Integra capitalises on record gold price with official opening of Randalls mine Friday , 08 Oct 2010 Start-up production of 90,000ozpa, cash cost A$574/oz, cash margin A$~800/oz
Integra Mining (ASX: IGR) is pleased to announce the official opening of its $64 million Randalls Gold Project, located 60km east of Kalgoorlie in Western Australia, enabling the Company to cash-in on the highest gold prices in history.
The Randalls Project will be officially opened at 11.30am (WST) this morning by the Western Australian Minister for Mines and Petroleum, the Hon. Norman Moore MLC, following an official ceremony on site attended by over 100 people including representatives of State and Local Government, Traditional Owners, community leaders, shareholders and investors, media, financiers, staff and contractors.
Mining industry legend Dr Roy Woodall AO was the ceremony's Guest of Honour.
The official opening of the Randalls Project represents a significant event for the Kalgoorlie-Boulder region, with the newly commissioned operation expected to form the centrepiece of a long-life gold mining business for Integra based on multiple open pit and underground deposits located 60-70km south-east of Kalgoorlie.
The Randalls Project was developed at an estimated cost of $64 million, including $49 million worth of plant and infrastructure (designed for a 10-year plus mine life).
Phase I mining is based on development of the Maxwells and Salt Creek gold deposits as open pit mines with ore processed through a 795,000 tonne per annum conventional processing facility located adjacent to the Salt Creek gold deposit.
The first gold bar was poured on the afternoon of Friday 24th September at the new Salt Creek process facility, which was completed on-time and under-budget.
In coming weeks, Integra will focus on stabilising the Salt Creek processing facility into steady-state production ramping up to Phase I annual production of 90,000 ounces per annum for the first 15 months of production on an open pit head grade of 3.6 g/t gold.
Phase 1 gold production has been forecast at a cash cost of A$574 per ounce, with very modest on-going capital requirement, providing +A$800 per ounce margin at current gold prices.
Studies are underway for the commencement of early underground production from the high-grade Santa and Cock-eyed Bob gold deposits with underground production from the high-grade Maxwells gold deposit to commence after open pit production has been completed.
The introduction of early underground production is expected to take annual gold production above 100,000 ounces per year without a process plant upgrade.
In the medium-term, Integra is targeting a 50% process plant throughput upgrade to 1.2Mt per year in conjunction with Phase 2 open pit production and underground production to lift total production to +140,000 ounces per year.
The strong outlook for Phase 2 has been underpinned by recent outstanding drilling results from the Santa, Maxwells and Cock-Eyed Bob deposits. It is anticipated that Phase 2 production will also incorporate the recent Majestic gold discovery which is demonstrating excellent potential as an additional open pit.
The host of high-grade results from Maxwells, Cock-Eyed Bob, Santa and Majestic has paved the way for a substantial resource upgrade due later this year.
Current global resources within Integra's consolidated 1,500 sq km tenement package are 20 million tonnes grading 2.7g/t Au for 1.8 million contained ounces.
"This is a great day for Integra, for the region and for Western Australia," said Integra's Managing Director, Mr Chris Cairns.
"This represents the culmination of a vision which started out over six years ago through a series of acquisitions, joint ventures and strategic alliances which saw us build up a consolidated tenement package of 1,500km2 in the heart of the Eastern Goldfields.
"It also the culmination of what has been a fantastic exploration success story, with the discovery of the Salt Creek deposit in 2007 signalling a key tipping point for Integra. This has been followed by other exciting discoveries such Majestic and fabulous success in proving up the underground potential of the three key high-grade deposits within the Randalls Project.
"The start of production at an initial rate of 90,000 ounces a year is just the beginning for Integra. Our transition to producer status with the highest grade open pit production for this scale of operation in Australia is a very satisfying achievement."To have delivered the project into production on-time and under-budget is a testament to the professional abilities and hard work of our people, and I would like to take this opportunity to thank the many people who have contributed to this result - our staff, employees, key contractors, consultants, the Traditional Owners, the pastoralist, people in Government and of course our loyal shareholders.
"I would particularly like to acknowledge the significant support of our financiers, BNP Paribas and Westpac Banking Corporation, and the contributions of our key contractors, Alliance Mining and GR Engineering in delivering this outcome," Mr Cairns added.
"We believe Phase 1 is the just the beginning for the Randalls Gold Project and that there is substantially more gold to be found both in and around our existing deposits and in new discovery opportunities such as Majestic. The Company's growth trajectory has been very steep and we are now able to fund continued growth through the very strong cash flows the Randalls Gold Project will deliver."
IGR Price at posting:
64.0¢ Sentiment: Buy Disclosure: Held
