Integra grows reserve 74% at Florida Canyon gold mine

An updated feasibility study for Integra Resources’ (TSXV: ITR; NYSE-A: ITRG) producing Florida Canyon mine in Nevada raises the gold output, reserves and mine life and more than quadruples its value.

The update, released Thursday, raises annual production about 17% to 82,000 oz. gold over an eight-year life compared to a technical report from 2024 under previous owner Argonaut Gold. At 62%, recovery rates changed little, while proven and probable reserves rose 74% to 1.1 million ounces grading 0.31 gram gold per tonne. However, all-in sustaining costs increased 43% to $2,331 per ounce.

The new feasibility’s base case net present value (discounted at 5%) of $601 million is almost five times higher than the NPV estimated in 2024, though the update has a revised mine plan, expanded reserves and a gold price assumption of $4,200 per oz. compared to the previous $1,900-per-oz. case. The mine is about 200 km east of Reno.

‘Positive cash flow’

“Key metrics which met or beat expectations include; mine life, annual production, grade, unit costs, daily ore placed, which is offset by weaker than expected recovery rates and higher sustaining capital leading to higher cash and AISC,” Canaccord Genuity analyst Phil Ker said in a note. 

“We see the required investment into Florida Canyon resulting in sustainable and positive cash flow which we expect to support funding of future development of Integra’s DeLamar project in Idaho.”

‘Fundamentally stronger asset’

The company’s investments, drilling, operational improvements and careful mine planning helped transform Florida Canyon into a “fundamentally stronger asset with higher gold production, lower future costs, a longer mine life and a substantially larger mineral reserve base,” Integra CEO George Salamis said in a release.

“Importantly, this growth has been achieved within a producing, self-funding mine and reinforces the company’s belief that Florida Canyon remains significantly underexplored with substantial upside,” he added.

The update suggests Integra’s 2024 acquisition of Florida Canyon is starting to pay off as its economics improve, changing the asset into a longer-lived producer.

Integra shares gained 1% to C$3.39 apiece on Friday morning in Toronto, for a market capitalization of C$689.4 million. The stock has traded in a 12-month range of C$1.93 to C$6.60.

Florida Canyon’s extended mine life totals eight years of active mining and about two years of residual heap leaching. That compares to seven years of active mining and about three years of residual leaching in the 2024 report.

$800M cash flow

The improved reserves and economics also support the update’s post-tax free cash flow of $800 million and average annual after-tax free cash flow of $90 million.

Cash flow from the mine is to support advancing Florida Canyon’s gold-silver projects DeLamar in southwest Idaho and Nevada North. DeLamar’s environmental permits are expected next year.

The company is also drilling 42,500 metres at Florida Canyon to identify potential resource growth adjacent to the producing mine. Integra acquired the mine and Florida Canyon Gold in a C$95 million transaction in 2024, which was previously owned by Argonaut Gold.