As Integra Gold (ICG.V) has recently raised C$10M and is firing on all cylinders in Québec, we had a chat with the company’s Senior Vice-President Hervé Thiboutot.

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Can you elaborate a bit more on your background at Alamos, Placer Dome and Goldcorp?

I started my career at Placer Dome, where I stayed for almost a quarter of a century. I worked in several countries where I gained substantial experience in all aspects of exploring and developing mining projects usually bringing those projects from early stage exploration to completion of feasibility studies. During my time at Placer Dome I was mainly working at the project level (on large projects such as Las Cristinas in Venezuela, Mulatos in Mexico and Bulyankhulu in Tanzania) as exploration manager, project manager and even country manager.
When Barrick Gold (ABX.TO, ABX) acquired Placer Dome in 2006 I got headhunted by Goldcorp (G.TO; GG) to work on its large Northern Quebec Eleonore project when Goldcorp acquired it from Virginia Mines. As site manager for the project I was involved in the definition drilling and feasibility until I accepted a position with Alamos Gold (AGI.TO, AGI) as the company’s Vice President of Exploration in charge of the Mulatos project in Mexico and other projects in the company’s portfolio. I was also part of the Alamos team when Alamos acquired the new Agi Dagi project in Turkey; thereafter I was managing the exploration work on this project as well.

My main expertise during those years at Alamos, Goldcorp and Placer Dome has been getting projects through the feasibility stage, thereafter handing them off to the development teams. This has always been my forte and I am now using this experience on the Lamaque project which is progressing very nicely.

After working for some of the largest gold companies in the world, why did you decide to join Integra Gold, a small junior exploration company?

Partly for personal reasons after working abroad for several decades, I decided it was time to work again on projects closer to home and family. After leaving Alamos in 2011 I let it known to my industry contacts that I was again available for a new challenge and shortly thereafter I was contacted by the Integra management who asked me if I was willing to join them to lead their Lamaque project. I must admit that it picked my interest as the Lamaque property is a pretty well-known asset located in a great region for mine development. I was actually already pretty much up to speed on the region as I worked for Placer Dome in Val-d’Or for about four years as district geologist and was quite familiar with the local geology, mineral potential and working conditions. Working on the Lamaque project really feels like coming back home for me and I think I will likely end my career with Integra by helping bringing this project into production.

Integra is currently drilling an additional 30,000 meters to further increase and upgrade the currently known resource base. A fair amount of these meters will be drilled on previously untested exploration targets. Can you elaborate a bit more on these targets, about how you discovered them and what the exploration potential is there?

First I should mention that the actual known deposits on the Integra Lamaque property usually correspond to significant and well defined magnetic anomalies. While reviewing our historic database, along with re-interpretation of an airborne magnetic survey previously done on the project in 2006, we realized that several of these targets had never been drill-tested. As little outcropping is available on the property we had to identify those targets using their high magnetic signature, which again seem to correspond very well with the signatures on the old mine workings and the currently known mineralization on the property as well (more specifically, the high-grade Triangle Zone that shows the same characteristics). This means that the magnetic signatures are a very interesting indication that there might very well be something there and we will put in a few holes to drill-test this target this year.
Based on the magnetic survey it’s very obvious there’s a very decent chance to discover new mineralized zones and I’m excited to put some drill holes in to follow up on these magnetic signatures. The most interesting target is approximately 1.5 kilometers east of the Triangle zone and will be drilling that one first. I expect to drill approximately 5,000 meters on those new targets this year.

Your drill program on the Triangle Zone has resulted in excellent intersections which seem to confirm the inferred resources used in the PEA. This zone contained 330,000 ounces of gold at in excess of 10 g/t. Is there any exploration upside left here?

The drill program last winter was mainly meant to convert a substantial portion of the inferred resources into the (measured and) indicated category as this creates more confidence in the resource estimate we will base the pre-feasibility study on.
The fact that we will narrow the drill spacing on the mineralized zones at a depth from 400 to 600 meter will allow us to increase our confidence in the structure of the mineralization and convert the inferred resources into an indicated resource estimate. There’s also a possibility to add some inferred resources at depth and laterally, but the main purpose of the 2014 drill program at the Triangle Zone was to convert resources from the inferred to indicated category.
Talking about exploration, a second objective of the program was to test extensions to the south, east and west of the known zone, this was in part successful and represents a clear upside potential for future drilling. Furthermore –although 2014 drilling did not exceed approximately 600 m in depth, rerestricting ourselves for future studies it should be mentioned that the mineralization very likely extends beyond that level and the potential to extend the known zones or discover new zones is really good; this will be work for the future.

How many meters will have been drilled since the previous resource estimate? What was the ratio of infill/expansion drilling and how should this impact an upcoming resource estimate?

Since the release of the resource estimate on which the PEA was based, we have drilled an additional 60,000 meters and plan to complete another 20,000 meters this year for a total of close to 80,000 meters. As you can imagine this is quite a sizeable addition of drilled meters and this will definitively increase our confidence in the resources at Lamaque. In late 2013 and early 2014 we mainly focused on the Triangle and Parallel zones on the property with a ratio of approximately 70% of the program focusing on infill drilling with the remaining 30% being designed to expand the resource base.
I expect to be able to release an updated resource estimate in the fourth quarter of this year which will be the basis for completion of an updated economic study in 2015.

A revised PEA/PFS will be focused on reducing the initial capital expenditures. What are the main options you’re looking at to reduce the capex?
We are evaluating scenarios to reduce the initial capital expenditures through the possible construction of just one ramp in the beginning. This would slash our capex by close to 50% and would make Lamaque a very low-cost operation. This means the construction of a second ramp would be deferred until later in the mine life, causing a lower output than initially eyed. If we would indeed choose to build just one ramp we are expecting a throughput of approximately 700 tonnes per day. As you can see, it’s basically a trade-off between a higher output at a higher capex and a lower throughput at proportionally lower capital expenditures.
This also means we have to be very careful about which zone we’ll go in first. At this moment in time it looks like the Triangle Zone is in the pole position to be developed first at a rate of 700 tonnes per day.

You have worked on a lot of (major) gold projects. What’s your longer term opinion of Lamaque? What’s the ultimate exploration potential here?

It’s quite difficult to put a definite number on it, but to place things in perspective, the old Lamaque/Sigma mines next door jointly contained 10 million ounces and were mined over 70 years. Our first target when I joined Integra 2 years ago was to define a resource of 1 million ounces which we achieved late last year; we are now going for the second million ounces.
Considering the drilling we recently did, I do expect the resource base to continue to increase further down the road. We are aiming at extending the known zones while any newly discovered zones have the potential to add several hundreds of thousands of ounces per target. We are definitively happy with the 1Moz+ we currently have, but I have no doubt the Lamaque and property package remains very prospective and we will most definitely find more ore bodies.

Disclosure: Integra Gold is a sponsor of the website. Our travel costs for the site visit in January of this year were reimbursed. We hold a long position in Integra Gold Corp. Please see our disclaimer for current positions.

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