Just wanted to make some observations that I thought were very interesting and support the fact that Integra Mining is significantly undervalued.
Here are some numbers for your comparison:
AND – Andean Resources
• Market Cap $800m • 381m shares on issue • $10m in cash • 1.5m oz resource @ 3 grams a tonne ( only 33% indicated or 500k oz’s in Vein Zone ), an 83% increase over previous estimate • Gold recoveries >90% • Argentina – possible sovereignty issues. • NOT PRODUCING & NOT IN DEVELOPMENT • No Plant • Grade getting better at depth – deep means risk & higher grades required
AVO – Avoca
• Market Cap $556m • 211m shares on issue • $90m in cash • 1.35m oz resource @ 3.6 grams a tonne ( only 65% indicated or 877k oz’s ), an 23% increase over previous estimate • Gold recoveries not known • WA location • NOT PRODUCING but in development • Good grades at depth – deep means risk & higher grades required
DOM – Dominion Mining
• Market Cap $577m • 100m shares on issue • $42m in cash • 1.0m oz resource (50% reserves, 50% indicated ) • SA location • Gold recoveries >90% • PRODUCER but going deeper
IGR – Integra Mining
• Market Cap $183m ( half to a quarter of those above ) • 366m shares on issue • $32m in cash • Estimate1.6 -1.7m oz resource @ above 3 grams a tonne (79% indicated previously, with recent drilling this is likely to be maintained or increased or 1.3m oz’s ), an estimated 45-50% increase over previous estimate • Gold recoveries greater than 95% and Salt Creek as high as 99.5% • Kalgoorlie – centre of the gold world • Not producing but in development, plant being dismantled in early 2008 in preparation for movement to production site and refurbishment • Good grades, all open pits less than 150 metres deep and most of Randall’s are less than 75 metres deep – shallow depth with good grades means low risk & higher margins
I don’t know about you but Integra Mining is severely undervalued and it won’t be long before the market latches onto it. With gold in the spotlight, it will be producers and quality developers that will be sought after. Gold is getting a lot more press.
The resource statement is due out shortly. The above figure is only my estimate.
We have tonnes of drilling in 2008 and the most exciting prospect would have to be Reddale. Management have been so excited about Reddale, they can't wait to hit the juicy part of the prospect. I think we will get the sort of news flow from Reddale that we have seen from Salt Creek in the past 6 months.
Salt Creek is not done and dusted yet, we still don't know how big it is yet and they have the diamond drill rig on site now for further exploration at depth. So who knows who big it will get.
2m oz's in 2008, easy if we take the performance of the last 12 months.
Price is starting to move and the volume will improve as we get closer to the resource statement release date. Should be next week some time.
The gold price is doing amazing things. What the market will start to realise is that back in May 2006, we were talking 1.2m oz's and a production cost of about $AUD548. Gold was around $AUD850-900.
Now the price is AUD$977 and heading higher. We should have many more oz's but the oz's that have been found in the last 18 months are of a higher grade, all open pits and the production cost should be closing in on $AUD400. So if we look at the margin per oz's, Integra is starting to tell an amazing story.
Simple arithmetic tells us 120k oz's at $AUD500-600 per oz of margin. That's $66m in margin at an average of $AUD550. The story is going to get stronger, the oz's will increase and so too will the margin.
I think IGR is the most compelling GOLD story on the Aussie stock market. Before long, other people will make this realisation and we will get another lift.
Yes we do have Barrick drilling to be announced some time this month or early next month.
That could change the IGR world as we see it.
Sorry to be so excited, but when you read the previous presentation and review the last resource statement, it's hard not to be excited.
Talk to you next week when we see the new numbers.
Regards
Kojasper
IGR Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
