Integra Resources Corp. (ITR) Earnings Call Transcript & Summary

Thank you. Good morning, my name is Rob and I will be your conference operator today. At this time I would like to welcome everyone to the Integra Resources second quarter 2026 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks there will be a question and answer session. If you would like to during this time simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question again press star one. Thank you. I would now like to turn the meeting over to Josh Servas, Vice President Investor Relations. Please go ahead Josh.

Thank you, Rob. I would like to welcome everyone to Integra's 2026 Second Quarter 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'll check into the second slide of the earnings presentation, which contains important cautionary notes regarding these forward-looking statements. The cautionary notes can be found on Integra's corporate website. Please note all dollar amounts discussed today will refer to U.S. dollars unless otherwise indicated. On the call today, I'm joined by Integra's President, CEO and Director George Salamis, Chief Operating Officer Cliff LaFleur, Chief Financial Officer Andre St. 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 second quarter of 2026, followed by a live Q&A session. With that, I'd like to hand the call over to George to kick things off. Thanks, Josh.

Q2 was pivotal for the company. Florida Canyon remains the cash generator for Integra and the updated technical report and life of mine released in June demonstrates a bright future for Florida Canyon. The updated life of mine plan highlighted a longer mind life, higher annual production, and strong free cash flow generation. The two years of operating experience have enabled us to develop a more realistic, stable, and executable mine plan that reflects the operating realities of the mine. The updated plan increases average annual gold production by 17% while providing a more consistent production profile over an 8-year mine life. Finally, strategic investments in fleet modernization and expanded heat bleach capacity position Florida Canyon for sustainable long-term growth, lower operating costs, and continued value creation. Del Mar continues to advance to the federal permitting process under the National Environmental Policy Act. The public scoping period now complete and the Bureau of Land Management currently reviewing comments received on the project. In parallel, the company continues to advance detailed engineering and planning at Del Mar to prepare for future development. State of good repair initiatives are also underway on site, including test mining, crew crushing optimization, truck shop repairs, general site preparation, and other low-risk activities that will, in fact, shorten the development timeline and reduce execution risk at the LMR in the future. With the exploration plan of operations received at well cat exploration drilling is expected to start soon as we work on advanced economic studies. Now, turning to slide five, I'll walk through our second quarter financial highlights before handing the call off to Cliff to cover Florida Canyon's operating results. Q2 was highlighted by a strong financial position with $111.1 million in cash and working capital of $146.5 million. Operationally, the quarter was marked by record throughput of 87,867 total tons per day at Florida Canyon, resulting in a 30% increase in gold production quarter over quarter. Florida Canyon produced 16,379 ounces of gold in the quarter, generated revenue of $70.8 million and operating cash flow of $22.8 million. The 45% increase in ore placed on the heat bleach pads in Q2 has created a large inventory of recoverable coal ounces that supports increased production over the balance of the year. This has led the company to maintain its annual gold production guidance of 70,000 to 75,000 ounces of gold this year. With that, I will hand the call over to our COO, Cliff, to discuss the second quarter operating results for Florida Canyon.

Thanks, George. Turning to slide six, we've outlined the key operating metrics for Florida Canyon in the second quarter of 2026. The second quarter showed strong operating results at Florida Canyon with a record mining rate of 87,867 total tons per day achieved through the integration of new mining equipment into our existing mining fleet and shorter haul distances. In Q2 2026, the company mined 4.4 million tons of ore and 3.6 million tons of waste at a strip ratio of 0.81 for the quarter. AVERAGE GOLD RECOVERY WAS 57.8% IN THE QUARTER IN LINE WITH EXPECTATIONS. FLORIDA CANYON PRODUCED 16,379 OUNCES OF GOLD IN THE QUARTER AND SOLD 15,794 OUNCES. Due to 2026 mine site ASIC came in at $3,371 per ounce sold at the lower end of our revised guidance range, reflecting increased rates of mining, hauling and stacking, cost pressures related to royalties and excise taxes from stronger than anticipated gold prices, and higher diesel and explosive costs cash costs averaged 2 495 dollars per ounce sold for the quarter During the quarter, we invested $13.5 million in sustaining capital that reflects the company's continued reinvestment strategy at Florida Canyon. Spending year to date includes new equipment leases, capital stripping and mobile equipment refurbishments. The company expects investments in sustaining capital expenditures to continue into the third quarter. THE COMPANY ALSO INVESTED $.8 MILLION IN NON-SUSTAINING CAPITAL THIS QUARTER. THE NON-SUSTAINING CAPITAL SPENT THIS YEAR WAS PRIMARILY DIRECTED TOWARD EQUIPMENT LEASES FOR THE EXPANDED FLEET, ENGINEERING AND PERMITTING WORK ON PHASE 3C LEACH PATH FACILITY AND GROWTH FOCUSED DRILLING PROGRAMS AT THE FLORIDA CANYON MINE. Importantly, in the corridor, we released the results of our updated technical report and life of mine plan for Florida Canyon. WHICH DEMONSTRATED MATERIALLY ENHANCED OPERATION. HIGHLIGHTING A SUBSTANTIAL INCREASE IN MINERAL RESERVES, AN EIGHT-YEAR MINE LIFE, AN INCREASED ANNUAL PRODUCTION PROFILE, LOWER OPERATING COSTS, $600 MILLION AFTER TAX NET PRESENT VALUE AND APPROXIMATELY $770 MILLION IN AFTER TAX FREE CASH FLOW OVER THE LIFE OF THE MINE. call back to george to discuss the updated life of my plan at florida canyon thanks chris.

When Integra acquired Florida Canyon in 2024 for approximately $68 million, We saw producing mine was significant upside, but also with limited remaining mine life and a relatively flat production profile. We have studied and learned a lot about the mine in the last 18 months of ownership. The updated technical report and life of mine plan has been greatly informed by what we have learned about this mine thus far. In short, in less than two years since the acquisition of Florida Canyon, we transformed the operation into a materially different mind. The technical report shows that Florida Canyon will generate more than 11 times the original acquisition cost of $68M in after-tax free cash flow. Despite mining depletion, proven and probable reserves have increased by 74% from approximately 685,000 ounces of gold to nearly 1.2 million ounces of gold. In addition, the mineral resource estimate has increased 128% in the oxide M&I category and 57% in the oxide inferred category. Mine life has been extended by three years and now has a total active mine life of eight years plus two years of residual leaching. The annual gold production has increased by approximately 17% from roughly 70,000 ounces to 82,000 ounces of gold per year. This transformation reflects denser drilling, geological refinement, engineering work, and operational improvements completed since the acquisition. The updated technical report demonstrates a substantially improved operation. Here are the highlights. Approximately 770 million in ASTHO tax free cash flow over the life of mine. This cash flow will be used to self-support Florida Canyon and fund growth elsewhere in the company. After tax NPV of approximately $600 million using base case metal prices. Eight years of active mining with two years of residual leaching. Total payable gold production of 685,000 ounces of gold. life of mine basic of approximately $2,331 per ounce. Importantly, these economics are supported by a mine plan that we believe is both executable and sustainable moving forward. This graph demonstrates Florida Canyon strong after tax free cash flow, which averages $90 million per year. For total life of mine cumulative after tax free cash flow of approximately 770 million dollars. This robust cash flow profile allows for the expansion highlighted in the updated life of mine plan at Florida Canyon to be self funded while supporting the Delamar and Nevada North development project pipeline. Based on current estimates, we anticipate funding a portion of the Delamar project pre-production capital expenditures with cash generated from Florida Canyon. Now I will hand the call back to Cliff to discuss our second quarter highlights at the Delamar project.

Thank you, George. Turning to slide 10. Delamar continues to advance through permitting towards a final environmental impact statement and record of decision in the second half of 2027. ON MAY 29, 2026, THE U.S. BUREAU OF LAND MANAGEMENT PUBLISHED THE NOTICE OF INTENT FOR DELAMAR IN THE FEDERAL REGISTER INITIATING THE NATIONAL ENVIRONMENTAL POLICY ACT REVIEW PROCESS. form will start a federal permitting. The associated public scoping and stakeholder engagement process concluded on June 29, 2026, and the Bureau of Land Management is reviewing comments received. In the second quarter of 2026, we also announced that we engaged OUSENKO to lead detailed engineering and procurement for the project. This work has begun and will continue through the first quarter of 2027 with long lead procurement activities beginning in the second half of this year and continuing through 2027. ON THE GROUND AT DELA MAR, THE COMPANY HAS BEGUN STATE OF GOOD REPAIR WORK, WHICH IS FOCUSED ON UPDATING AND DE-RISKING EXISTING INFRASTRUCTURE AND OPTIMIZATION PROJECTS LIKE TRUCK SHOP REFURBISHMENT, COMMUNICATIONS INFRASTRUCTURE INSTALLATION, AND CRUSH OPTIMIZATION ANALYSIS. We are also pleased to have entered into an agreement with the Shoshone Paiute tribes to collaboratively design and implement processes and initiatives that address their respective interests in the Delamar project. THE COMPANY ALSO ADVANCED THE NEVADA NORTH PROJECT WHICH THE NEVADA NORTH PROJECT WHICH CONSISTS OF THE WILDCAT DEPOSIT CONSISTS OF THE WILDCAT DEPOSIT AND THE MOUNTAIN VIEW DEPOSIT. AND THE MOUNTAIN VIEW DEPOSIT. THE SECOND DEPOSIT WAS A The decision record documentation for the Wildcat Exploration Plan of Operations was complete as of April 9, 2026, and the Reclamation Permit for Nevada Division of Environmental Protection Bureau of Mining Regulation and Reclamation was received on April 20, 2026, with an effective date of May 5, 2020. The Wildcat Exploration Plan of Operations will provide greater flexibility for significantly expanded exploration and hydrogeological drilling campaigns. Exploration drilling is scheduled to initiate in August 2026. I'LL NOW PASS THE CALL TO OUR CFO, ANDRE, TO PROVIDE AN OVERVIEW OF THE SECOND QUARTER FINANCIAL RESULTS.

Thanks, Chris. Santa Clara closed the second quarter of 2026. with its strongest financial position to date, with a cash balance of $111.1 million and working capital of $146.5 million. With the exception of mobile equipment financing, the company has been debt-free since December 2025. The company reported Q2 2026 revenue of 70.8M with a cost of sales of 47.4M, resulting in 23.4M in mine operating earnings. This represents a 33% operating profit margin for the quarter. operating cash flows of 22.8 million or 11 cents per share in Q2 2026, which is a 40% increase compared to $16.3 million or $0.10 per share in Q2 2025. Q2 2026 adjusted earnings were $13.1 million or $0.06 per share. comparable to 11.8 million or 7 cents per share in Q2 2025. Free cash flow was 9.3M or 5 cents per share for the quarter. A meaningful improvement from 2.1M. Or 1 cent per share in Q2 2025. I will now pass the call back to Cliff to offer revised 2026 guidance for Boydick Canyon.

THANKS, ANDRE. THANKS, ANDRE. TURNING TO SLIDE 12. TURNING TO SLIDE 12. WE ARE MAINTAINING OUR 2026 GOLD WE ARE MAINTAINING OUR 2026 GOLD PRODUCTION GUIDANCE FOR FLORIDA PRODUCTION GUIDANCE FOR FLORIDA CANYON. CANYON. WE ARE MAKING SURE THAT THE at 70,000 to 75,000 ounces. As announced on June 25th, 2026, we revised our 2026 mine site all in sustaining cost guidance to 3,300 to $3,500 per ounce sold. As a result, our total cash cost guidance is increasing between $2,300 to $2,500 per ounce sold. non-sustaining growth capital guidance was revised to 16.5 to 18.5 million dollars an increase of nine million dollars THE REVISIONS TO TOTAL CASH COSTS AND MINE SITE ASIC REFLECT HIGHER TONS MINED, STACKED AND PROCESSED, LOWER GOLD OUNCES SOLD IN THE FIRST HALF OF THE YEAR. INCREASED ROYALTIES AND EXCISE TAXES TIED TO STRONGER GOLD TAXES TIED TO STRONGER GOLD PRICES AND HIGHER DIESEL AND PRICES AND HIGHER DIESEL AND EXPLOSIVE COSTS. THE NON-SUSTAINING CAPITAL INCREASE REFLECTS ADVANCING HEAP LEAGE PACK CONSTRUCTION INTO 2026 FROM 2027 IN LINE WITH OUR UPDATED FLORIDA CANYON LIFE LIMIT PLAN. A REVISED GUIDANCE ASSUMES THE GOLD PRICE AT $4,200 PER OUNCE. VALUES REMAIN PRICE SENSITIVE WITH ROUGHLY $7 PER OUNCE CHANGE IN CASH COSTS AND MINDSIGHT ASIC FOR EVERY $100 PER OUNCE CHANGE IN THE GOLD PRICE. I'll now hand the call back to George to close out with our next steps in Outlook. Thanks, Gus.

Florida Canyon supports development costs, our pipeline portfolio, creating a clear path for Integra to become a multi-asset US-focused material precious metals producer. For the balance of 2026 at Florida Canyon, we are accelerating construction of our heat bleach expansion to accommodate the updated mine plan. A Delamar state of good repair work is underway to advance readiness while the NEPA permitting process continues. Across the portfolio, we expect good results from our 50,000 meter drilling campaign at all three projects. we will work on advanced economic studies at Nevada North. Looking ahead to 2027, we expect permitting to continue with the Nevada North project along with an updated technical report and the record of decision and final environmental impact statement for Del Mar in the second half of the year. I would like to end the formal part of this presentation with slide 14 as it captures our strategy. Integra today is a fundamentally different company than it was just a few months ago. The updated Florida Canyon Life of Mine Plan has established a larger, longer life and more profitable gold mining operation, providing a stable cash generating foundation to fund the advancement of one of the highest quality gold development pipelines in the United States. Florida Canyon's cash flow will support Delamar as it progresses through federal permitting, advanced economic studies at Nevada North, and the largest exploration program in the company's history to support future resource and reserve growth. We also maintain one of the largest gold and silver inventories in the Great Basin, not controlled by a major gold mining company. We remain focused on discipline execution, responsible growth, and creating long-term value as we continue building a leading US-focused intermediate coal producer. With that, I'd like to thank everyone for joining us today, and I'll now turn the call back to the operator for questions.

Thank you. We will now begin the question and answer session. If you'd like to ask a question, please press star one in your telephone keypad. If you'd like to withdraw your question, simply press star one again. first question comes from a line of Heiko Il from H.C. Wainwright. Your line is open.

Hey there guys, thanks so much for taking my questions. Good morning. Cliff went through the cash cost guidance, the revised cash cost guidance for Florida Canyon. I know it's early and you probably don't necessarily want to give any real numbers, but can the team walk us through your expectations for the site in 2027 and beyond and what factors might sway cash and all in sustaining costs in the future to reach either side of a conceptually widened range given what just transpired.

Thanks, Heiko. Great question. And I think with respect to answering that question, I think the feasibility study that directly answers those questions, but I'm going to pass it over to Cliff. He's got a more detailed sense of the evolution of our cost guidance for that study. Cliff, over to you.

Thanks, George. Good question. I guess what I'm worried about is making statements without having a technical report right in I DO KNOW THAT WE'RE, I THINK THIS QUESTION CAME UP IN THE LAST CALL. WE'RE MAKING INVESTMENTS STARTING IN 2027 IN REPLACING THE 777 FLEET. which will complete the upgrade of our fleet. So expect that in sustaining costs. THE CASH COST GUIDANCE WENT UP THIS YEAR BECAUSE OF THE THIS YEAR BECAUSE OF THE INCREASE IN TONNAGE STACKED AND INCREASE IN TONNAGE STACKED AND TREATED ON HEAT BLEACH PADS. THAT SHOULD ACCESS THE NEW MINING AREA IN THE CENTRAL PIT MINING AREA IN THE CENTRAL PIT AND THE GRADES INCREASE. I'm not sure what more color I can add, but I know like over the next three, THREE TO FOUR YEARS AS THE THREE TO FOUR YEARS AS THE SUSTAINING CAPITAL INVESTMENTS IN SUSTAINING CAPITAL INVESTMENTS IN THE EQUIPMENT AND OTHER THE EQUIPMENT AND OTHER INFRASTRUCTURES LIKE INFRASTRUCTURES the plant, making sure that some of the historic equipment there is upgraded to to improve its longevity and reliability. THAT WE HAVE A COST TO GET BACK DOWN TO THE 2300 TO 2400 LEVEL.

Okay, 1 thing, just to clarification 1 thing that that's caught my ear in the report on the, on the health, safety and environment that you had a reportable spill. It sounds like that's not a big deal because it wasn't an immediately reportable spill, which appears to be over 25 gallons of fuel, depending on where you are. Just out of curiosity, if something like this happens, do they come to you for bigger bonds, reclamation bonds or anything along those lines? Or is that just something that happened and that's the end of it because nothing actually serious happened? Yes.

Thanks, Michael. I'm going to direct that question to Greg Robbins in our mine GM at Florida Canyon because he deals with those things directly. Greg, I think you're on the line.