Interview with George Salamis, President & CEO of Integra Resources (TSX-V: ITR)

Integra Resources is a development-stage mining company focussed on the acquisition, exploration and development of Gold-Silver properties in the Americas. The central priority of Integra Resources is the advancement of its DeLamar and Florida Mountain Gold-Silver Deposit on the DeLamar Project, Idaho. The management team is the former executive team of Integra Gold, renowned for turning a CAD$15M company into a CAD$590 million (sold to Eldorado).

2019 was a good year of Integra Resources, and it has started off 2020 on the right foot. With a market cap of CAD$146M, Integra Resources has a share price of CAD$1.25, up from CAD$0.62 in May. This rise owes a lot to a great 2H/19 for Gold, but Gold price performance does not usually positively impact juniors so much; it usually mainly affects producers. Is this a sign of the confidence of the marker in the management team? Do investors see development and potential production as assured processes in the hands of the Integra Resources team? Two pivotal events affected the share price of Integra in 2019: the release of a PEA, and a revised resource estimate, demonstrating a very low AISC of US$619/oz net of Silver by-product or USD$742/oz Gold, and a year 1-10 average annual production of 124,000oz Gold equivalent, made up of 103,000oz of gold and 1,660,000oz of silver.

The first point we wanted to cover was Integra Resources' DeLamar asset: why would a gold producing powerhouse like Kinross have given up an asset if it was so good? Integra Resources acquired the DeLamar asset in 2017 for C$7.5M in cash and the issuance of Integra shares equal to 9.9%. Salamis insists that one key component to be aware of when looking to make mine acquisitions is to look for projects that were shut down in a low commodity price environment. DeLamar was shut down by Kinross because of low gold and silver price in the 1990s/early 2000s. Therefore, Salamis is adamant that there is "still juice to be squeezed." Let's see if this holds true.

So, Integra Gold was the stuff of every investor's dreams. How does the team plan to avoid being a one company wonder? Integra Resources will be developing a large resource with a great deal of existing infrastructure in a very favourable gold mining jurisdiction. The fundamentals look strong, and it's hard to question the management team when it comes to technical proficiency or business strategy.

Approximately 90% of the DeLamar Project global Gold-Silver resources has now been upgraded to an M&I category; this is a meaningful shift. How did Integra Resources get this outcome? Was it intentional? Mining is mining and even Salamis acknowledges that you have to get lucky sometimes.

Integra Resources has a large base of institutional shareholders. The retail component is smaller. Does this impact liquidity, and does this impact Integra Resource's business decisions? Salamis explains that for the next two years, it is full speed ahead in the exploration front; exploration capital won't be available forever, especially once Integra Resources conducts a feasibility study and edges towards the realm of production.

In terms of remuneration, this time around, Salamis and his management team have deployed their own capital to the point of 10% of the company. The principles remain largely the same as at Integra Gold, but with the added benefit of a larger piece of the pie for management, come market growth.

Looking towards the rest of 2020, Salamis will look to continue with this pivot towards high-grade gold exploration and will continue the discussion with the market regarding the metallurgy at Eldorado. Maybe the market is still slightly sceptical at to why Kinross would sell an asset this promising on paper? Comment below and we will respond to your questions.  

Company page: https://www.integraresources.com/

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