Integra Resources Corp V.ITR

Takeover of Florida Canyon

[andre171]

For me, the takeover of Florida Canyon is both an improvement in the market's perception of ITR and a bet on a high gold price. ITR will be able to qualify as a producing miner, even if only for one of its 3 main assets, and the market should value it more highly than if it remained a pure explorer. On the other hand, with the current gold price, FCGI's 43-101 cash flow of 168M should be increased by approximately US$205M. This would augur well for the future development of DeLamar, with the added assurance of synergies, particularly in terms of personnel. The dilution resulting from the FCGI takeover should save us from further dilution later on, both because of the inflow of cash and the hoped-for stock market revaluation.

[Tim2Agami]

Fair enough in this observation.  But it is only with some -- if not a lot of -- irony that it can be recalled that Argonaut was going to use the "cash flow" from Florida Canyon (acquired from Alio) added to the "cash flow" from its producing Mexican heap leach assets to fund the building and commissioning into production of the Magino mine. And we know how that worked

[andre171]

Do you consider the 168M cash flow from the 43-101 to be unreliable, or is its allocation dubious?

[andre171]

On the other hand, for Integra, the price of around $70M is barely higher than a saving of around $60M in start-up capital expenditure for Nevada North in 2026, provided of course that this saving is proven!

[Tim2Agami]

22.0 ECONOMIC ANALYSIS 22.1 Introduction A financial analysis for FCM was developed by Argonaut and FCM using a discounted cash flow approach on a pre-tax and after-tax basis. The NPV was calculated from the cash flow generated by the project based on a discount rate of 5%. This has been undertaken for both a Base Case using expected metal prices and a Mineral Reserve Case at the Mineral Reserve

[Lifexprt]

Yup  No run with current gold price, it will be over $300M On a side note Alamos beat results, great report  Only issue is Magino still struggling, produced 22k oz and scheduled additional downtime this quarter  What a failure that has been since inception 

[MikeySwoosh]

Alamos could use the US$107M of FCF they generated in Q2 and buy the remainder of FCGV (80.01%) for effectively the same value they paid for their last subscription (US$0.99/share), which also happens to be roughly equivalent to the NAV of Florida Canyon in the latest technical report. They could then just print money by hedging the production through LOM of Florida Canyon. It sure would be nice

[andre171]

Do you think the ITRG takeover will finally be approved by Florida Canyon shareholders in October?

[MikeySwoosh]

I think that all depends on the SP of ITR over the coming couple of months, and the POG. For some context, this outcome feels very familiar as a former Argonaut Gold shareholder, where cash is harvested from a mediocre mine(s), though now very profitable with the POG where it is, to fund the development of a flagship asset(s). People on this board probably know the fate of Argonaut at this point..

[andre171]

Thank you for your informative reply. As an ITRG shareholder, I'm quite satisfied with the operation!

[Lifexprt]

ITR now has over $1B of development assets, potential low cost 200k oz production profile in few years and current cash flow to get those assets to construction decision without need for additional dilution. It's a win win merger although info agree FC was sold cheap, hoping ITR will rerate higher once initial reaction period passes. 

[andre171]

Okay, no financing problems until construction, but shareholders should already be thinking about construction. After the operation, market capitalization should be +- 210M CAD at the current price of 1.25 ITRG. For construction (DeLamar already has a capex of 355M), the market still needs to appreciate the company's value to enable access to better financing conditions with the least possible

[andre171]

ITR's share price is already down 22% since the announcement of the Florida Canyon takeover. FCGI shareholders in particular must be happy!

[Golder007]

as a shareholder, i will never approve this transaction. ITR over paid for this crappy asset but at least 2x.

[andre171]

I'm of the opposite opinion, as long as the price of gold stays above $2200. 

[LyChauncey]

What??? 2x??  Florida Canyon's 70k oz x (2507-1750) = $53M USD FCF. How much did we paid? about 60M USD??? I do not understand how is that not a steal.

[Golder007]

fcm aic is $2100+ and on top of that the company has to pay taxes; and closure liabilities of $50m+++. we will see if it is a steal. sounds more like a robbery of ITR shareholders 

[andre171]

The AISC over the life of the mine will be only US$1,525. If you want to be credible, explain your $2100!

[Golder007]

doesnt mean much. how much are they paying over and above that also counts as cash spend. various items you can see in the statements of the past years. do your math.

[andre171]

The 43-101 was not drawn up by Florida Canyon but by an independent third party bound by the rules in force for this study!