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Thursday, January 12, 2017 Derek Macpherson

ICG Continues to Demonstrate Triangle's Potential


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Integra Gold Corp. (TSXV:ICG) announced further results from its ongoing drill campaign at the Triangle zone at its Lamaque Gold project in Quebec. The results from 17 holes, totalling ~6km, continue to suggest the likely continuity of the “C” structures’ and the potential of the C Splays to add ounces, underlining the potential for further resource growth beyond Lamaque’s recently updated resource of 1.9M oz Au (6.8M tonnes at 8.83 g/t Au - all categories at 5 g/t cut-off). Yesterday’s results were highlighted by 18.7 g/t Au over 8.1m (uncapped) in TM-16-211AM01 at C4 and 66.46 g/t Au over 5.10m (uncapped) intersected by hole TM-16-211A at C2. We believe Integra’s premium valuation, C$115/oz versus peers at C$53/oz, is warranted given the project’s location and takeout potential, existing infrastructure, and above-average grades. Upcoming catalysts include ongoing drill results and an updated PEA and resource estimate (Q1 2017).


Drill results at C4 highlighted by a wider high grade interval. Results from C4 were highlighted by drill hole TM-16-187W01M02 that intersected 11.06 g/t Au over 4.80m (uncapped) at one of the structure’s footwall splays (Figure 1) which supports the company’s thesis that the C splay structures have potential to add ounces. Infill drilling at C4 continues to return high grades, highlighted by drill hole TM-16-211AM01 that intersected 18.70 g/t Au over 8.10m (uncapped). In our view, these results are positive and continue to suggest the potential for further resource growth.


Infill drilling at C2 bodes well for upcoming bulk sampling. At C2, drill hole TM-16-211A intersected 66.46 g/t Au over 5.10m (uncapped). In addition, hole TM-16-215 intersected 9.71 g/t Au over a wider interval of 8.50m (uncapped). These infill drill results continue to demonstrate the zones likely continuity and bode well for the bulk sample planned for this zone. The underground exploration ramp to be used for the program has been advanced by 510m and the company expects the bulk sampling to commence in Q3.

Integra’s premium valuation likely warranted. Integra now trades at 0.64x consensus NAV and C$115/oz versus peers at 0.56x and C$53/oz. While still trading at premium to peers, we believe this is warranted because of the project’s location and takeout potential, the existing infrastructure and above-average grades. Upcoming catalysts include ongoing drill results and an updated PEA and resource estimate (Q1 2017).


Derek Macpherson | VP Mining Analysis
Sunneva Bernhardsdottir | Associate, Mining Analysis
Victoria Ellis Hayes | Associate
 
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Integra Gold Corp. - TSXV: ICG - 1,2,4,7

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