www.integramining.com.au
Integra Mining (ASX: IGR) transitioned from gold explorer to producer in September 2010 after pouring first gold from its flagship Randalls Gold Project.
The company has steadily built up its mineral portfolio through a series of acquisitions, joint ventures and strategic alliances, and now controls a consolidated tenement package of approximately 1,500km2 in the heart of the Eastern Goldfields of Western Australia.
Integra Mining hits record gold production of 7,909 ounces at Randalls in May
Integra Mining (ASX: IGR) has achieved record monthly gold production of 7,909 ounces in May at the Randalls Gold Project in Western Australia, following the equally impressive production of 7,609 ounces in April.
Integra has established a track record of achieving its publicly stated targets. Today's result builds on previous operational achievements of project construction on-time and under budget, and successful project commissioning to full production in a relatively short 5.5 months. This compares well to industry peers - Avoca Resources (PINK: AVORF) took nine months for the Higginsville project.
Importantly, Integra forecasts 2012 gold production cash costs to rise modestly to about $550 per ounce, and with current gold prices hovering around $1,545 per ounce, and cash costs predicted to rise only modestly in 2012, would provide juicy margins of $850-$950 an ounce.
This would maintain the company's position as one of Australia’s lowest cost and highest margin gold producers.
Significantly, the cash costs of $500/oz forecast for the June quarter and the $550/oz forecast for next year are below Feasibility Study estimates of $574/oz.
The target annualised rate of production for Randalls, located 50-100 kilometres east of Kalgoorlie, is 90,000 ounces per year equating to an average of 7,500 ounces per month.
A planned mill maintenance shutdown is scheduled in June and minor operational stoppages associated with tying-in the process plant upgrade currently in-progress will result some lost production in the month of June.
Despite these minor interruptions, the company has forecast production for the June quarter to be about 21,500 to 22,000 ounces, relative to the March quarter production of 17,600 ounces, at the economical cash cost of about $500 per ounce.
The Randalls Project comprises resources at Salt Creek, Maxwells and Cock-eyed Bob, and exploration prospects at Lucky Bay, Mohegan and Red Dale.
On March 25 Integra said it will expand its Salt Creek process facility by 25% to 1 million tonnes per annum, targeting production of 100,000 ounces per year, at an estimated capital cost of A$12 million.
Following this on March 31 Integra announced that its latest gold discoveries confirm potential for both high-grade open pit and underground production from the Santa area, which is located just 16 kilometres east of the Salt Creek gold processing facility.
In addition, results in April indicated that the Majestic discovery zone, located 22 kilometres north of the new gold processing facility at Randalls, is a significant gold mineralised system with excellent potential to be a source of open pit material.
Integra will commence trial underground mining at the nearby Cock-eyed Bob deposit later this year.
The company has a $23 million exploration budget set aside for the year, and a good cash position.
With Integra Mining achieving all of its publicly stated targets and expansion plans to move to 140,000 ounces of production, it is difficult to fathom why the company is valued at a miserly $374 million against a forecast pre-tax operating profit of A$192 million.
It seems a matter of time before this valuation has to increase.
