2 August 2012 UPDATE ON COCK-EYED BOB … · 2 August 2012 168 Stirling Highway Nedlands Western...

2 August 2012

168 Stirling Highway Nedlands Western Australia 6009 · PO Box 612 Nedlands WA 6909 · T 61 (8) 9423 5920 · F 61 (8) 9423 5930 E [email protected] · W www.integramining.com.au ABN 54 093 278 436

UPDATE ON COCK-EYED BOB UNDERGROUND MINING INCREASING CONFIDENCE IN THE POTENTIAL FOR THREE LONG-LIFE UNDERGROUND MINES Integra Mining Limited (ASX:IGR, Integra) is pleased to report that the trial mining at Cock-eyed Bob, part of the Company’s Randalls Gold Project (Figure 1), is progressing very well and it is expected that a parcel of +40,000 tonnes of high grade material will be batch treated in the December Quarter and recovered gold reconciled against the development forecast.

Gold mineralisation at the Cock-eyed Bob deposit is hosted in two parallel mineralised banded iron formation (BIF) units. Mineralisation widths encountered on the upper ore drive are wider than expected - up to 6 metres or more - and a twin-boom jumbo drill rig has been deployed to accelerate development of the hangingwall lode ore drives. Given the mineralised widths encountered to date, it is possible that the trial mining may produce a greater volume of mineralised material for processing than originally thought. Once the upper hangingwall ore drive is completed, the parallel footwall lode will be drilled to help plan the location of stoping blocks, this is occurring while the lower hangingwall ore drive is completed.

Excellent grades have been encountered in the drives to date and Integra is increasingly confident that the trial mining exercise at Cock-eyed Bob will demonstrate the viability of underground production from the three BIF-hosted gold deposits; Cock-eyed Bob, Santa and Maxwells. Additionally, ground conditions in the mineralised BIFs and in the highly competent country rock have been excellent.

Using typical underground lower cut-off grades of 3.0 g/t gold, Mineral Resources reported in compliance with the JORC Code (see ASX announcement 25 January 2011) at the respective deposits are:

Cock-eyed Bob: 619,000t at 5.60 g/t gold for an estimate of 111,500 contained ounces,

Santa: 978,000t at 5.70 g/t gold for an estimate of 178,100 contained ounces,

Maxwells: 1,573,000t at 5.80 g/t gold for an estimate of 291,100 contained ounces,

for a total of 3.2Mt at 5.70 g/t gold for an estimate of 580,000 contained ounces. Mineralisation at all three deposits remains open at depth and have i been drill tested to a relatively shallow depth of 300m-400m.

There is significant opportunity to demonstrate the viability of underground mining at the three BIF-hosted gold deposits for relatively low cost and low risk, yet with the potential to ultimately access a significant additional source of high-grade material to supplement the existing open pit Ore Reserves. As at July 2012 (see ASX announcement 9 July 2012), Integra’s open pit Probable Ore Reserves were 7.1 million tonnes at 2.3 g/t for 510,000 contained ounces, or six years of mine life at the current processing rate of 1.2 million tonnes per annum. To date Integra has no underground Ore Reserves but once a production history is established, underground Ore Reserves may be added to Integra’s Ore Reserve inventory.

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All deposits are open along strike and at depth. Each of the three deposits has been drilled to a vertical depth of between 300 metres to 400 metres depth and all demonstrate the depth persistence of high-grade gold mineralisation. There is no known geologic reason prohibiting this high-grade gold mineralisation extending to materially greater depths than currently drilled. Integra has all of the historic open pit Mineral Resources drilling data and production grade control drilling data as well as reconciled production data from the Cock-eyed Bob, Santa and Maxwells open pits providing a high degree of confidence in the overall grade performance of these deposits. All evidence to date would indicate that the grade and overall gold endowment of these open pits will persist at depth. The trial mining exercise has employed full-scale mining dimensions allowing for commercial production to continue directly on from the trial once Board approval has been received. If the orebody widths, grade and continuity continue to perform to expectations, the development in place and planned will allow for over 500,000tpa of underground production from the three BIF deposits providing high-grade supplementary feed to Integra’s already sizeable open pit Ore Reserves. Gold Mineralisation Controls The Randalls deposits of Cock-eyed Bob, Maxwells and Santa are well bedded and laminated Banded Iron Formations (BIF) hosted in massive to bedded, fine to medium grained greywackes, siltstones and sandstones. Gold mineralisation is located in folded, steeply-dipping BIF units within the sedimentary units, varying between 0.5m to 8.0m in thickness. There are often 2 to 3 parallel mineralised BIF horizons. Mineralising fluids are introduced into the sequence via chlorite-rich shears oriented sub-parallel to bedding, or via flat-lying veins which have intersected the chlorite-rich shears. Gold is deposited by chemical reactions of gold rich fluids with the iron-rich BIFs. High-grade gold mineralisation in all three BIF hosted deposits is believed to be controlled by the intersection of the vertical to sub-vertical host BIF units and a series of south plunging quartz ladder vein arrays, the intersection of which plunges approximately 50 degrees to the south (Figures 3). Due to the very ‘nuggety’ nature of the gold mineralisation, with abundant visible gold common, the ability of the Mineral Resources model (based on the current density of drill data) to reflect the coherency of these high-grade zones is limited while the previous close-spaced open pit grade control data more clearly reflects the noted geologic controls. Integra considers that further drilling from surface would have been prohibitively expensive at the density required to reliably define the high-grade zones and that trial mining will provide greater understanding both of the true gold endowment and will also provide invaluable experience of the ore body behaviour, mining recoveries, mining dilution and ground support required. The expectation is that actual underground mining and mapping will provide greater definition of the geologically and structurally controlled high-grade gold zones and the distribution of extreme high-grades noted in the surface drilling.

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Development and Mining Once development is complete the primary mining method at Cock-eyed Bob is envisaged to be mechanised longhole retreat open stoping. A crown pillar will initially be maintained under the existing Cock-eyed Bob open pit. The trial mining is expected to recover 44,000 tonnes of high grade material.. The mined material will be campaign treated as a batch at the Salt Creek process facility to provide accurate reconciliation of the Mineral Resources model to actual recovered gold. During January infrastructure including offices, compressors and generators were mobilised to site (Figure 5). In February the mine portal was established using airleg and jumbo mining and subsequently shotcrete with fibrecrete (Figure 6).

On the 4th April, the first gold mineralised BIF at the Cock-eyed Bob underground was intercepted at 96 metres along the decline (with 14 metre cross-cut). Mining is currently progressing on the Footwall South ore drive on the 396m RL and access to the level below has commenced. By July the decline was completed to the third ore drive approximately 100 metres below surface.

Observations suggest that high grades occur in the sulphide-rich altered halo immediately adjacent to cross-cutting quartz veins, decreasing with both distance and increasing magnetite content. The high-grades are found in both the sulphide-rich altered near-vein BIF and in the magnetite-rich vein-distant BIF (Figure 7). Selected face photos are for levels 396 and 420 are shown in Figures 8 to 9.

If, as expected, the trial is successful, Board consent would be sought to continue underground production from Cock-eyed Bob and to commence underground development of the Santa gold deposit early in 2013.

Yours sincerely, Chris Cairns Managing Director Information in this announcement that relates to Exploration Results, Mineral Resources and Ore Reserves has been reviewed by Chris Cairns, Managing Director who has sufficient experience 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 Persons 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 Australian Institute of Geoscientists and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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Figure 1 – Integra tenements and project location plan.

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Figure 2 – Cock-eyed Bob Location Plan.

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Figure 3 - Conceptual Underground Mine at Cock-eyed Bob and Block Model at + 3.5 g/t Au showing plunging high-grade gold mineralisation trends.

Figure 4 - Mine Development at end of July

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Figure 5 - Site office at Cock-eyed Bob

Figure 6 - Cock-eyed Bob portal.

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Figure 7 -Textural sampling from the 396 Access (a) on the south wall and (b) on the north wall, both within the hangingwall BIF zone. In both of these

sample areas, iron is present as magnetite in the BIF at distance from the vein, and increasing present as pyrrhotite and pyrite.(QZ – quartz, SIFS- Sulphide-facies Iron Formation, SIFX – Oxide-facies Iron

Formation)

Figure 8 – Cock-eyed Bob Face CBF0070 on Level 396 (mark-up of interval in metres below line and gold grade in g/t above line in red). Mineralised Interval is 9m at 3.21 g/t Au.

9m @ 3.21 g/t Au

0.4 0.2 1.3 0.8 0.8 0.3 0.3 0.6 0.6 0.4 0.2 1.2 0.7 0.6 0.6

0.01 0.005 0.005 5.73 0.24 5.00 0.25 0.71 7.86 8.93 1.00 0.66 15.10 0.95 2.80

CBF0070 Level 396

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Figure 9 – Cock-eyed Bob Face CBF0028 on Level 420 (mark-up of interval in metres below line and gold grade in g/t above line in red). Bottom face grade 2.15m @ 15.44 g/t Au.

Top face grade is 2.35m @ 10.06g/t Au (minimum 2m mining width).

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2 August 2012 UPDATE ON COCK-EYED BOB … · 2 August 2012 168 Stirling Highway Nedlands Western...

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