Confidence in the exploration potential around and under a seemingly robust looking Lamaque gold project, and in further potential cost cuts, could be the trigger for a more imminent move on circa-C$380 million takeover target Integra Gold (TSXV: ICG).
The Quebec-focussed gold developer’s share price is not exactly on fire at present, reaching C87c earlier this month and currently at 79c. It was trading at 52c back in December when the sector took a pre-Christmas break. Integra has since bounced up like others and reaction to this week’s updated Lamaque preliminary economic assessment (PEA) could strengthen ahead of a further resource “update” that takes into account 105km of drilling last year.
Multi-national gold miner Eldorado Corp bought 15% of Integra at C28c/share back in August, 2015. It has interests in Turkey, Greece, Serbia, Romania and Brazil, but is missing a decent gold asset in its backyard.
“The location of the Lamaque project along the eastern end of the prolific Abitibi gold belt could make ICG an attractive takeover candidate for a company looking to add to/enter the region,” RBC Capital Markets said this week.
“We believe ICG shares are currently priced at a discount based on precedent transaction multiples.”
RBC, and Integra itself, see re-rating catalysts including the upcoming resource update, ongoing exploration (six rigs on site at the moment), and development milestones on the path to production. The PEA spotlights an expected 43% IRR on a C$111 million (US$84 million) project (including pre-production revenue) producing at least 123,000ozpa over more than 10 years on current reserves.
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