Like a tennis ball, gold has been hit back and forth across the $1,500 line by bullish and bearish headlines. The good news is that the fundamental monetary story is the one that will eventually win out, asserts Brien Lundin, editor of Gold Newsletter.
I continue to believe that this sell-off and any others will ultimately be overwhelmed by the bigger picture. In short, the fundamental necessity of currency debasement over the months and years to come will make much higher gold prices inevitable. More immediately, some of our favorite companies have making news.
Integra Resources (Vancouver: ITR; OTC: IRRZF) released compelling economics on Monday for its DeLamar gold-silver project in Idaho.
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At gold prices of $1,350 (about $150 below current levels), the project has an after-tax NPV, discounted at 5%, of $358 million and an after-tax IRR of 43%. Using current spot prices for both gold and silver, the after-tax NPV jumps to $472 million and IRR increases to 55%.
The study assumes a heap-leach mining operation that would produce 124,000 ounces of gold equivalent material annually over a 10-year mine life. All-in sustaining costs would be $619, net of silver by-product credits, and initial capex would be a modest $161 million.
The mine would produce 1.03 million ounces of gold and 16.6 million ounces of silver (1.24 million ounces gold-equivalent) over that 10-year life. Overall, this is exactly the kind of project rejuvenation I had anticipated when I added Integra to our list in April 2018.
With gold and silver both charging ahead, the advanced-stage, imminently developable deposits at DeLamar position Integrate perfectly to deliver leverage on sustained higher prices for the precious metals. It’s a buy.
Amex Exploration (Vancouver: AMX; OTC: AMXEF) continues to crank out results from its Perron project in Quebec. The latest assays come from the Eastern Gold Zone on Perron, with holes intersecting significant mineralization on the High Grade zone and the newly named Denise zone (formerly the Low Grade Zone).
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Hole 83 from the Denise zone explained the need for the name change. The hole cut an uber-high-grade 178.2 g/t gold over 1.2 meters within a broader 32.2-meter intersection of 7.0 g/t gold.
At the High Grade zone, Hole 76 returned 15.6 meters of 3.1 g/t gold, including 0.5 meters of 19.0 g/t and 0.9 meters of 32.1 g/t. Hole 83 also hit 11.1 meters of 3.4 g/t gold in the High Grade zone.
These assays remind us that Amex is chasing the kind of project that could turn into a high-grade discovery. With drilling ongoing at Perron, Amex Exploration is a buy.
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