In July 2016, Integra Gold commenced underground exploration at the Triangle Deposit. This was a big step forward for the Lamaque Project for two main reasons:
1. Underground exploration de-risks the project. Bulk sampling, close spaced definition drilling, test mining and larger scale metallurgical testing provides invaluable information required to proceed to eventual mine development.
2. Underground exploration is a major step towards production and cash-flow. The 13-16 month underground program, with a budget of more than $30 million, is the critical next step.
To be clear, the underground exploration program is not development work. Until we see the results of this program we are not in a position to make a full-blown development and production decision. We do believe that if everything works out the way we expect it will, we will be a lot closer to gold production and cash-flow than we are today. This is from both a timing and capital expenditure perspective.
In summer 2015 we made the decision to begin installing the surface infrastructure required for an underground exploration program. With environmental permits, bonds and accepted reclamation plans in place, we were ready to start underground preparation. During the final six months of 2015, we spent $6 million installing the necessary portal, garage, dry, offices, roads, power, sewage and gas lines.
In July 2016, Integra hired Promec Mining Inc. to build the underground ramp. Exploration drill stations will be set up along the way to the Triangle deposit as the ramp advances at an estimated pace of ~175 meters per month.