Integra Resources (ITR) - NEW Strategy to Deliver 130,000oz pa Gold

• Integra Resources is developing a project in Southwestern Idaho with a resource endowment of close to 5 million ounces. The company is currently in the permitting stage.
• The company's share price has faced challenges over the past 18 months, reflecting broader trends in metal companies.
• Idaho's mining jurisdiction presents some challenges for permitting compared to places like Nevada, but the state has a history of successful mining projects.
• Integra Resources recently raised funds through a 10 million dollar convertible note with favorable terms, indicating a strong position for the company.
• The company made a strategic pivot from initially building both an open pit heap and a milling facility to focusing solely on the low-cost heap bleach method, aiming for a production level of 135,000 ounces a year.

Investing in a Promising US Gold Project with Long Mine Life and Low Costs

Integra Resources could offer investors excellent exposure to a large, low-cost gold project in Idaho with the potential to produce over 130,000 ounces per year.

Integra Resources' flagship asset is the DeLamar Project, located in southwestern Idaho. This project contains a sizeable gold-silver resource endowment of close to 5 million ounces. The project is well-advanced, with a completed Preliminary Feasibility Study (PFS) and permitting underway.

The DeLamar deposit has been endowed with over a century of mining history, with previous operators extracting 1.6 million ounces of gold and 100 million ounces of silver from both open pit and underground operations. Integra's large property package provides extensive exploration upside as well.

Compelling Economics

The PFS outlined robust project economics, with average annual gold production projected at 131,000 ounces over a 16-year mine life. All-in sustaining costs (AISC) were estimated at just US$738/oz, with an after-tax NPV5% of US$261 million and IRR of 25% at US$1,350/oz gold.

These economics could improve further through additional low-grade stockpiles, as the previous operator stockpiled over 60 million tons of material between 0.2 g/t Au and their 0.86 g/t Au mill cut-off grade. Integra Resources estimates this stockpile contains roughly 1 million ounces at 0.45 g/t Au, which represents potential low-cost production to enhance the PFS mine schedule.

De-Risking the Path Forward

In response to inflationary pressures industry-wide, Integra Resources made the prudent decision in April 2022 to defer the US$240 million mill component of the PFS mine plan. The company pivoted to a staged development approach focused first on building a low-cost heap leach operation only.

This staged strategy significantly reduces upfront capital requirements to just US$128 million. The streamlined development plan also accelerates payback to within 2 years and allows for strong free cash flow generation to fund potential future expansion.

Permitting De-Risking on the Horizon

Looking ahead, Integra's focus is on continuing to de-risk DeLamar by advancing the permitting process in 2023. Successful permitting would represent a major project milestone and catalyst for the share price.

Idaho has a long mining history and should not pose a jurisdictional risk, as the state continues to permit both gold and phosphate projects. For investors, Idaho provides a more stable and mining-friendly alternative to Nevada while still offering good infrastructure.

Proven Team to Take DeLamar Forward

Integra Resources boasts a seasoned executive team with experience successfully permitting, building, operating and selling multi-million-ounce gold deposits.

CEO George Salamis led Integra Gold through permitting, construction and eventual sale to Eldorado Gold in 2017 for C$590 million. The current team has also collectively overseen US$2 billion in M&A transactions, positioning Integra Resources well to potentially monetize DeLamar once permits are in hand.

Major Shareholder Backing

In August 2022, Integra Resources attracted a C$10 million investment from billionaire investor Eric Sprott. This funding provides Integra with a 20-month runway, allowing the company to methodically advance DeLamar without being forced to raise capital in a volatile market.

Sprott's backing represents a strong vote of confidence in both DeLamar's potential and the capabilities of Integra's management team. This financing flexibility and proven backing from key shareholders help derisk the story substantially.

Attractive Entry Point for Investors

In summary, Integra Resources offers investors an attractive opportunity to gain exposure to a sizable, advanced-stage gold project located in a stable American mining jurisdiction. Led by a proven team, DeLamar boasts multi-million-ounce potential, low costs, and a streamlined development timeline.

Trading 67% below its 52-week high, Integra Resources shares currently provide investors with an attractive risk/reward entry point relative to the company's flagship asset. As Integra Resources moves into permitting and attracts further funding, DeLamar's economic potential should start to get reflected in Integra's share price. Patient investors could see a significant upside as DeLamar advances towards production over the next 2-3 years.

The Investment Thesis for Integra Resources

Upside Optionality

While Integra is starting small with just a heap leach operation, there is substantial upside optionality from potential future expansion. The existing PFS outlined a 16-year mine life processing higher-grade sulfide material through a mill. This expansion potential provides investors with significant additional leverage to higher gold prices.

Takeout Potential

Integra's experienced leadership has demonstrated its ability to successfully permit and sell assets, with the C$590M sale of Integra Gold in 2017. As DeLamar becomes de-risked through permitting and development, the project could attract takeover interest from a major mining company looking to add a sizeable gold asset in a stable jurisdiction. Being taken out at a premium would deliver big returns for early Integra Resources investors.

Exploration Upside

Beyond the known deposit, DeLamar has extensive exploration potential along the 30km long trend. Integra Resources sees strong potential for new discoveries that could substantially expand resources. Any exploration success would bringnce material upside to the value of the DeLamar gold system.

Undervalued and Overlooked

Despite its solid economics and big production profile, Integra Resources remains undervalued relative to peers, perhaps due to its location in Idaho being off the beaten path. Its US$98M market cap does not reflect DeLamar's potential. This situation presents the opportunity for investors to buy in at a discounted valuation before the market catches on.

Proven Operators

Integra's executive team has an exceptional track record of success in permitting, building, operating, and selling multi-million-ounce gold mines. Their capabilities significantly derisk execution and make success at DeLamar far more likely. Investors can feel confident entrusting capital to this experienced group.

Integra Resouces's DeLamar project offers upside through multiple avenues - exploration, expansion potential, M&A, as well as strong fundamentals. With an undervalued share price and proven operators, investment in Integra Resources provides exposure to significant catalysts on the horizon.