Integra Resources Corp (ITRG) 2025 Q2 法說會逐字稿

Good morning. My name is Jeannie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Integra Resources second quarter 2025 results conference call. (Operator Instructions)

Thank you. I would now like to turn the meeting over to Jason Banducci, Vice President, Corporate Development and Investor Relations. Please go ahead, Mr. Banducci.

Thank you operator. I would also like to welcome everyone to Integra 2nd quarter of 2025 operating and financial results conference call.

Before we begin, I would like to note that we will be making forward-looking statements during today's call. I will direct you to the second slide of the earnings presentation, which contains important cautionary notes regarding these forward-looking statements. The cautionary notes can also be found on Integra's corporate website. All dollar amounts discussed today will refer to US dollars unless otherwise noted.

On the call today I'm joined by Integra's President, CEO, and director George Salinas, Chief Operating Officer Cliff LeFleur, Chief Financial Officer Andre Saint Germain, Vice President Finance Sean Deisner, Vice President permitting Dale Kerner, and general manager of the Florida Canyon mine, Greg Robinson.

Today we are pleased to provide an operating and financial update for the 2nd quarter of 2025 followed by a Q&A session. With that, I would like to hand the call over to George to kick things off.

Thanks, Jason and good morning to everybody from Boise, Idaho. When we acquired the Florida Canyon mine in 2024, our primary goal was to secure a consistent and reliable source of cash flow that would allow the company to advance its flagship development-stage projects, DeLamar and Nevada North, and remove the need for an annual equity financing. Florida Canyon has successfully delivered on this objective.

In the current gold price environment, Florida Canyon is generating greater-than-expected cash flow, which has significantly improved the company's financial position and ability to execute on its strategy.

As anticipated, Florida Canyon will see significant reinvestment during the remaining quarters of 2025 and into 2026 across several ongoing initiatives designed to support a profitable mining operation for many years to come. The next 18 months represent a capital-intensive phase of the long-term continuous improvement plan for Florida Canyon.

Major investments are underway in key areas including a heap leach pad expansion, increased capitalized waste stripping, the revitalized mobile equipment fleet, process optimization, and enhanced mine plan. The goal is to sustain and grow Florida Canyon, extend its mine life, and address historical underinvestment.

Integra is laying the foundation for a more efficient, longer-life operation with an improved cost profile in the years ahead. The company's ongoing work at Florida Canyon will be incorporated into a new NI 43-101 technical report expected to be published in the first half of 2026, in which Integra aims to highlight the improvements which can be made at this cornerstone asset.

Florida Canyon’s ability to generate cash flow has allowed the company to expedite and bolster initiatives at the DeLamar Project relating to the ongoing feasibility study and permitting efforts, with the expected commencement of federal mine permitting in the second half of 2025.

The company's enhanced financial strength has also allowed for an increased budget for the Nevada North Project to complete crucial test work on site in the field to support future economic studies and permitting efforts. Integra is well positioned to deliver on its goals of profitability and project advancement while progressing its long-term vision of building a US-focused intermediate gold producer.

Turning to slide 5, we have highlighted several metrics that underscore our key successes in the second quarter of 2025. The major takeaway from Q2 is that Florida Canyon is doing its job and performing as expected. While there is still much work ahead of us, the mine is currently operating consistently and profitably, adding to Integra’s cash balance to support the development and advancement of DeLamar and Nevada North.

In the second quarter, Florida Canyon demonstrated consistent performance with total production of 18,087 ounces of gold at cash costs of $1,849 per ounce and site-level all-in sustaining costs of $2,641 per ounce. The average realized gold price during the quarter was $3,332 per ounce, allowing Integra to demonstrate its significant cash flow leverage to the spot gold price.

Q2 revenue was a record $61.1 million, and operating cash flow generated from Florida Canyon was $16.3 million. Integra deployed $14.2 million of sustaining capital at Florida Canyon to support important initiatives such as heap leach pad expansions, fleet refurbishments, and capitalized stripping.

We also spent $800,000 of growth capital during the quarter focused on resource expansion drilling at Florida Canyon, which has demonstrated excellent initial results. Integra ended the quarter with a robust cash balance of $63 million.

I note that this marks the strongest-ever financial position for the company, well positioning Integra to execute on all major objectives for the remainder of 2025 without having to return to the market for financing.

We remain focused on advancing our flagship development-stage project, DeLamar. During the quarter, we made significant investments refining the mine plan of operations with the BLM and expect to initiate federal permitting in the second half of this year.

We also made significant progress on the ongoing feasibility study, which we expect to announce in the second half of this year as well. I will now hand the call over to our COO, Cliff, to discuss operating results from Florida Canyon in Q2. Over to you, Cliff.

Thanks George.Turning to slide 6, where we have outlined the key operating metrics for Florida Canyon in the second quarter of 2025. Approximately 3.1 million tons of ore were mined, which represents a 2% increase compared to the first quarter of 2025. Additionally, 2.9 million tons of waste were mined during the quarter, resulting in a strip ratio of 0.96. This is up from a strip ratio of 0.6 in Q1 2025. The higher strip ratio reflects increased capitalized waste stripping aligned with the company's reinvestment strategy at Florida Canyon.

In H1 2025, the company mined a total of 6.1 million tons of ore and 4.0 million tons of waste, resulting in a strip ratio of 0.78. Mining rates are expected to remain elevated in H2 2025 due to continued waste stripping, accessing new areas, while also generating additional run-of-mine ore. This is consistent with the company's full-year guidance.

Florida Canyon produced 18,087 ounces of gold in the second quarter of 2025, slightly lower than the 19,323 ounces of gold produced in quarter one. This is due to a one-time efficiency improvement project that added approximately 2,000 ounces to quarter one.

Consistent production of recovered gold ounces this quarter from the Phase 3A heap leach pad was supported by the recovery of residual gold balances from Phase 1 and 2 heap leach pads. Also in quarter two, the construction of the Phase 3B heap leach pad was ramped up, with commissioning expected in late 2025.

Florida Canyon produced 37,410 ounces of gold for H1 2025, which is in line with the annual guidance of 70,000 to 75,000 ounces. H2 2025 production is expected to benefit from more ounces placed as run-of-mine tons and from improved grades from the North Pit. Additionally, we expect continued recovery of residual balances from Phase 1 and Phase 2 heap leach pads.

Average global process recoveries in the quarter of 60.5% were up slightly than the 60.4% achieved in Q1 2025. Average process recoveries in H1 2025 of 60.4% are in line with our expectations.

Cash costs averaged $1,849 per gold ounce in Q2 2025 and $1,936 per gold ounce for the first half of the year. Mine site AISC averaged $2,641 per ounce in Q2 2025 and $2,486 per ounce for H1 2025. This is in line with the company's 2025 guidance of $2,450 to $2,550 per ounce.

In Q2 2025, the company invested $14.2 million in sustaining capital, bringing total H1 2025 spending to $20.2 million. This reflects the company's continued commitment to reinvesting in Florida Canyon through new leach pad construction, increased capital stripping, and mobile equipment refurbishments.

The company also invested $800,000 in non-sustaining growth capital during Q2 2025 and year-to-date. The spending was focused on testing lateral extensions and infill drilling, as well as waste dump drilling. These expenditures are in line with the company's 2025 guidance.

We’re continuing to reinvest into the mine and allocating the capital required to support a profitable mining operation at Florida Canyon for many years to come.

Moving to slide 7.

Speaking to the guidance, in June, Integra released 2025 guidance for Florida Canyon, where gold production is expected to be 70,000 to 75,000 ounces. The company is planning to mine approximately 13.5 million tons of ore and 11.2 million tons of waste. This will total 24.7 million tons at a strip ratio of 0.83.

The increased strip ratio in 2025 is a result of catching up on stripping postponed by previous owners, as well as additional stripping required to access new mining areas.

Cash costs at Florida Canyon are expected to range from $1,800 to $1,900 per ounce of gold sold, including royalties. Integra has ongoing optimization studies at Florida Canyon focused on identifying areas of increased efficiency and cost reduction.

Sustaining capital expenditures are expected to range from $48 million to $53 million, focusing on capitalized waste stripping, mobile fleet rebuild and replacement financing, heap leach pad expansion, and other sustaining items.

Elevated mine site all-in sustaining costs are expected in Q3 2025, with 45% of annual sustaining capital expenditure planned in this quarter. There is an increase in the heap leach pad expansion work and fleet refurbishment planned in Q3.

2025 mine site all-in sustaining costs at Florida Canyon are expected to range from $2,450 to $2,550 per ounce of gold sold. This reflects the capital-intensive period at Florida Canyon expected in 2025 and continuing into 2026.

Growth capital between $8 million and $10 million at Florida Canyon will be deployed on expansion projects and various studies, including drill testing oxide targets, mobile equipment financing to augment the fleet, engineering studies on potential steepening of pit wall slopes, and the possibility of increasing run-of-mine gold mineralized material to the heap leach pad.

At Florida Canyon, approximately $1.5 million has been allocated to support the 2025 oxide growth drilling program focused on near-mine targets ahead of a resource, reserve, and life-of-mine plan update in 2026.

I’ll now pass the call back to George to further discuss the growth drilling program underway at Florida Canyon.

Thanks Cliff and on to slide 8.

Among the many things we were really excited about this last quarter was our first expiration results from Florida Canyon, and so we're really pleased to have launched a growth focused to program at Florida Canyon in Q2 of 2025.

So the 2025 growth drilling program is really focused on three key areas of gold potential.

The first one being near surface oxide potential from historical low grade gold mineralized waste material that was previously uneconomic at lower gold prices.

The second area is Or relates to expanding in situ resources between existing mine pits or the inter-pit areas as we often refer to them as.

And the third area is testing lateral extensions and init infill drilling.

Due to the success of initial drilling, the scope of the program has been increased from 10,000 m to 16,000 m of reverse circulation and sonic drilling.

Approximately 7,800 m of drilling has been completed to date.

This drill program is one of the ways we are allocating capital to enhance the value of Florida Canyon.

On the slide 9.

Within the primitive Florida Canyon mine boundary, there are several large volumes of historically mined low grade gold mineralized dump material, averaging below the historical mine cut-off grades.

This gold mineralized material, which was historically uneconomic at lower gold prices, is a product of decades of past mining and has been identified as a high potential low strip near surface oxide gold target for growth.

Potential has already been demonstrated by the historical in pit mine dumps, which are being partially utilized by current operations.

The historical dump material presents an immediate opportunity to expand reserves and resources with minimal mining costs.

The North dump itself was identified as a high priority target for the 2025 growth drilling program at Florida Canyon and was therefore drilled at the outset of the program in May of this year.

Initial drill results from the North dump have been successful in demonstrating the potential for near-term oxide growth at Florida Canyon.

Some of the top intercepts from drilling of this north dump include 0.28 g per ton oxide gold over 68.6 m 0.36 g per ton oxide gold over 71.6 m 0.37 g per ton gold over 47.2 m.

Approximately 70% of the drillers intercepts exceed the current mine operating cut-off rate from this area.

A few key observations and achievements of initial drilling from this north dump include the following.

So this drilling confirmed gold rate continuity and distribution.

The material has been collected for metallurgical testing, including bar rules, column leech tests, and permeability assessments.

Initial results support potential conversion of this material into mineral resources and reserves through inclusion in the updated resource and reserve block model and mine plan.

The dumped material offers potential to increase future operational flexibility by providing readily available gold miterized materials suitable for heat bleaching that will not require blasting.

The material is expected to improve near term to medium term or feed without significant capital investment while potentially reducing reliance on higher strip in situ material.

Due to the success of the initial drilling of the North dump, the company has planned for additional drilling within the North dump and South dump, focused on resource and reserve conversion and gathering additional material for the ongoing metallurgical testing of the area to determine potential for future heat bleaching.

The 2025 growth drilling program has been increased by 6,000 m from 10,000 to 16,000 m to include additional drilling at the north dump and south dump areas.

Preliminary volume and grade estimation work is underway for the North dump and South dump, with further detail expected in the coming months.

Turning to slide 10.

A secondary focus of the drill program is on gold resource expansion opportunities within saddle and ridge zones located between existing open pits.

Several of what we call the inter pit areas remain sparsely drilled and offer significant upside goal potential, with historical drilling demonstrating encouraging intercepts of mineralization at or near surface.

Interpit areas targeted as part of the drill program include the Central radio tower pit saddle, Florida Canyon saddle, North Pit saddle, and within the radio tower pit itself.

Some of the top intercepts from these areas include 0.47 g per ton over 39.6 m in the north pit.

027 g per ton gold over 114.3 m in the central radi tower saddle.

0.25 g per ton oxide gold over 73.2 m also in the central radio tower saddle area.

I note that approximately 40% of the drill intercepts within the radio tower pit exceed the current area operating mine cut-off grade. I also note that approximately 35% of the remaining drill intercepts within the inter pit areas exceed the current area operating mine cutoff.

Some of the key observations and achievements of the initial drilling program in these interpit areas include the following.

It's pretty clear to us that drilling confirmed gold grade continuity and distribution within these targeted areas.

Material was collected for metallurgical testing, including bottle rolls, column leech tests, and permeability assessments.

Initial results support potential pit expansion specifically between the central and radio tower pits, two of the largest areas of known gold mineralization in Florida Canyon.

Excellent results within the north pit saddle itself, which is the location of a potential satellite pit adjacent to an existing pit.

And so further drilling is required in this area to follow up on a gold vein system that was historically under explored in that area.

Success within the identified inter pit areas has the potential to meaningfully increase mineral resources and reserves by extending existing pit limits within the current Florida Canyon mine plan of operations.

The 2025 drill program at Florida Canyon and supporting analysis is expected to support a mineral resource and reserve update and a revised life of Mine plan in H1 of 2026.

I will now hand the call over or back to Cliff to provide an update on 2nd quarter activities at the company's development stage assets over to you, Cliff.

Thank you, George.

In Q2 2025, the company continued to advance and de-risk its flagship development asset, the Delamar Project, located in Idaho.

The mine plan of operations, which has benefited from several stakeholder informed refinements, is currently under review by the US Bureau of Land Management and cooperating Federal state agencies. A favorable determination of completeness by the BLM will be followed by environmental review of Delamar in accordance with the National Environmental Policy Act. The company expects the environmental review for Delamar to commence in H2 2025.

Concurrently, Integra will work with federal, state, and local regulatory authorities to obtain all necessary permits for my construction, operations, and reclamation.

During the quarter, the feasibility study for Delamar was further advanced with mind planning refinements, which include pit optimization and sequencing to develop the final mind plan for the study, after which operating capital cost estimates can be finalized.

The feasibility study results are expected to be released in H2 2025.

During the quarter, the company also advanced the Nevada North Project, which consists of the Wildcat deposit and the mountain View deposit. At Wildcat, metallurgical and humidity cell testing is being completed.

The environmental analysis for the exploration plan of operations for wildcat is complete, indicating a finding of no significant impact.

The cohesion of decision documentation is pending a memorandum of agreement with the State Historical Preservation Office and tribal governments.

The reclamation permit from the Nevada Division of Environmental Protection Bureau of Mining Regulation and Reclamation is also in process and anticipated in H-22025.

Hydrogeological drilling at Wildcat is expected to be completed in age 2 2025, initiated under an existing approved notice of intent, and completed under additional pending exploration sign of operations approvals.

Moving over to the mountain view deposit.

Environmental analysis for the exploration plan of operations has been completed. A final environmental assessment is expected to be published shortly. The Nevada Division of Environmental Protection Bureau of Mining Regulation and Reclamation permit is also expected to be completed imminently.

External affairs efforts for the quarter at the company's development projects focused on regional outreach in Nevada and Idaho, along with federal engagement in Washington DC.

I'll now pass the call to our CFO Andre to provide an overview of Q2 financial results.

Thanks Cliff. It's a close Q2 in the strongest central position to date with a cash balance of $63 million which is expected to fund sustaining capital needs at Florida Canyon, development expenditures at Delamar and Nevada North, and cover GNA expenditures for the years to come.

The increase in cash versus Q1 2025 is the result of strong mine operating earnings.

Partially upset by $15 million in sustaining and growth capital expenditures at Florida Canyon.

And roughly $4 million in expenditures at our development projects.

The company recorded Q2 revenues of $61 million and cost of sales of $35.9 million, resulting in a $25.2 million in gross profits.

Which equates to a record 41% operating profit margin.

The increase in profit margin compared to Q1 2025 is primarily due to the gold price increase.

We realized this quarter an average gold price of 3,332 per ounce, versus 2,888 per ounce in Q1.

Q adjusted earnings were $11.8 million and adjusted earnings per share were $0.07.

Which meaningfully exceeded Q1 2025, adjusted earnings of $4.4 million or $0.03 per share.

The stronger adjusted earnings this quarter are mostly a result of the increase in average realized gold price.

I will now pass the call to George to discuss strategic objectives for the remainder of 2025.

Good work, Andre. Thanks. So looking forward, our priorities for the remainder of 2025 remain clear, and we're making excellent progress on all fronts. At Florida Canyon, we aim to optimize production, grow cash flow, and continue to demonstrate growth potential through the 2025 drilling program.

At Delamar, we continue to refine the mine plan of operations and expect to initiate federal permitting in the second half of the year.

We also plan to release our feasibility study for Delamar, which Cliff and his team are busy in the final stages of advancing.

Delamar remains one of the very few large scale precious metal projects in the US at a feasibility stage and actively being advanced through federal mine permitting right now.

At Nevada North, we continue to de-risk the project and lay the foundation for future development.

We are also focused on continuing to bolster our capital markets profile and investor awareness, leading to enhanced trading liquidity and index inclusion.

In Q2, Integra was added to the selective Global Silver Miners's total Return index, marking the company's very first index inclusion.

We expect to be eligible for several more indices, including the GDXJ over the next 6 to 12 months.

From a corporate perspective, we are intensely focused on disciplined capital allocation, and on a longer term horizon, we will continue to evaluate strategic and a creative merger and acquisition opportunities that support our strategic goal of becoming a leading mid-tier gold producer.

So I'd like to end the formal part of the presentation with slide 14 as it captures our strategy.

Production Pipeline Jurisdiction, scale, and value.

We now generate cash flow to both sustain the portfolio and fund growth.

We hold one of the largest inventories of gold and silver in the Great Basin, not controlled by a major mining company.

Our pipeline and development projects are being efficiently de-risked.

We operate in Idaho and Nevada, two of the best mining jurisdictions in the world.

We've built a team with a proven track record of execution.

Integra is a US coal producer with a growth runway and a clear strategy to becoming a mid-tier.

At this point, I would like to turn the call back to the operator to begin the Q&A session.

Thank you.

At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.

And your first question comes from the line of Haikoea with HC Wainwright.

Your line is open.

Good morning, Haiko.

Again, if you would like to ask a question, press start then the number one on your telephone keypad.

Mr. Elo, your line is open.

There are no further questions at this time, Mr. Salami. I'll turn the call back over to you.

Thank you, operator, and I truly would like to thank everyone for attending the call. It's a very exciting time for Integra and we appreciate the support.

We look forward to providing another formal update as part of the Q3 2025 earnings call, which will be held in mid-N November.

On that note, please do not hesitate to reach out to myself, Jason Banducci, or any of the integrity team members should you have any follow up questions.

Thank you and enjoy your day.