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Integra Gold (ICG.V) has released the results of the updated Preliminary Economic Assessment, right in time for the BMO conference in Miami and the PDAC in Toronto.

As expected, the company chose to process the ore at a higher throughput rate (1,675 tonnes per day compared to just 1,300 tonnes per day) and will now recover just over 1.3 million ounces compared to just over 500,000 ounces in the previous PEA. We’re pleasantly surprised by Integra’s updated production cost estimates on a per tonne basis, as the G&A expenses have fallen by more than 80%, whilst there were also substantial cost savings on the processing front. That’s why the all-in sustaining cost is just US$634/oz (-1%) despite the 15% lower average grade (7g/t vs 8.2 g/t).

The initial capex is obviously higher but at C$111M (net of pre-production revenue) it remains one of the projects with the lowest capital intensity. The total initial + sustaining capex of C$484M works out to be less than C$375 per produced ounce of gold and that’s actually really good.

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The after-tax NPV of C$363M might be a bit disappointing compared to our previous estimates but you should definitely keep in mind we were anticipating a scenario with more ounces to be recovered. We think the next resource update at the Triangle Zone (which will incorporate an additional 105,000 meter of diamond drilling) should allow Integra to add an additional quarter million of ounces to the mine plan which would result in an additional pre-tax and undiscounted net revenue of C$160M.

Once the technical report will have been filed, we will provide an in-depth update in a separate full report.

Go to Integra’s website
The author has a long position in Integra Gold. Integra Gold is a sponsor of the website. Please read the disclaimer

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