Integra Resources: The Expensive Work Is Almost Behind Us

0:15Mining Stock Daily: Welcome back into Mining Stock Daily, everybody. It's been a while actually since we've gotten a corporate update from Integra Resources. They do trade on the Venture Exchange with ITR and on the NYSE American with ITRG. It's been a few months, actually. So there's quite a number of news items here that CEO George Salamis and I are going to tackle here, including latest updates, operational updates from Florida Canyon. And then also a little bit of a dive into where Delamar sits within the permitting process. So George, I know you are traveling this week, so thank you so much for taking some time with us.

0:57Mining Stock Daily: How have you been?

0:59George Salamis: I've been great, Trevor. Thanks for having me on again. As you know, it's been a lot of travel for everybody in the mining industry for the last couple weeks. And yeah, as much as August was a nice respite from activity, September and early October is busy.

1:17Mining Stock Daily: Yeah. Well, a lot of companies, the last time I saw you was in Beaver Creek, obviously. And, you know, most companies like to have something in their pocket to talk about into all those one-on-one meetings. Maybe we'll start with that news item that you published on the 23rd of September. So the week of Beaver Creek, George, and that's defining some new areas of growth at Florida Canyon with the drill rig. I mean, pretty positive grades and wide intercepts here of gold mineralization. So let's start there. Talk about this drill program and really what the data showed you that is going to actually extending mine life at Florida Canyon.

1:54George Salamis: Yeah, indeed. That's essentially what the feasibility study that we put out this past summer proved, which exploration is working really well. As you'll know or will recall, we started exploration or drilling at Florida Canyon almost immediately upon acquisition almost two years ago. and the first sort of year and a half of drilling that we did at Florida Canyon really bared a lot of fruit, right? In the feasibility study, we showed 78 % reserve growth. We extended the mine life out to eight years. So it kind of proved that exploration was working really well. So we obviously in 2026, we decided to keep it going in other areas where we thought maybe there's some additional mine life beyond the eight years sitting there.

2:44George Salamis: And obviously we've got a pretty high conviction of that as a result of the results that we put out only a couple weeks back.

2:51Mining Stock Daily: Yeah. You know, you and I have chatted throughout the year. You knew 2026, trying to get Florida Canyon really optimized in a better position. It was going to take some time, some capital, and a lot of patience here. But we are kind of leaning into that last quarter of the year here, George. can you give us a sense to some of these dynamics and the numbers with Florida Canyon uh is 2027 look to be that pivot point indeed yeah so I mean when we bought the mine a couple

3:24George Salamis: years back we knew that 2026 was going to be a big expensive year for us in terms of our our need to reinvest into the into the asset to to make it better to align it for the future and You know, we're in the thick of it now, right? The, you know, maximum tons mined right now, record tons mined both ore and waste right now. A lot of waste being moved to get at that key central zone, which is a higher grade, better leech kinetics, easier mining for us than certainly right now. that will be behind us as of the end of the first quarter of next year. So, you know, knowing that 2026 was going to be a big year, an expensive year, it was going to hit our ASIC.

4:06George Salamis: We knew that was coming, you know, that, but that comes to an end next year. And the light is at the end of the tunnel in that respect.

4:14Mining Stock Daily: Yeah, you raised, you lifted your ASIC to up to$3 ,500 an ounce. So that was a pretty big hit. But the feasibility study still pegs that life of mine ASIC at just about$2 ,300 an ounce. So a lot of improvement. So beyond that royalty uplift from the higher gold deck, how much of that, I'm just kind of curious, the input costs from this year. Diesel, explosive, some of those input costs. How are we supposed to be looking at energy prices here in that ASIC?

4:46George Salamis: Yeah, so that ASIC is not really being affected by diesel prices or explosive prices. And really what triggered the guidance revision was that feasibility study that we put out. It basically said, if you want to set up for a much better eight years of high levels of production, lower costs, this is what you have to do now for the next six months. You have to spend a lot of money, obviously, upgrading the fleet, where we were well into that earlier this year. But we also have to spend money in expanding the heat bleach pad capacity, which was actually planned for next year. But we decided to move it into this year so we could set up next year properly.

5:30George Salamis: And so all of these things are hitting ASIC this year, there's no question. But those will be behind us pretty soon here. We've got another couple of expensive quarters coming up here, but we'll be well past that next year. We are guiding next year on something that looks like 80 ,000 to 85 ,000 ounces, significantly lower costs. The costs will trend downwards from there, starting again at the end of the first quarter of next year. We're looking at life of mine ASIC of 2350 for the balance of the next eight years. So, significantly improved over what ASIC is now. Okay.

6:07Mining Stock Daily: Year to date, you're at just over 29 ,000 ounces. So H2 really needs to come in pretty strong to meet that 70 to 75 ,000 ounce kind of band of guidance there. kind of walk us through i don't think i we haven't seen q3 yet but that's going to be kind of hitting the tape here pretty soon can you give us kind of a sense of you know headwinds or you know tailwinds here to really make that guidance really start to

6:40George Salamis: to meet it up by the by the end of 2026 yeah indeed so i mean q1 was was not a great quarter for us. We were hit with a number of, I'm going to say, small issues which were corrected in Q2. So, you know, there was a net improvement Q1 over Q2. I think we went up about 30 % in the ounces produced from Q1 to Q2. You'll see better in Q3 and you'll see better than that in Q4. And Q4 obviously needs to be a big quarter for us. It will need to be something that looks like close to our record, uh, quarterly production for that operation going back 25 years. Uh, but we think we can still get there.

7:21Mining Stock Daily: Okay. So you're pretty confident. We are. Yeah. Okay. Okay. Very good. All right. That definitely be one to watch in those production numbers. We've seen a lot of peers starting to publish those numbers. Is that expected here within the coming days?

7:33George Salamis: Yes. Correct. Yep. Okay.

7:35Mining Stock Daily: All right. Well, this, we are recording this Friday morning, so this interview will not be published until early next week. So we'll see. maybe those numbers get published before, before the interviews. We'll see, we'll see how that sequence happens. I wouldn't count on that.

7:49George Salamis: I wouldn't count on that. All right. All right.

7:51Mining Stock Daily: Good to know. Good to know. All right. Uh, there is a couple of things that, you know, some growth capital for that heat bleach expansion, uh,$92 million there. Uh, there's some, some fleet work in that plan as well. It's kind of curious how much of that lands in 2027 how much how is it being funded through operations at florida canyon uh so it is being

8:15George Salamis: funded through the the operations and cash flow so there's no need to go back to the to the market obviously to do any of this trevor we've got 115 million dollars cash in the treasury um so yeah there's no need for capital raises so everything that we're doing now is being is fully funded by cash flow and treasury uh and that includes obviously delamar and the and the what they what we like to call state of good repair uh work or or or what what what did we use previously um early works i guess uh and uh that's all coming along well so yeah that's all funded from cash

8:51Mining Stock Daily: flow right now okay but it's not competing with any stuff that needs to be allocated for delamar

8:57George Salamis: No, no, Delamar's already fully allocated and it's being spent.

9:01Mining Stock Daily: Okay, very good. All right, we're going to talk more about Delamar here in just a little bit here, but one last question before we get there. Sure. Madre Shear North and the North Dump, some very interesting results there with the drill, 62.5 meters and 1.3 grams per ton. That's a high-grade intercept at Madre Shear, George.

9:23George Salamis: Well, think about that. Yeah, that's six times the average grade of what we're processing right now, right?

9:30Mining Stock Daily: Yeah.

9:30George Salamis: So in the land of our current head grades, which are kind of 0.2 to 0.25, yes, shockingly low, but we make money certainly down at that level. Those grades that we hit at Madre and as well in that saddle area between the central zone and the radio tower pit, certainly better grades than what we're mining now or that are in fact in the mine plan for the next eight years.

9:58Mining Stock Daily: So what is the realistic like kind of timeline here for Madre Shear to kind of show up into your reserve statement?

10:06George Salamis: Yeah so I mean we're working on budgets for next year but clearly Madre Shear needs more drilling to get into a mine plan. I mean the you know that when you're finding when you're getting intercepts like that that are so close to your active mining areas and pits, you know you need to kind of keep going to get that in so you can continue mining, bringing that into a mine plan. Those are the ounces that are worth certainly more than the ounces that you'll mine sort of eight, ten years down the track. So we're looking at budgets for that, but there will be certainly more drilling on that. In fact, we've got more drilling to be announced between now and the end of the year.

10:44George Salamis: That press release that we put out was about a third of the way through the 42 ,000 meters that we have for Florida Canyon. So there's lots more to come. Yeah, both of those are great targets. My personal preference would be that saddle zone between Central Pit and Rideau Towers because it's such a big area and it's not in a resource or a mine plan right now.

11:09Mining Stock Daily: Okay. Do you have some physical data that kind of points and highlights the potential for this area? What are you working with?

11:15George Salamis: We're working with past exploration drilling, not enough of which is to, you know, would get any of that stuff into even a resource, let alone a reserve. But, you know, indications of, yeah, there's some thick intervals of oxide mineralization there starting at surface, which if we keep following up on and we keep getting these results that we're looking at or we've been releasing so far, indicates, yeah, you know, zones that are maybe two, 300 meters long by a couple hundred meters wide that could easily fall into the context of open pit mining, you know, on extension from where we're mining right now.

11:53George Salamis: Okay. Very good. All right.

11:55Mining Stock Daily: So more to come here from Florida Canyon, George, hopefully you and I chat about that a few more times before the end of the year. As promised, I do want to pivot to Delamar because you flagged some meaningful inbound interest from debt providers. This is very interesting here. Debt kind of seems to be the way of the land, given where we're at with current metals prices and things look pretty favorable on the debt side of things and non-dilutive or at least least dilutive, I guess you could say. I'm just kind of curious, have you have formal mandates been issued in terms of sheets exchanged on the project for debt for the Delamar development?

12:40Mining Stock Daily: I mean, you're moving quite along. Obviously, the NEPA scoping's done. You're in the Fast 41, so people can take a look at that, where it's at in the process. It's all kind of pointing towards a Q3 2027 record of decision for Delamar. So I'm just kind of curious, where does the financing kind of stand here today?

12:59George Salamis: Yeah, so I think what you're alluding to here is the discussion we had regarding everybody who's in the pre-development or development space right now is in a position where they need to start looking at project financing alternatives. All the projects like Delamar and there are a host of others out there that have gone from PEA to PFS to FS and that are in permitting have to start considering this. And we're in that category ourselves. um you'll see some news out soon about about you know what we're contemplating in terms of support uh on that on that end from a debt financing perspective i can say that you know unsolicited um draft term sheets and and things like that um are being shown to us and i can also say that in my, you know, almost 35 years in the business, I've never seen terms like this for project financing for a one asset or two asset company of our size, right?

14:02George Salamis: The really, you know, interesting looking terms and kind of a sign of the times, right? I think in terms of interest in gold, margins that are, that, that lenders, you know, can see clearly de-risking projects such as Delamar, for example. I'm surprised and I'm not, I guess.

14:24Mining Stock Daily: Who has the better hand here, the lenders with the current interest rates or the developers with the great margins?

14:33George Salamis: That's a good question. I think it's project dependent in the end of the day. I think we're in a bit of a special case here, Trevor, because we do have production, we do have cash flow that underpins the company, so that makes us lower risk. in the end of the day, when we're looking to finance a project like Delamar, Delamar will be already somewhat down the not fully de-risk path, but partially de-risk path by the time we get to an FID, because we are spending a significant amount of money, you know, in advance of a permit doing things on the project. So I think we're in a bit of a different case relative to others, maybe when it comes to terms, but we've got a year to figure that out.

15:16Okay.

15:17Mining Stock Daily: All right. George, thanks so much for your time. I know you're on the road, so I'm not going to take too much of it. I can't thank you enough. It was good to see you here in Colorado, as always, and we look forward to the next conversation. So we'll have a few things to talk about here in the next couple months.

15:33George Salamis: Trevor, great as always. Great seeing you in Beaver Creek. Great seeing you at your event, by the way, which was stellar. Thank you. And thank you very much.

15:40Mining Stock Daily: Thank you. All right, everybody. That's your update from Integra Resources, again, trading on the venture with ITR. And on the NYSE American with ITRG, I am a shareholder and Integra has been a longtime supporter of MSD. We got more to come, so stay tuned. The information presented should not be considered investment advice. Mining Stock Daily Yants affiliates are not responsible for any loss arising from any investment decision in connection with the material presented herein. Please do your own research or speak with a licensed financial representative before making any investment decisions.

16:16Thank you.