(miningweekly.com) Integra shares rally on buying Quebec’s Integra shares rally on buying Quebec’s Sigma-Lamaque mill, mine
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https://www.miningweekly.com/article/integra-shares-rally-on-buying-quebecs-sigma-lamaque-mill-mine-2014-09-04
By: Henry Lazenby
4th September 2014
Updated 3 hours ago
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TORONTO (miningweekly.com) – The TSX-listed stock of Canadian gold and diamond explorer Integra Gold on Monday rallied after announcing that it would buy the Sigma-Lamaque milling and mining complex, next to its Lamaque project in Val-d'Or, Quebec.
The junior’s shares rose by as much as 30% to C$0.35, before settling at C$0.30 apiece on Thursday afternoon.
The Vancouver-based company would buy the Sigma-Lamaque mill and mine from vendors Samson Bélair/Deloitte & Touche for C$7.55-million in cash and scrip, comprising C$1.8-million in cash and 25-million common shares valued at C$5.75-million.
Integra would also buy a crusher for $500 000 from a third party.
The company said that the purchase price represented a significant discount to the replacement value of the 1 200 t/d to 2 200 t/d mill and tailings infrastructure, estimated in 2014 by independent engineering firm WSP Canada at about $100-million, excluding gold resources on the property.
The deal also doubles the firm's land package.
Samson Bélair/Deloitte & Touche was the court-appointed receiver of the assets of Century Mining Corporation, which went bankrupt in 2012.
The TSX-V and the Superior Court of Quebec had given their conditional approvals of the transaction, and Integra expected to close the deal next month.
The company also announced a separate deal with a third-party construction materials and mining service company to sell $1.03-million worth of waste rock on the Sigma-Lamaque property, as well as a portion of certain mining concessions. The waste rock company would also assume all of the environmental reclamation obligations associated with their waste rock property, significantly reducing the overall obligation to Integra.
The Sigma-Lamaque property contained 586 000 oz of measured and indicated gold resources at an average grade of 4.96 g/t and 1.85-million ounces of inferred gold resources at an average grade of 6.29 g/t.
Integra noted that the deal provided synergies with its own Lamaque South project, owing to the underground infrastructure potentially being easily integrated. Integra in March published a preliminary economic assessment for Lamaque South, which contemplated a 112 000 oz/y operation at an all-in cost of $805/oz, with a C$70-million price tag.
"For a myriad of reasons, this synergistic acquisition is exceptionally well tailored to our future needs and comes at an attractive price with minimal impact on our strong treasury. Our primary objective in the transaction was to secure a mill to process material from Lamaque South.
“In addition to securing a mill, we gain a strong partner in the Waste Rock Company to not only assist with the purchase price, but also substantially reduce the environmental reclamation and restoration obligation.," Integra CEO Stephen de Jong said.
He added that property also came with a sizeable gold resource, which might not fit its immediate development criteria as it focused on Lamaque South's high-grade resources, but could have a “material impact” on the company's total mineral resource inventory.
De Jong said the mineral resource inventory on the property could be developed in the future, reliant on gold prices and the company's experience with mining and milling operations at Lamaque South.
Integra also held the Wawa diamond property in Ontario.
Edited by: Creamer Media Reporter