>>21066535>>21066695Integra has such a collection of dog's breakfast projects. I like the management but the assets are third rate. The new post merger mine has about US$116M NPV7% at $2,300/oz Au, US$173.5M NPV7% at $2,500/oz Au, free cash flow roughly between US$21.5M and US$32M at $2,300/oz and $2,500/oz respectively assuming a 24% royalty+tax regime, US$1,500/oz average cash cost and US$300/oz average sustaining capital cost as per the technical report, and a seven year life of mine. Sure it's a cash flowing mine but after the C$95M takeover price and US$8M annual G&A not a massive free cash flow machine on its own, but free cash flowing nonetheless. Less G&A and ignoring exploration and growth capex, corporate FCF should be between US$13.5M and US$24M when gold is US$2,300-2,500/oz for the next seven years. At the current gold price the takeover should pay itself back through cash flow in about two years with another five years of mine life left, so not a bad deal even if the mine is decidedly mediocre. The operational efficiency synergies with their other Nevada assets also might more than make up for that takeover price.
Integra is valued at about C$225M fully diluted EV after the merger closes, with about C$20.5M in working capital thanks to the C$20M financing they just closed (US$10.5M is in convertible notes, they had a similar amount in cash at the end of Q2). Not a terribly high price for the combined assets, and the management team can probably make it work, but it sure is a bit of a dog's breakfast. The other Nevada projects and the Idaho project are pretty meh too, but certainly viable.
Idk if I want the company in my 'folio, should do some more DD before making a conclusive decision. At times like these I just look back at companies like Allied Gold and think to myself that value like that is hard to find elsewhere in the market indeed.
