VANCOUVER (miningweekly.com) – Junior explorer Integra Resources has outlined a new inferred resource at the DeLamar gold/silver mine, in southern Idaho, saying it is a critical first step on an 18- to 24-month journey to develop the brownfield project.
“There is appetite in the market for new stories right now. DeLamar has been flying under the radar for a long time, and this gives us the opportunity to bring back the significant brownfield project using modern technologies,” president and CEO George Salamis told Mining Weekly Online in an interview.
Last operated by Kinross Gold and shuttered in 1998, when the gold price dawdled around the $260/oz mark, the project site is today almost entirely reclaimed, with only key infrastructure such as a good road, electricity and water connections available. The mine had previously produced about 1.6-million ounces of gold and 100-million ounces of silver.
Mere months after Integra Gold was bought out in a deal worth about C$590-million by Eldorado Gold, essentially the same team – reincarnated as Integra Resources – has reached agreement with Kinross to buy the DeLamar mine.
The C$7.5-million cash-and-scrip deal, announced in September, will give the Integra team full access to the prospective asset.
Integra said it would issue stock in connection with the transaction equal to 9.9% of the issued and outstanding Integra shares upon closing of the transaction.
The DeLamar project is subject to a retained variable net smelter return royalty payable to Kinross.
Concurrent to the DeLamar transaction, Integra has signed binding letters of intent with two private entities to acquire patented claims in the past-producing Florida Mountain gold/silver project, which borders DeLamar to the east.
The project is located 80 km south of Boise, Idaho, and constitutes roughly 2 145 ha of patented and unpatented claims, and a further 1 659 ha of leased lands with about 1 575 drill holes and 145 940 m of drilling outlined in historic databases. The average drill hole depth was less than 100 m, with only four holes deeper than 350 m, the company said.
Integra on Tuesday announced that it had completed an initial resource estimate on the DeLamar mine, mainly as a result of its due diligence work on the project during the summer months.
Defined by 1 550 historical drill holes drilled to an average depth of only 120 m, the new compliant resource estimate delineates the remaining openpit oxide, partly oxidised and unoxidised mineralisation at DeLamar, which is hosted within felsic volcanics. The resource estimate incorporates about 143 000 m of historic drilling into the global resource for the property.
Completed by Reno, Nevada-based Mine Development Associates (MDA), the inferred resource estimate was based on a 0.3 g/t gold-equivalent (AuEq) cutoff grade and comprises 117.93-million tonnes grading 0.41 g/t gold and 24.34 g/t silver, for a total of 1.59-million ounces of gold and 91.88-million ounces of silver, or 2.67-million ounces of AuEq, averaging 0.7 g/t AuEq.
A sensitivity analysis has demonstrated that by increasing the AuEq cutoff grade to 0.75 g/t, the resource estimate entails 33.72-million tonnes grading 0.69 g/t gold and 48.69 g/t silver, for a total of 735 000 oz of gold and 52.75-million ounces of silver, or 1.36-million tonnes AuEq, averaging 1.26 g/t AuEq.
Salamis underlined that the project exhibits significant exploration upside, remaining open at depth, with limited historical deep drilling below 250 m. The limited deep drill hole data available dating back to the early 1990s includes intercepts of the series of deeper high-grade veins, including 105.4 g/t gold and 41 g/t silver (105.9 g/ AuEq) over 10.7 m; 10.1 g/t gold and 116.6 g/t silver (11.5 g/t AuEq) over 18.3 m; 10.1 g/t gold and 188.1 g/t silver (12.3 g/t AuEq) over 18.3 m.
He also pointed out that historical conventional milling of past production showed excellent metallurgical gold/silver recoveries, and column leach testwork, designed to mimic potential heap-leaching, has demonstrated the potential viability of both options for any future development.
A material portion of drilled-out precious metals mineralisation remains unmined, with significant exploration potential to outline additional near-surface bulk tonnage resources, as well as high-grade underground potential using modern exploration techniques, Salamis pointed out.
“Exploration potential for additional bulk-tonnage mineralisation on the DeLamar project appears to be significant. Essentially all of the modelled mineralisation is open at depth and, considering the shallow extents of a high percentage of the historical holes, the potential to expand mineralisation that is potentially minable by openpit methods exists,” MDA said in its technical report.
Salamis also highlighted the following from MDA's statement: “In addition to the bulk-tonnage potential, there is also strong potential for the discovery of high-grade vein-type mineralisation similar to that mined in the late nineteenth and early twentieth centuries. MDA recommends further work to investigate the amenability to heap leaching, concluding that, it is possible that some portion of the current resources, perhaps a large portion, could be amenable to heap-leach processing.”
‘BLUE SKY POTENTIAL’
“With the maiden resource results in hand, we are excited by both this significant initial inferred resource estimate on the property, and the scenario that has been laid out for current and future shareholders. It is one that highlights significant potential for further near-surface bulk tonnage low-grade resources, as well as the series of high-grade veins inferred from historic drill intercepts at deeper levels, to occur beneath the lower grade openpit resource defined by MDA.
“The DeLamar project comprises a key land position within the greater DeLamar-Florida Mountain district, which we believe hosts one of the largest gold/silver low sulphidation epithermal systems in the Western US. From our analysis of the database, we can clearly see where exploration needs to focus to test both the immediate extensions of low-grade near-surface gold/silver and deeper series of high-grade gold/silver veins, on a project that has only been drilled to an average depth of 120 m from surface,” he stated.
He explained that the team believes there is a high-grade feeder system that it wants to find. “Old timers mined these vertical high-grade structures to about 120 m, processing head grades of between 30 g/t gold to 60 g/t gold. Taking into consideration that they used cutoff grades at about 15 g/t, one could argue that there still is significant mineralisation along the old workings,” he said.
Integra also on Tuesday launched a C$25-million financing to fund the cash portion of the company’s proposed acquisition of the DeLamar property from Kinross, which it plans to use to fund exploration and development expenditures at the DeLamar property, and for general corporate purposes.
Salamis said the adjacent Florida Mountain claims may be acquired by the company on or following completion of the acquisition of the DeLamar property and the offering. The acquisition of the Florida Mountain claims is conditional upon the completion of the acquisition, but embodies a standalone project, with its detached orebody.
Integra plans to implement a geophysics campaign before year-end, with about 3 000 m to 4 000 m of drilling planned for the first quarter of 2018.
However, Salamis pointed out that it is early days yet, and the project would need a minimum of 15 000 m of further drilling as the company works up to completing a preliminary economic assessment on DeLamar within the next 18 to 24 months.