Integra Mining (ASX: IGR) continues to ramp-up gold production at the Randalls Gold Project, after pouring the first gold bar a year ago in September 2010.
A facility upgrade has now been completed to process 1 million tonnes annually, with the company targeting 100,000 gold ounces produced each year.
Integra added that metallurgical recoveries are expected to improve above the forecast 93% as a result of process refinements.
This decision has already been validated by the August record of 8,873 gold ounces, (which annually equates to over 106,000 ounces), in just the first month of production post the upgrade - which exceeded the company's expectations.
Most importantly for the project, is that the forecast cash cost of production for financial year 2012 is $550 an ounce, providing a very impressive operating margin of over $1,200 an ounce - based on the current spot.
Integra said that the record production was even more encouraging considering the unplanned four day shut down during the month to replace a primary mill pinion gear bearing.
To continue the current smooth production process, the company currently has 1.4 years of stockpiled medium grade ore, which already has the mining cost paid.
The recent 94% boost in ore reserves to 480,000 ounces provides for a minimum 6 year mine life from open pit sources, which doesn't include any underground production potential, or other assets being brought into ore reserves.
Underground trial mining is currently due to kick off before the end of 2011.
John Fitzgerald, the chairman of Integra, outlined in the company's annual report - which was also released today - that the company is now a low cost producer with a growing mine life.
The company is now in a very strong position and well placed to take advantage of both the high gold price and the continued rationalisation we expect to see in the Australian gold industry over the coming year.
The company has now established itself as a low cost producer with a substantial operating margin.
Subsequent to year end the upgrade to the processing plant to a nominal capacity of 1 million tonnes per annum was also completed ahead of schedule and in line with budget. This upgrade will enable the company to increase production over the coming years.
The company has built up a large stockpile containing 68,500 ounces of gold and this along with the expanded plant capacity provides both considerable flexibility and reduced operating risk for the project.
The maiden Mineral Resource and Ore Reserve at Majestic were the highlights of another successful year for
Integra’s exploration and projects teams.
The company sees exploration as its key strength and has committed $23 million over the coming financial year to increase existing resources / reserves and test promising targets in the Randalls and Aldiss projects.
Mine life was extended to 6 years with the addition of new Ore Reserves at Majestic, Harry’s Hill and Maxwells and further extensions are expected over the coming year.
We are in a strong financial position with modest debt, cash reserves of $38 million at year end and substantial cashflow generation from the Randalls Gold Project.
Our primary objectives are to grow the company’s reserve base and build long term profitability.
This will be achieved by further exploration success and exploitation of our large underground Mineral Resource base in the Randalls region.
Trial mining at Cock-eyed Bob, being the first of three underground deposits in the Randalls region, will commence during the coming year and this is a very important step in our long term growth plans.