History Repeating

A few years ago, this management team sold their last company for C$590 million.

Now they look poised to repeat that performance with Integra Resources (ITRG.NYSE-A; ITR.V).

Or better:
Because this time they not only have a multi-million-ounce gold deposit, but they’re also in the midst of a record-setting gold bull market.

Dear Fellow Investor,

Management is critical in most businesses, but especially in junior exploration and development.

If you want to maximize your gains in gold during this bull market, look for companies led by management teams with track records of delivering returns for shareholders…in bad times, as well as good.

A great example is the team that leads Integra Resources (ITRG.NYSE-A; ITR.V).

This is a group that — in the depths of a bear market for gold — took the helm of a company called Integra Gold in 2012, which then had around a C$20 million market cap.

Over the next five years, it would conduct 300,000+ meters of drilling on the past-producing Lamaque project in Quebec, acquire the adjacent Sigma mill, and begin development on an underground mine.

So successful was this revitalization project that mid-tier producer Eldorado Gold bought Integra Gold outright for C$590 million — which represented a nearly 30-fold gain from when the current Integra Resources team took over Integra Gold.

With that impressive accomplishment under their belts, this group looked for their next revitalization project…and they found it in the past-producing DeLamar gold-silver project in Idaho.

Integra Resources was formed with DeLamar as its flagship asset, and in the three years it has owned the project, the value the company has added to it gives every indication that history will repeat here in Idaho.

Writing DeLamar’s Next Chapter

The Carson Mining District in which DeLamar lies has seen two major eras of mining activity, over the course of which it is estimated to have produced an impressive ~1.6 million ounces of gold and ~100 million ounces of silver.

But as you’re about to see, there are world-class resources remaining.

The first era of mining in the district ran from 1863 to 1942, when the gold and silver in the region were primarily mined using placer methods and the underground mining of high-grade veins.

The second ran from the late 1960s through the late 1990s. That period was marked by modern mining exploration and exploitation conducted by a series of companies seeking to outline lower-grade, bulk-tonnage resources at DeLamar.

During this second phase of its life, a succession of owners produced 750,000 ounces of gold and 47.6 million ounces of silver between 1977 and 1998, at which point low precious metals prices forced then-owner Kinross to shutter operations.

When Integra acquired DeLamar in 2017, it had seen only sporadic work in the intervening years…but management saw clear opportunity.

Over the next three years, it took a project without an NI 43-101 compliant resource to one with 3.9 million ounces of gold-equivalent (measured and indicated) resources and an additional 0.5 million ounces of inferred resources.

Eye-Popping Economics

That resource combines the mineralization outlined on and around the old DeLamar area and on and around the nearby Florida Mountain area, which Integra included in its initial acquisition of the DeLamar project.

Last September, the company generated a preliminary economic assessment on these resources, and the resulting numbers, based on what then seemed conservative metals prices of $1,350/gold and $16.90/silver, were exceptional.

Applying those prices, the PEA projected an after-tax NPV, discounted at 5%, of $357.6 million and a rich after-tax internal rate of return of 43%.

Now consider this: When you apply metals prices closer to current trading levels ($2,000 gold and $25.04 silver), those numbers more than double to $817 million and 87%!

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A Truly Unique Asset

Just how attractive an asset is DeLamar from a mid-tier or senior gold producer’s perspective?

Take a look at the graphic below:

The graphic begins with a count of pre-production gold-silver assets, of which there are almost 3,500 globally.

It then winnows that list down using a series of screens very similar to those used by producers in assessing a project’s potential.

As you can see, by the time you apply screens like having a valid economic study in the past five years, a mine life of at least 10 years, a location in a safe, mining-friendly jurisdiction and a project capex of less than $500 million…you’re left with just five assets in the world.

And Integra’s DeLamar is one of these five.

Simply put, the work Integra’s management team has put into DeLamar over the past three years has put this asset on the short-list of any producer looking to shore up its reserve and production profile.

Vast Exploration Upside

And, as if having an imminently developable, four-million-ounce-plus resource weren’t enough, DeLamar has every chance of growing bigger with more drilling.

Indeed, a 16,000-meter drill program is currently underway with the following goals:

• Florida Mountain: Test for high-grade shoots below the pit area that could well improve on the project’s already solid economics and for lower-grade, bulk-tonnage material on the large geochemical anomalies surrounding the resource

• War Eagle: Follow up on high-grade intervals on this past-producing target with 5,000 meters of drilling to test for feeder veins for that high-grade and step-outs on nearby geochemical anomalies

• Blacksheep: An area northwest of the DeLamar deposit, which includes several geochemical and geophysical anomalies, will see 3,000 meters of drilling

So Many Ways To Win…

Add it all up, and Integra Resources shows every sign of being one of the standout investments of this precious metals bull market.

There are simply so many ways to win:

• Development optionality: DeLamar’s modest upfront capex of just $161.0 million gives Integra the option of either developing the project itself or finding a willing buyer — either way, ITR could potentially trade much higher from here

• Resource growth: The numerous drilling targets DeLamar offers give Integra the opportunity to move the market with exploration results as well

• An ideal story as investors flock to the sector: The precious metals are a red-hot investment theme right now. Integra’s straightforward story of development and exploration growth should attract new investors like moths to a flame.

• Tight share structure: A recent share consolidation has given Integra a drum tight share structure, one more typical of an early-stage explorer. This fact gives Integra the potential for an explosive upside as the bull market rolls on.

In other words, the team at Integra Resources is attempting to repeat the success it generated at Integra Gold, which resulted in life-changing gains for early investors.

With the ability to either move forward with development on its own or get taken out at a big premium by a larger company, Integra Resources is an ideal way to take full advantage of gold and silver’s time in the sun.

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To Learn More about Integra Resources