Integra Gold (ICG.V) has released the final set of drill results from the No. 4 Plug zone, located just 500 meters from the Triangle Zone on the company’s Sigma Lamaque gold project in Val d’Or, Québec. Integra has drilled a total of 12,000 meters at the No4 Plug, and the continuously positive drill results were the main reason why the company has ‘delayed’ an updated Preliminary Economic Assessment. Sure, Integra could have published an updated PEA based on just an updated resource estimate at Triangle, but this PEA would already immediately be outdated due to the excellent potential to add more ounces from the No4 Plug to the company’s mine plan.
The infill holes have now confirmed the continuity of the mineralization along a 75 meter trend, and as the gold has been found in shallow-dipping veins which can be spotted with the naked eye, it would make it easier for the company to chase these veins which tend to be more ‘nuggety’ than the C-structures at the nearby Triangle deposit. Despite being able to identify the veins on a visual basis, the No4 Plug will very likely be mined as a bulk operation which does make the most sense from an economic perspective.
We expect the PEA to be ready at the end of the current quarter, and we are now expecting to see a mine plan based on processing 2,200-2,400 tonnes per day rather than the 1,500 tonnes per day used in the previous PEA. It will be very interesting to see if Integra is still planning to use a ramp at the Triangle zone, as sinking a shaft could have a more positive impact in the longer term. But one thing is certain now; the No4 Plug zone has the potential to produce several hundred thousands ounces of gold and contribute at least C$100M to the net present value of Sigma Lamaque.
We previously guesstimated an updated PEA would result in an updated after-tax NPV of just over C$300M, but with the excellent exploration results at the No4 Plug zone and the higher gold price (the current gold price is C$1734/oz versus the C$1339/oz used in the PEA), the after-tax NPV5% could now easily reach C$500M.