DeLamar gold project, US – update

29th April 2022 By: Sheila Barradas - Creamer Media Research Coordinator & Senior Deputy Editor

DeLamar gold project, US – update

Name of the Project
DeLamar gold project.

Location
South-western Idaho, in the US.

Project Owner/s
Integra Resources.

Project Description
DeLamar could potentially become one of the biggest silver producers in the US at peak production.

The prefeasibility study (PFS) on the project, relative to the preliminary economic assessment completed on the project in 2019, is for a materially different and larger scale project, both in heap leaching and milling.

Two options have been proposed – a combined Stage 1 and 2 project, and a Stage 1 heap-leach-only project.

The combined Stage 1 and 2 proposal envisages an openpit mine, with on-site treatment of oxide and mixed ores through a 35 000 t/d heap-leach facility at 80% passing 12.7 mm, and the treatment of a portion of the nonoxide mineralisation through a 6 000 t/d mill using conventional grind, flotation, regrinding and cyanidation of the concentrate.

Heap leaching of Florida Mountain ore will start in Year 1, with mill construction beginning in Year 1 and production starting in Year 3.

In Year 2, oxide and mixed ore from the DeLamar deposit will be mined with the nonoxide ore being accessed from the DeLamar and Florida Mountain deposits starting in Year 3.

Cumulatively, the project will process 123.48-million tonnes of ore over a 16-year mine life, producing 1.15-million ounces of gold and five-million ounces of silver.

The strip ratio over life-of-mine (LoM), waste-to-ore, is 2.21.

The Stage 1 heap-leach-only proposal includes a 35 000 t/d openpit, sourcing oxide and mixed ore from the DeLamar and Florida Mountain deposits.

The proposal envisages production of 136 000 oz/y of gold equivalent over seven years. Total payable production over the LoM is estimated at 749 000 oz of gold and 16-million ounces of silver.

Stage 1 will enable Integra to start development and operation of the project at lower cash costs, with flexibility on whether to proceed with Stage 2 in Year 1.

Integra believes that a two-stage development reduces risk because of the greater flexibility to respond to the prevailing economic environment with regard to a decision to pursue Stage 2.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
In the base case, the combined Stage 1 and 2 proposition estimates an after-tax net present value (NPV), at a 5% discount rate, of $412-million and internal rate of return (IRR) of 27%, with a payback of 3.3 years.

Capital Expenditure
Preproduction capital for the combined Stage 1 and 2 project is estimated at $282-million.

The heap-leach-only proposal requires capital expenditure of $273-million.

Planned Start/End Date
Not stated.

Latest Developments
Integra Resources has announced that it is advancing the heap-leach stage of its DeLamar project into permitting and development on a standalone basis.

The company has emphasised that the low-cost, low-risk strategy to focus on the financial engine of the project – the heap leach – does not negate the strong optionality of the project in multiple areas.

“Integra’s 2022 DeLamar PFS highlighted an abundance of optionality derived from a myriad of development scenarios to advance the asset,” says president and CEO George Salamis.

Based on data provided in the PFS, and despite the fact that the project was costed out during a period of high inflation, the heap-leach operation at DeLamar showed solid returns with an after-tax NPV, using a 5% discount, of $314-million and an after-tax IRR of 33% at $1 700/oz gold and $21.50/oz silver.

The heap-leach operation will produce about one-million ounces of gold equivalent on its own.

During the eight-year heap-leach operation, the project averages 136 000 oz/y of gold equivalent with site-level all-in sustaining costs (AISC) of $814/oz.

The heap-leach standalone strategy will result in total project capital savings of more than $235-million and a decrease in site-level AISC of 15%, Salamis notes.

"The strategy also simplifies the future permitting, financing and construction plans since permitting and financing the heap leach as a standalone mine without the mill initially, is viewed as a lower-risk strategy. When fully developed, DeLamar has the potential to become one of the lowest cost and largest heap-leach mining operations in North America that is not currently owned by a major producer,” Salamis has said.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
Integra Resources, tel +1 604 416 0576 or email info@integraresources.com.