Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Sigma-Lamaque facility was valued at $100m. Image: Integra
After an initial 30% jump, in lunchtime trade the Vancouver-based small-cap was off its highs at $0.29, still up 16% with nearly 3m shares changing hands, more than 10 times usual volumes.
The company is now worth $53.8 million on the Toronto venture board after surging 64% in 2014.
Integra bought the properties from Samson Bélair/Deloitte & Touche (court-appointed receiver of the assets of Century Mining Corporation which went belly up more than two year ago) for a purchase price of $7.55 million, only $1.8m of which in cash, and is also buying a crusher for $500,000 from a third party.
That’s significant discount to the replacement value of the plant, which has an operating capacity of 1,200 to 2,200 tpd, and tailings facility which were valued at $100 million (excluding gold resources) earlier this year. The Superior Court of Quebec has approved this transaction and closing expected in early October 2014.
The Sigma-Lamaque property contains 586,000 oz of Measured and Indicated gold resources at an average grade of 4.96 g/t and 1,853,000 oz of Inferred gold resources at an average grade of 6.29 g/t and Integra says underground infrastructure could potentially be integrated with its flagship Lamaque South project. The buy also doubles the firm land package.
Integra issued a preliminary economic assessment for Lamaque South in May this year outlining a 112,000 ounce per year mine at an all-in cost of $805 per ounce and which can be built for a modest $70m initial outlay.
After today’s acquisition those numbers can only improve.
