Integra Resource's George Salamis on a Cashed-up DeLamar Gold Project

Trevor Hall [00:00:05] Everybody, this is Trevor Hall of Mining Stock Daily for all of you who have frequent the podcast here, you know that Integra Resources is a sponsor of the podcast. We're proud to have them on. Integra Resources trades on the TSX Venture with the simple ITR and on the OTCQX with the symbol IRRZF and is developing the pass producing DeLamar Gold Silver Project in southwest Idaho. We've shared a number of their announcements throughout the year, including their latest resource estimate, which was released earlier this summer with showed approximately four million gold equivalent ounces in the measured indicated category. And then following that, the made in PEA for the project established a net present value of four hundred seventy three million dollars Canadian IRR of 43 percent.

Trevor Hall [00:00:53] We haven't had George Salamis on the show here for quite some time, but today we are really resurrecting him onto mining stock daily. George, thank you so much for joining us. How have you been? I know you've been busy, but I'm trusting all as well.

George Salamis [00:01:10] Trevor, it's great to be back chatting with you. It's it's really been a while. And I'm trying to think about the last time you and I chatted. But a lot has happened since then for sure, right? It's been it's been a wild year. 2019 has been a great year. Really excited thing, you know, on all fronts. Right. The exploration front with the discovery sort of starting kicking off the year it's sold in gold and then the updated resource estimate with the big resource conversion to M&I category and then culminating in the PEA., which was great news for for us and kind of giving us the green light and then kind of ending with with this big financing that we just closed on yesterday. So it's it's been it's been a fun ride this year.

Trevor Hall [00:01:59] Yeah. I think the last time you and I actually chatted for the podcast was actually in your office probably in January of last year, I believe. Yeah. So we obviously we're not going to cover everything that has transpired over the last year. I know we've spent we've spent some time chatting with other people with management there since then. But there is a couple of recent developments, specifically with the financing now. I know when the financing came out, there was a strategic placement by core mining that was involved, plus a a bought deal for I believe is 22 million dollars. And at the time it was like, oh, that's you know, that's really good news. That's a big financing. Well, the follow up is sounds like, you know, SilverCrest kind of comes in with an 80 million dollar financing. So it sounds like sounds like capital is back into the market, at least for the time being. But let's focus let's focus on this this deal. There's a couple of questions I have for you. I think investors and listeners really would like to know about that, specifically with the strategic placement, with Coeur mining. I want to know is can you describe what this relationship with Coeur mining is now that they are involved with DeLamar? And how do you see this transpiring?

George Salamis [00:03:17] Yeah. First off, they did a lot of due diligence. They spent a lot of time sort of looking at all aspects of the project from exploration and exploration upside to the future, mine ability, if you will, of of the of the two deposits and the metallurgy. And, you know, they took a deep dove into all these aspects and obviously liked what they saw because they made their investment ultimately. But, you know, recall that 2019 a year where we didn't see and we know the royal we at large, you know, in the industry, we haven't seen a lot of strategic investments by majors in juniors this year. And so we we sort of felt really privileged to have, you know, somebody look at us and give their stamp of approval on us. And so, you know, look, we've got a great relationship so far. Is everything sort of working out really well? We've got a schedule for our technical committee meeting arrangements because that's part of the agreement with them. We're going to meet four times a year, which we'll share information that we'll get the benefit of of their experience because they're they're miners and we aren't where we're kind of trying to do two things, you know, keep the foot on the gas of exploration and develop a gold silver deposit in Idaho at the same time. And the latter is something that we are untested in. So we're counting on them for their great feedback because that's what they do.

Trevor Hall [00:04:47] Does that Coeur have any history with any of those deposits within that wider project area? I know Coeur. Obviously, historically, an Idaho company. Right. And I know they've moved headquarters to Chicago number of years ago, but. This basically it's right in their backyard. I mean, what kind of significance does that have to do with with this partnership?

George Salamis [00:05:10] Yeah, interesting, because you're quite right, Trevor. There, there, there, Genesis there, there. Start, if you will, in the mining business. Was Idaho, right? In the quarterly and district further north of us. And they you know, when when Dennis Wheeler started the company years ago, you know, that's where the company was headquartered and based out of. And they had assets up there. Well, as they started to kind of migrate their asset base outside of Idaho to different jurisdictions. And, you know, head office basically moved from there to Chicago. And so that said, they still have a lot of experience in the state. And so it was relatively easy for them to jump back in the saddle. And, you know, it's great to see them back in and albeit they were working in a different part of Idaho. They were from the northern part where they're kind of extreme southwestern part of Idaho. So it's a different jurisdiction altogether.

Trevor Hall [00:06:09] Let's move over to the the bought deal. I believe the final number was more than was it north of twenty two million dollars on the bought by your side.

George Salamis [00:06:17] George, it was. Yes. So the the the shoe was fully exercised. And I think sort of including the core the core strategic investment, I think the total came out to about thirty two and a half or something, you know, in that ballpark. Yeah. Look. Well, oversubscribed. There was demand in well in excess of that. You know, we felt it was just kind of prudent just to raise sort of one year's worth of of our proceeds to do what we need to do. So we stopped there. But there were certainly demand beyond that. And know a lot of demand obviously came from our existing roster of shareholders, institutional shareholders largely, and which was great to see because we kind of have that base load of demand, which is has been there on successive financings. We also have a couple of new shareholders who have been added to the added to the list. And again, that's we know we've developed from from a company that had when we IPO at about two years ago, we had very few institutional shareholders to about 65 percent of our registry is now institutionally held. And there's some pretty strong names there and we're really happy about that.

Trevor Hall [00:07:25] Well, in 2019, when capital was really hard to find for any junior mining project, you know, I would almost argue that Integra was an exception. Right. You know, earlier this fall sounded like there is demand from those shareholders to kind of ramp up exploration, which will given to here in a minute. And so you raise then and now it almost seemed like, well, once that was taken care of, there is even more demand to almost expedite the process and de-risk in kind of transition more into a peer first level strategy. Zebras basically across the crux of this financing  where it's heading.

George Salamis [00:08:05] Yes, it is. It's essentially two pronged where we're trying to keep our foot on the gas on two fronts, which is the exploration front, which is, you know, something that we we do very well. And we've added ounces and we've shown, you know, we continue to demonstrate upside as we as we push push the envelope on these projects. So we're never going to stop that. And by the same token, in parallel, we're going to we're gonna pursue directing the project with what we call feasibility related studies, which is we've got more metallurgical drilling and test work to do. We've got more engineering studies to do. We've got a couple of baseline studies to do to support future permitting. So it's really we're we're pushing pushing this on two fronts. And I think that's what our shareholders want to see.

Trevor Hall [00:08:52] Well, I think it's also a testament to how well you in the rest of management can balance this. Right, because when most companies are doing either exploration or then, you know, step you know, step out and definition drilling, you seem like you're taking everything from the basket and just throwing it all in and trying to manage it all. What's the challenges for you as a CEO of managing exploration endeavors and strategies while also kind of moving into PFS level type technical analysis here?

George Salamis [00:09:23] Yeah. That's a great question. I think I think our true strength lies in the people that we have managing this company at all levels. They're there. They're multitasking. These are people who can manage exploration and say permitting at the same time. And that when I see permitting, that's drill permitting and future development permitting. At the same time, we have, you know, geologists who can manage the expiration function and the metallurgical drilling function at the same time. So we've got you know, we've got people who can do two things, you know, in parallel very well. And I think that. Strengths, you know, otherwise we would have this huge team, which obviously would bring, you know, and it adds a whole bunch of G and a burn, which we don't have now, and know really happy that we have that kind of team that we do have to run this.

Trevor Hall [00:10:20] So I'm sure a lot of people are wondering specifically about the exploration. I know the two the previous studies that came out were really focused on DeLamar and Florida Mountain. But, you know, there's other there's other targets going on there that could potentially add more ounces to those numbers. Can you give us kind of a description of where exploration drilling is happening now and where we are in the process to potentially maybe hear of assay results from from from those endeavors?

George Salamis [00:10:53] Yes, sure. And it like this question can easily be answered by by our change in the way we view these deposits. So just roll the clock backwards to two years ago and when we acquired some of these assets from Kinross. Kinross, I believe, and other companies as well looked at all of these deposits as being sort of, you know, unique entities not exactly related to each other and sort of different, different variations of the same theme. We're now viewing this district as one big district. And because of that, we've added to our land and position. We've almost doubled our land position. In fact, I think we have doubled our land position since the Kinross acquisition a few years back. And so we're starting to look further afield outside of what's known outside of DeLamar proper and outside of Florida mountain. So now we're moving moving into areas, for example, War Eagle, where we've just completed a bunch of drilling before. So, you know, massive amounts of snow started to hit us out there. And and so on that front, you should see some results pretty soon, certainly before Christmas. Fingers crossed. And then early next year, we'll be moving into this area called Black Sheep, which is just north northwest of Delmar. And the interesting part of of of that area is that it's literally a stone's throw away from Dela Moreau, which is 3 1/2 million ounces. And yet, you know, it's a number of surface showings which, you know, have have hardly been drilled. I'm talking a handful of drill holes in an area that's five kilometers by five kilometers. And the number of surface showings and some massive geochem signatures associate with with these deposits that have never been drilled. And again, we're talking five kilometers away from DeLamar. So we're moving into that area called black sheep. And we're going to be drilling out there this spring. So lots to look forward to next year on the expedition front.

Trevor Hall [00:12:54] George, before we kind of move on to more Dee risking questions, I do want to ask you about Black Sheep. I know I was when I was on site there, I was specifically interested in getting  drills on the ground as he was there. But can you just walk us through some of what's taking place there this summer with some IP testing and maybe some sampling on the ground and what you're seeing thus far?

[00:13:19] Yeah, really interesting area. Trevor and this this whole area came about as a result of having Jeff Lindquist and Dick Selita on site, basically characterizing DeLamar from a low solicitation deposit perspective and trying to help us look for more of the same elsewhere. And, you know, every anybody who's in the exploration field would recognize those two names as being the sort of the the geo gurus, if you will, of of this style of gold silver deposits. So they basically pointed us to this area called black sheep and said, you have to look here that this is an obvious sort of geological, you know, dead ringer for what you're seeing at Del Mar, which is three and a half million ounces. So we proceeded to do soil geochem over the top of this area. And it's a big area. It's about five kilometers by five kilometers. So we came up with a number of really whopping anomalies gold, silver, arsenic on on site sort of things that are kilometers in length that have never been drilled. And then we proceeded to do surface sampling and mapping. And, you know, we've got grab samples related to these areas that go, you know, three to five grams gold and a couple and a gram silver, again, on areas showing that have never been drilled. We did do physics. We flew that entire area. So you can see a clear trend that connects Delmarva, three and half million ounces to two black sheep, which is really cool. And then we did IPI because AP works very well at DeLamar. We did some IPO for select areas of black sheep and we're coming up with identical charge ability anomalies that look like like, you know, dead ringers for what we're seeing at Del Mar itself again on areas that have never been drilled. So we're really excited to get in there. This sort of winter and spring with that with a rig or two.

Trevor Hall [00:15:18] Well exploraiton is exciting for me. Let's talk about some metallurgical coal. And I want to follow up on I actually want to follow up on some of the sulfide layer of golden at DeLamar. And I know the study there. There was a lot of work done on the oxide in some transitional stuff with the gold. Is there any advancements with the sulphidation gold below that that's happened?

George Salamis [00:15:47] Yeah, sure. So. So in answering that question, you really have to kind of break these deposits into it into two pieces. So looking at Florida, the EPA study that we have contemplates attacking the mining and extracting gold and silver from the sulfide portion as well. And that's that's the reason why we have that 2000 tons per day mill in the P.A.. So we've got 27000 tons a day of heat bleaching and two thousand tons per day of milling. And that mill is designed to treat Florida mountain sulfide only. And the reason why we looked at Florida mountain sulfide only was that the sulfide portion from DeLamar, which is a sizable part of the overall resource, it's almost 2 million ounces. The metallurgy wasn't ready on that to put into a study. So we decided to keep the mill small for now. So what we're working towards by mid-year in 2020 is an update to the PEA. study, which again looks at a lot, you know, large measure of what I'm going to call base load heap leaching, which is going to be the majority of the production profile, but an expansion of the mill capacity to treat DeLamar sulfide or un oxidized resource. And so we're doing that work now and then that work is going to sort of evolve over the winter. So we'll come up with a pretty good idea of in the context that Del Mar, what is sulfide that can be crushed, ground floated, maybe regrown in leached on site what what portions of that ore can be just directly cyanide leached and what portions can be concentrated and shipped off to, let's just say, Nevada and roaster or an autoclave there. And so we'll have a good handle on that over the winter and that that will be the backbone of the next study. My guess is we'll start to see production ranges well in excess of 200000 ounces per annum as a result of that step. Change of processing DeLamar sulfide.

Trevor Hall [00:17:51] George, so you've got exploration drilling going on. You have metallurgical worked for an updated PEA happening and you also have some PFS type studies that are undergoing. So it's like you go a little bit on your plate, right?

George Salamis [00:18:08] Oh, yeah. No. But it's fun. I've been in the business Trevor for 30 plus years. This is the most fun I've ever had. It's better. Yeah. It's the best team that that that I've ever worked with. Of course, it's the, you know, a large measure of the old Integra gold team. That's that's that's part of this. Which is which is great. Like nobody left. And yes, I'm having a lot of fun.

Trevor Hall [00:18:31] So what do you think's going to be the biggest challenge for the company here in 2020?

George Salamis [00:18:41] Yeah. The biggest challenge is, is, is and always has been. It's managing expectation on the exploration front, end quote. It's such a big area. It's almost we're almost in a position where there are too many things to test and we want to test them, you know, all quickly and and all at once. And so it's taking a measured approach to exploration, learning from our successes and failures and then applying that knowledge to the next one. So, yeah, it's it's it's refraining from trying to go too fast on the expiration front, on the metallurgy front, the PSA test front. You know that that has a certain rhythm and order to it, that that will just kind of take on a life of its own. I'm not worried about that.

Trevor Hall [00:19:28] Well, you talk about moving too fast. I mean, a lot of the developments, at least in the last four months, were really just kind of expectations and from shareholders. Right. You know, how do you how do you balance kind of a steady, steady, steady growth and development as a you know, in keeping, you know, the fast tracking of the project that your shareholders sometimes wanted demand? And how do you do that?

George Salamis [00:19:52] Interesting, because that that the financing that we did this past summer came as a result of us marketing to our shareholders and telling them, look, this is this, there's a PEA coming. We suspect it's going to look pretty good because we're focused on the PEA We've sort of taken our foot off the gas as of exploration and drilling. And they said, well, don't do that. Here's some money. You know, add add some drill rig capacity, which we did. So that, you know, the resounding message we're getting from all of our shareholders is great. Derisk the project. But don't forget about exploration. You've got to keep this sort of steady focus on exploration, which is going to lead to growth along the margins of these deposits and bigger studies in the future. And that's what they want to see. And then we're following their lead.

Trevor Hall [00:20:42] All right. Well, George, that's all the questions I have for you. Thank you so much for your time. I look forward to hopefully seeing you catching up with you again in January when I am up there in Vancouver for the roundup conference. And until then. Happy holidays. And best of luck to you and all of your colleagues there at Integra Resources seem to you to ever look forward to seeing you in January.

[00:21:03] That's George Salem, elements of Integra Resources, which is traded on the TSX Venture with the Symbol ITR and on the OTCQX  market in the U.S. with IRRZF. Mining stock daily and its affiliates are not responsible for any loss arising from any investment decision in connection with the material presented here in.