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Report: Integra Resources – The final straight line towards an interim-PFS

Integra Resources (ITR.V, ITRG) has a luxury problem. The greater DeLamar project region continues to yield excellent exploration results and that means…



This article was originally published by Caesars Report

Integra Resources (ITR.V, ITRG) has a luxury problem. The greater DeLamar project region continues to yield excellent exploration results and that means economic studies are almost immediately outdated (for the better) upon publication.

It looks like this will again be the case with the company’s pre-feasibility study which should be released later this month. That study will already be a substantial improvement (i.e. – Increased throughputs at the heap leach pad and mill which expected to result in a 50% or greater increase in the gold equivalent production profile over a longer time-frame relative to the 2019 PEA which showed 124,000 oz AuEq per year over 10 years). Recent drill results from the Sullivan Gulch property indicate the expected economics of the project can be boosted right away. Perhaps we should look at the November PFS as some sort of interim-PFS as we expect Integra could release an updated study by the summer of next year should the potential of the Sullivan Gulch area be confirmed.

Putting the recent Sullivan Gulch drill results into perspective

In October, Integra released the assay results from four holes that were completed on the Sullivan Gulch zone of the DeLamar deposit as part of a metallurgical drill program on the project.

 Selected intercepts from the Sullivan Gulch drill results

The encountered mineralization has now expanded the footprint of Sullivan Gulch to a strike length of 1,000 meters, with a width of 200 meters and a depth of 350 meters. This could prove to be important as Sullivan Gulch could be an attractive satellite deposit that could be mined to fill the mill (and that will be important as especially in holes 201 and 202 a large portion (about 60% and 45%) were attributable to the silver. And the recovery rates for silver are only decent when processed in a mill.

Some of the rock at Sullivan Gulch appears to be refractory which means additional steps may be required to figure out the most optimal way to process this type of rock. There are a few processes out there that would allow Integra to include this material in future studies. The drill holes from Sullivan Gulch were for metallurgical purposes so we can assume they are looking at the available processing options which could allow this target to be included in future economic studies…

Should the refractory rock indeed be amenable for processing, the DeLamar project could change dramatically as suddenly tens of millions of tonnes at Sullivan Gulch would ‘come into play’.

In any case, the thick mineralized intervals at Sullivan Gulch (albeit a bit deeper than we would have liked) are increasing the scope of the DeLamar project where regional exploration successes continue to add tonnes and ounces to a resource. While refractory gold is indeed a complicating factor, there are several options to successfully recover gold from the host rock.

In another exploration update released last week, Integra released additional assay results from the Florida Mountain deposit with 92.66 meters almost starting at surface and containing 3.36 g/t gold-equivalent as mouth watering result. The headline result is great but the grade is carried by just 8.5 meters: the 1.53 meters of 70.62 g/t AuEq and the 7.01 meters containing 24.15 g/t AuEq. Excluding these two intervals from the wider 92.66 meters would result in a residual value of just around 0.40 g/t gold-equivalent over a length of around 84 meters. And that’s fine. Florida Mountain is generally carried by narrow but high-grade intervals, and this new hole is no exception.

Selected intercepts from Florida Mountain drill results

As Integra notes, these higher grade results seem to confirm the continuity of the higher grade veins which could be very useful further down the road. Judging the language of the November 4th press release, Integra is now more explicitly hinting at an underground development scenario at Florida Mountain, so we expect it to be something the company will for sure have a closer look at.

The pre-feasibility study will be released imminently

Perhaps a brief recap of the 2019 Preliminary Economic Assessment could be useful although that study is completely outdated. DeLamar is now for sure bigger and also appears to be better, so we should only look back at the PEA to establish some sort of baseline. A hurdle the company should easily jump over, both on the NPV as well as the IRR front.

As you may remember, the PEA used a heap leach scenario with 27,000 tonnes per day complemented by a 2,000 tonnes per day processing plant. Only 1.24 million ounces of gold and 46 million ounces of silver actually made it into the mine plan. That’s just 1.82 million ounces gold-equivalent of the 3.9 million ounces gold-equivalent in the measured and indicated resource and the half million ounces gold-equivalent in the inferred resource. According to the PEA, the total production profile was limited to just 1.03 million ounces of gold and 16.6 million ounces of silver on a payable basis.

Despite this, the after-tax NPV5% at $1500 gold and $19 silver was estimated at C$615M with an after-tax IRR north of 50%. Using $1650 gold would likely boost the after-tax NPV5% to in excess of C$725M while the IRR would exceed 60%.

Needless to say there was a lot of blue sky potential in the PEA as even including just half of the gold-equivalent ounces from the resource in the mine plan would boost the production profile by more than 30%. And we expect the total resources to increase due to the exploration success enjoyed by Integra Resources in the past few years.

We expect the pre-feasibility to be better. There should be more ounces included in the mine plan and as more tonnes of the transition and sulphide zones will make it into the mine plan, we expect the mill throughput to increase compared to the rather low 2,000 tonnes per day in the PEA. Integra mentioned an anticipated throughput of 8,000-10,000 tonnes per day and that indeed seems to be a logical next step.

In an update released early October, Integra confirmed it is now looking at a 32-35,000 tpd heap leach scenario with a 8-10,000 tonnes per day million scenario which will allow the company to include (tens of) millions of tonnes in the DeLamar resource that were previously withheld from the mine plan designed in the PEA. Additionally, putting more tonnes through a mill will dramatically boost the silver production as the recovery rate of silver in a heap leach scenario is a pathetic low double digit percentage (34%) which would be boosted towards 80% if the rock would be processed in a mill. Recovering more silver will boost the production profile expressed in gold-equivalent ounces, while the expanded milling scenario should obviously also boost the production of pure gold. This should pave the way to produce in excess of 175,000 ounces gold-equivalent in the first 10 years of the mine life.

The initial and sustaining capital expenditures will increase. Not just because of the bigger scope of the project, but a lot of time has passed since 2019 and as inflation has started to roar its ugly head there will for sure be some inflationary aspects that will push opex and capex higher. Although we expect the bulk of the inflationary impact to impact the economics whe, Integra prepares a feasibility study.

Integra raised more cash

As of the end of June, the Integra balance sheet still contained almost C$20M in cash, but the working capital position had decreased to just over C$12M at that point. Rather than waiting for the market to continue to bet against Integra, knowing very well a non-revenue company will have to tap the equity markets to keep on working, Integra executed a bought deal financing in September, right on time to boost the cash and working capital position before the end of the third quarter.

The company (once again) engaged Raymond James to complete a bought deal offering, which was closed within days. Integra issued just under 6.8 million shares at US$2.55 per share for total gross proceeds of approximately US$17.3M and likely around US$16.5M in net proceeds. This means the working capital position was boosted by in excess of C$20M, and we expect the upcoming Q3 financial report to reflect a healthy working capital position.

It’s important to note this once again was a straight share, no-warrant offering and Coeur subscribed for just over 420,000 shares to keep its position in Integra unchanged at approximately 6%.

Some readers asked us if this meant Coeur would be in the running to acquire Integra, we aren’t sure about that. Coeur’s limited cash position and equally limited financial flexibility may make an all-cash offer difficult and as Coeur doesn’t have a Canadian listing, it would only be able to use its shares as currency for a limited amount of shares. But of course, never say never, and we will cross that bridge when we get there. While we believe Integra could very well be a buyout candidate as it advances the DeLamar project, potential acquirers may want to see additional steps to de-risk the project. Permitting will for instance be an important factor to take into consideration.

In any case, the proceeds of the bought deal indicate the company’s cash position should last until next summer and we would expect the company to tap the equity markets again after completing an updated pre-feasibility which should include the potential development of the Sullivan Gulch zone.

We also noticed the company terminated its ATM program after having issued just over half a million shares for total proceeds of just under US$1.7M. The proceeds from ATM offerings are highlighted below.


It would be wrong to look at Integra using a backward-looking perspective. The 2019 PEA is already outdated and there’s a good chance the November 2021 PFS will be outdated in a few months as well. And that’s positive as it means the project is constantly evolving and expanding and more tonnes and ounces can and will be added to the mine plan.

The upcoming release of the pre-feasibility study will be an important milestone for the company and should grab the market’s attention as we expect strong economics  at $1650 gold and $22 silver.

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Disclosure: The author has a long position in Integra Resources. Integra Resources is a sponsor of the website.

Author: CR Team


Monsters of Rock: Good news continues to flow if you’re in lithium

The news continues to get brighter for lithium producers and up and comers trying to ride the same wave. Benchmark … Read More
The post Monsters of Rock:…

The news continues to get brighter for lithium producers and up and comers trying to ride the same wave.

Benchmark Mineral Intelligence data from November shows spodumene prices continued to climb, rising 17.3% month on month in November to an average of US$1525/t FOB Australia.

That’s 301.3% up in just 12 months and more than 290% higher year on year.

Prices are so far beyond levels of just a year ago (in around the US$400/t mark) that US$1250/t is now the low point of recorded sales, which ranged as high as US$1800/t.

Starving battery manufacturers are paying as much as US$32,000/t to get their hands on uncontracted lithium hydroxide chemicals, with prices up 5.4% MoM and 92.1% YoY to US$19,500/t FOB North America and prices in China averaging $30,300/t, up 2.1%.

The inflection on these index charts is so hectic it looks like a goddamn cobra about to strike.

Lithium price indexes
Pic: Benchmark Mineral Intelligence

On a weighted average basis hydroxide prices were up 6.2% to US$25,894/t, while carbonate prices are up 2.8% to US$23,798/t.

BMI analyst George Miller said the supply-demand situation left producers very much in control during contracting season.

“Activity in the domestic Chinese lithium chemical market picked back up in the latter half of November, as buyers looked to restock inventories ahead of the Spring Festival. The increased demand drove upward price pressure as trading gained pace following a quiet period at the end of October and during early November,” he said.

“Outside of China, prices also continued to rise during the ongoing contracting season, as buyers became increasingly willing to accept higher prices to secure any available lithium supply towards the end of 2021 and into 2022.

“Furthermore, producers sought to introduce more regular pricing breaks in contract structures given the potential upside on the back of supply deficit expectations, lifting the bottom end of prices as contracts begun to be revised higher amidst ongoing negotiations.

“The upper end of the range of recorded prices also ticked upwards, with lower volume spot transactions shifting towards Chinese domestic prices in response to very limited availability.

“As such, the Benchmark Lithium Price Index rose by 4.4% m-o-m in November, which alongside rising demand, was driven by expectations of a widening supply deficit into the New Year and continued international demand growth in Q4 2021. High prices and robust demand gave way to a stream of investments into the lithium value chain in November, in particular, Chinese incumbents striking deals with western companies in pursuit of supply expansions.”

China, which is increasing its production of lithium-iron-phosphate battery chemistries, has imported almost 70,000t of lithium carbonate this year, 80.8% up on the same period in 2020, while European demand for EVs remains high.

Sales were up 91.1% year on year to 180,000 units.


Lithium mid-tiers rule the roost

With that in mind it was lithium project developers that dominated the gains in the materials sector today.

AVZ Minerals (ASX:AVZ), owner of the giant Manono project in the DRC was up 14.16% after a big feature Q & A in Stockhead’s morning newsletter, while Vulcan Energy (ASX:VUL) rose 6.23% and Ioneer (ASX:INR) climbed 7.83%.

Among the large caps oil and gas stocks Woodside and Santos were up after Oil Search shareholders approved their mega merger with the latter to create a $23 billion energy major.



Lithium stocks share price today:


The post Monsters of Rock: Good news continues to flow if you’re in lithium appeared first on Stockhead.

Author: Josh Chiat

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Resources Top 5: Hopeful uranium stocks, an important graphite deal, and lots of imminent news flow

Aspiring graphite miner Black Rock invited to finalise agreement with Tanzanian government Cauldron Energy dusts off Yanrey uranium project, despite ……

  • Aspiring graphite miner Black Rock invited to finalise agreement with Tanzanian government
  • Cauldron Energy dusts off Yanrey uranium project, despite government opposition
  • Redstone (copper, cobalt), Latrobe (magnesium) and Empire (gold, copper, nickel, PGEs) up on no news

Here are the biggest small cap resources winners in early trade, Tuesday December 7.



(Up on no news)

When the WA state government implemented a ban on most new uranium mines in 2017, CXU stopped work at its flagship ‘Yanrey’ uranium project and began searching for other dirt to play with.

It now has a historic gold project called ‘Blackwood’ in Victoria and a silica sands play called ‘Ashburton’ in WA. It is also poking around Yanrey again, which is a lot more interesting now that uranium prices are on the move.

While government support (or lack thereof) for new mines has not changed, a recent survey uncovered a bunch of “highly prospective targets for follow-up drilling” at Yanrey.

“Our ultimate objective is to explore for uranium mineralisation amenable to extraction by ISR,” CXU exec chairman Simon Youds says.

“Economic deposits of sandstone-hosted, palaeochannel-style uranium can be mined using ISR in the lowest cost quartile of uranium mined globally.”

“This characteristic makes these deposits extremely attractive for mining at any uranium price and necessarily must form the basis of any uranium resource portfolio.”

Yanrey exists within a larger uranium province that is slowly being uncovered, Youds says.

“There is potential here for a scale comparable to the best uranium-endowed province globally and that, with astute leadership, Western Australia is at the threshold of a new energy resources boom.”

At Blackwood, CXU has stumbled upon visible gold in an underground area historically excavated for access purposes only:

“The visible gold observed, coupled with the beautiful sandstone-shale contact and structurally complex geology, provides an exciting new target for drill testing,” Youds said in November.

“The observation of visible gold further increases our confidence in the remaining mineral potential of these historical mines.”

The $11.5m market cap stock is down 6% over the past month, and 30% year-to-date. It had $1.5m in the bank at the end of September.



(Up on no news)

The nanocap, which has partially bounced back from recent losses in early trade Tuesday, is drilling to grow the 38,000t copper, 535t cobalt ‘Tollu Copper Vein’ deposit, part of the ‘West Musgrave’ project in WA.

Tollu hosts “a giant swarm of hydrothermal copper rich veins” in a mineralised system covering a +5sqkm area, ~40km from OZ Minerals’ (ASX:OZL) world-class Nebo-Babel nickel-copper deposit.

A conceptual (theoretical, not real yet) exploration target suggests up to 627,000t of copper may be present, the company says.

Recent portable XRF analysis of new drilling returned hits like 16m at 2.62% copper from a 74m downhole, including 6m at 6% copper from 76m.

These will be confirmed by traditional assay, the company says. Labs are backed up to the hilt, so who knows when that will be.

RDS say exploration will continue “at the earliest opportunity” in 2022 with a deeper RC drilling program at priority targets.

The $12m market cap stock is up 30% over the past month. It had $2.6m in the bank at the end of the September quarter.



It’s been a good news week for aspiring graphite miner BKT.

Today it announced it had been invited by the Mining Commission to attend a ceremony in Dar es Salaam, Tanzania on Monday 13 December “to finalise an agreement with the Government of Tanzania”.

Black Rock managing director John de Vries is currently in country and is expected to attend, BKT says.

The company has also just completed a massive 500t pilot plant run – the largest ever, it says — to send off for qualification (testing) to potential customers in North America, Asia and Europe.

This will ultimately support project financing, BKT says.

The company now needs to finalise off-take terms with cornerstone investor POSCO, and secure finance to underpin a $US116m Phase 1 development capex program.

The $183m market cap stock is down 10% over the past month, and up 115% year-to-date. It had $9.3m in the bank at the end of September.



(Up on no news)

Early works – like fixing fences, site clean-up, contracting — are happening apace at LMG’s magnesium project in Victoria’s Latrobe Valley, with construction on an initial 1,000 tonne per annum magnesium plant due to kick off in Q1 2022.

Production starts up to 12 months later in Q4 2022.

The plant will be expanded to 10,000 tonnes per annum magnesium shortly thereafter, with further plant capacity expansion to be considered once it is operating successfully.

Magnesium has the best strength-to-weight ratio of all common structural metals and is increasingly used in the manufacture of car parts, laptop computers, mobile phones, and power tools.

In November, LMG said current magnesium price was US$6,150 per metric tonne and expected to hold.

“LMG’s revenue estimates are based upon US$3,250 per tonne which was the magnesium price in June 2021, before the China supply shortage commenced in September 2021,” it says.

“If the current price of US$6,150 per metric tonne held long term, it would increase LMG’s estimate of EBITDA for its 10,000tpa plant by some $56m.”

In 2020, world magnesium production was ~1 million tonnes, of which China supplied ~85%.  China has begun a 13-year plan to increase Mg in cars from 8.6kg to 45kg by 2030, requiring an additional 1 million tonnes of new Mg production per annum.

$131m market cap LMG is down 21% over the past month, and up 335% year-to-date. It has raised $11.5m  via placement to help fund the initial $39m 1,000tpa plant.



(Up on no news)

This busy polymetallic explorer has already drilled 13,000m so far in 2021 at the ‘Penny’s and Yuinmery’ projects in WA, with diamond drilling of some juicy gold, copper, and nickel-copper-PGE targets at Yuinmery due to kick off sometime this month.

ERL would’ve drilled even more if not for issues getting hold of a rig, something the company intends to fix in 2022.

“Our exploration plans for 2022 include the lock-in of a core drilling rig and driller for exclusive use by Empire,” chairman Michael Ruane says.

“This should assist in accelerating at least the drilling component of our exploration programs for the forthcoming period. The rig will be particularly useful for the deep drilling required for the promising Yuinmery targets (eg Smiths Well/YT01).”

The rig should be ready for commissioning this month, he says.

The $14.85m market cap stock is up 30% over the past month. It had about $3.5m in the bank at the end of November.

The post Resources Top 5: Hopeful uranium stocks, an important graphite deal, and lots of imminent news flow appeared first on Stockhead.

Author: Reuben Adams

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Energy & Critical Metals

Met testwork proves Sovereign’s Kasiya will deliver a premium natural rutile product

Special Report: Metallurgical testwork has confirmed Sovereign Metals’ Kasiya project in Malawi will deliver a premium natural rutile product, setting…

Metallurgical testwork has confirmed Sovereign Metals’ Kasiya project in Malawi will deliver a premium natural rutile product, setting the stage for the company’s landmark scoping study.

Testwork continues to demonstrate the world class nature of Sovereign’s (ASX:SVM) Kasiya deposit, with simple and conventional processing delivering levels of 95% to 97.2% TiO2 with low impurities at stand-out metallurgical recoveries ranging from 94% to 100%.

That makes Kasiya competitive on TiO2 grades with some of the world’s largest natural rutile operations like Iluka’s Sierra Rutile and Rio Tinto’s Richards Bay Minerals.

It opens the door for discussions with tier-1 offtakers in the markets for TiO2 pigment, titanium metal and welding, where customers are facing widening supply deficits in a strengthening market.

Additionally, testwork has shown conventional flotation methods can be used to produce a coarse flake graphite by-product from rutile gravity tails with 60% at a coarseness of +150µm, suggesting it will have a high basket value when sold to market.

A program at SGS Lakefield in Canada confirmed simple processing methods delivered a very coarse-flake graphite concentrate at 96.3% TGC.

“Consistently achieving premium rutile specifications with stand-out recoveries via conventional “off the shelf” processing methods reinforces the robustness of metallurgical and processing performance of the Kasiya rutile mineralisation ahead of the upcoming Scoping Study,” Sovereign managing director Dr Julian Stephens said.

“These continued very high-quality product specifications should generate further interest from end-users across the titanium sector as the global structural deficit in natural rutile supply continues to widen.”

Processed rutile being despatched to potential customers. Pic: Sovereign Metals

Kasiya scoping study round the corner

With the results in today’s announcement, Sovereign has now demonstrated the impressive metallurgical qualities of the Kasiya resource in two separate rounds of met testwork.

The testwork also confirms Kasiya will deliver strong recoveries and product specifications based on conventional off-the-shelf processing technology, which bodes well for its future development.

Proving the original results were certainly no fluke and opening the door to interest from Tier-1 offtake customers, they set up Sovereign to release a scoping study in the coming weeks.

With most of the technical disciplines now complete, mining optimisation and capital and operating cost estimations are currently being finalised.

A new indicated mineral resource estimate is also on the way after substantial resource drilling to build upon the world-class inferred resource released in June.

That confirmed Kasiya as one of the largest natural rutile deposits in the world, with an inferred resource of 644Mt at 1.01% rutile and a high-grade component of 137Mt at 1.41% rutile.




This article was developed in collaboration with Sovereign Metals, a Stockhead advertiser at the time of publishing.


This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Met testwork proves Sovereign’s Kasiya will deliver a premium natural rutile product appeared first on Stockhead.

Author: Special Report

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