.
IGR Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
