Integra Mining Ltd (ASX: IGR)
ASX RELEASE 26 March 2010
Randalls Gold Project Put Options
Integra Mining Limited (Integra, ASX: IGR) is pleased to announce the purchase of put options at a strike price of A$1,236/A$1,237 covering 28,736 ounces of gold from the first two quarters of production at its 100%-owned Randalls Gold Project development, located 60km south-east of Kalgoorlie.
The total purchase cost of the put options was A$3 million. Of the total put options purchased 13,598 ounces mature on 31 December 2010 and 15,138 ounces mature on 31 March 2011.
With put options in place for approximately 70% of the first two quarters of production, the Company has secured a significantly higher minimum gold price than anticipated in the project�s financial model without the risk of committing to delivery of physical metal.
Additional committed hedging of a proportion of production will be required prior to finance draw-down, however, the magnitude of this additional hedging is expected to be a minor proportion of Phase 1 gold production and there is no urgency to complete this hedging in the near term.
ABOUT INTEGRA MINING
The Randalls Gold Project development is only the second integrated mining and processing new gold mine development based on a new gold discovery in Australia in the past 10 years. On Phase 1 base case production and at current gold prices, the Randalls Gold Project will generate approximately $50 million of operating profit per year and will rival or exceed the profitability of any other domestic Australian gold miner with the exception of Newcrest Mining Limited.
The Randalls Gold Project is located some 60 kilometres southeast of Kalgoorlie and Phase 1 of the project is expected to produce an average of 75,000 ounces per year for the first four years on Phase 1 mining of two open pits at an average grade of 3.1 g/t gold. The capital cost for project development has been estimated to be $64 million (see ASX announcement 30 July 2009).
Integra has allowed excess funding of the Randalls Gold Project to accelerate evaluation of early commencement of underground mining at the Maxwells, Santa and Cock-Eyed Bob banded-iron formation (BIF) hosted gold deposits with a target of increasing project gold production to approximately 100,000 ounces per annum without a processing facility expansion and then to +140,000 ounces per annum with a processing facility upgrade to 1.2 million tonnes per annum (see ASX announcement 30 October 2009). The potential underground developments and processing facility upgrade will be fully funded through existing cash reserves and project cashflow.
The Company acquired the New Celebration gold process facility 3 years ago and the facility was disassembled and stored on-site at Mt Monger. Integra has executed a Guaranteed Maximum Price (GMP) refurbishment, construction and commissioning agreement for the gold processing facility with GR Engineering Services. Refurbishment of key process facility components (ball mill and crushers) is advanced and the Salt Creek process facility site was handed over to GR Engineering on January 4, 2010 for commencement of construction. Project commissioning and first gold production is expected to be achieved in September 2010.
Yours sincerely,
Chris Cairns
Managing Director
Information in this announcement that relates to Exploration Results and Mineral Resources is based on information compiled by Chris Cairns, Managing Director, who has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the �Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves�. Chris Cairns is a member of The Australasian Institute of Geoscientists and consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.
READ CORPORATE
Public Relations Corporate Communications
T: (+61-8) 9388-1474 | F: (+61-8) 9388-1472 | E: info@readcorporate.com.au | Web: www.readcorporate.com.au
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