Operator
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 ask a question 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 Cervas, 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 trek you to the second slot 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 mine 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 eight-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. Delmar continues to advance through the federal permitting process under the National Environmental Policy Act, with 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 Delamar to prepare for future development. State of good repair initiatives are also underway on site, including test mining, 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 Delamar in the future. With the improved exploration plan of operations received at WellCAD, 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 gold 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. Starting 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 AISC 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 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 $0.8 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 leech pad facility and growth focused drilling programs at the florida canyon mine importantly in the quarter we released the results of our updated technical report and life of mine plan for florida canyon which demonstrated a 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. Now I'll hand the call back to George to discuss the updated life of mine plan at Florida Canyon.
Thanks, Cliff. When Integra acquired Florida Canyon in 2024 for approximately $68 million, we saw producing mine with 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've transformed the operation into a materially different mine. The technical report shows that Florida Canyon will generate more than 11 times the original acquisition cost of $68 million in after-tax free cash flow. Despite mining depletion, proven improbable 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 legion. 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 extensive 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 ASTRA 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's 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. 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 Nicole 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 a Notice of Intent for Delamar in the Federal Register, initiating the National Environmental Policy Act Review process, a formal start of 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 AUSANCO 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 Delamar, 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. During the quarter, the company also advanced the Nevada North project, which consists of the Wildcat deposit and the Mountain View deposit. Decision record documentation for the Wildcat Exploration Plan of Operations was complete as of April 9th, 2026, and the Reclamation Permit for Nevada Division of Environmental Protection Bureau of Mining Regulation and reclamation was received on April 20th, 2026, with an effective date of May 5th, 2026. 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. Integra 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. files the company reported q2 2026 revenue of 70.8 million with a cost of sales of 47.4 million resulting in 23.4 million 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 $0.07 per share, in Q2 2025.
Pre-cash flow was $9.3 million, or $0.05 per share, for the quarter. a meaningful improvement from 2.1 million or one cent per share in q2 2025. i will now pass the call back to cliff who walked where revised 2026 guidance for florida canyon thanks andre turning to slide 12. we are maintaining our 2026 gold production guidance for florida canyon 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, an increase of $9 million. The revisions to total cash costs and mine site AISC 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 prices, and higher diesel and explosive costs. The non-sustaining capital increase reflects advancing heap leach packed construction into 2026 from 2027 in line with our updated Florida Canyon Life of Mine plan. Our revised guidance assumes a gold price of $4,200 per ounce. Royalties remain price-sensitive with roughly $7 per ounce change in cash costs and Minesite 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.
Florida Canyon supports development costs per pipeline portfolio, creating a clear path for Integra to become a multi-asset, U.S.-focused, mid-tier 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. At Delamar, a 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, and 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 DelVar 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 U.S.-focused intermediate gold 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.
Operator
We will now begin the question and answer session. If you'd like to ask a question, please press star 1 in your telephone keypad. If you'd like to withdraw your question, simply press star 1 again. Your 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. 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-instaining costs in the future to reach, you know, either side of a conceptually widened range given, you know, what just transpired?
Thanks, Nico. Great question. And I think with respect to answering that question, I think the feasibility study that we put out sort of 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 before me. 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 increase in tonnage stacked and treated on heap leach pads. um that should start to calm down in 2027 as we access uh the new mining area in the central pits and the grades increase um i'm not sure what more color i can add but i know like over the next three to four years as the sustaining capital uh investments in the equipment and other infrastructures like uh in the plant uh making sure that some of the historic equipment there
is is upgraded um to improve its um longevity uh and reliability um that we uh the cost uh get back down to the 2300 to 2400 level as an all in ace okay um one thing and just a clarification One thing that caught by here in the report 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.
Thanks, Michael. I'm going to direct that question to Greg Robinson, our Mine GM at Florida Canyon, because he deals with those things directly. Greg, I think you're on the line.
Yes, I am. Good morning. It's a good question. The threshold is actually – they're different for process solution and hydrocarbons. The process solution is 25 gallons, I believe, for a quarterly reportable spill, which is what this was, and 100 gallons or more for an immediately reportable spill. So this one was a pipeline leak that was near the process plant on an old line. And it was a line that we replaced right afterwards and patched it up and moved on. And typically, we don't get a heightened response from the agencies if it's threatening other things or maybe ongoing. They might come out and visit and help us put a plan in place, but we typically don't see any enforcement action or anything unless it becomes a repeat, serious offense. and it's, you know, kind of highly subjective. It's not a black and white, you hit this threshold and you get an automatic enforcement action. But in this case, it's something that was repairable. It was, you know, it was just a small pipeline leak that happens everywhere and we were able to patch it up right away and move on.
Operator
Thank you, guys.
Operator
Your next question comes from a line of Joseph Rieger from Roth Capital Partners. Your line is open.
Hey, guys. Thanks for taking the questions. Just kind of wanted to ask, I mean, given the market is kind of stabilized a bit now on the gold price front, is there an opportunity for you guys to look for a development asset that kind of plug the gap between, you know, current production from Florida Canyon and Delamar's permitting timeline?
Yeah, Joe, and thanks for the question. As we mentioned on other calls, we're always, well, we're constantly looking for emanating opportunities, right? And the right fit ones are kind of exactly what you just described. I think that would be a good one for us to pursue. That said, those types of opportunities are very rare, as you know, in the context of North America, which is kind of the hunting ground that we play in, specifically the Western U.S. There's just not a lot of assets that are kind of in production that meet that sweet spot that could fill in sort of a gap between what Florida Canyon is going to do next year and what Belmar will do, say, three years out from today. So we're always on the hunt, but I have to say that those types of assets are rare right now. I'm sure you're hearing that from your other client companies as well.
Yeah, fair. And then on the production front, are you still comfortable with the full year guidance, given the slow start to the year?
Very much so. So, but again, I think I'm going to address that question to Cliff. He's got the same level of high conviction as we all do with respect to our production guidance for the year. But Cliff, do you have any comments on that?
I do. Yeah, good question. One of the enabling factors we have is because we did bring in the new trucks through December and January. and with the new shovel, we still have a significant portion of the 777 fleet that we were to start mothballing this year, but we can keep those on the road with the investments we made in the other part of the 777 fleet last year and into this year, the refurbishments. We feel comfortable that we have the capacity to increase the the tonnage rate and are watching it very closely and pleased with the results so far year to date with the the new mining rates with the fleet okay good to hear i'll turn it over thanks guys thank you joe your next question comes from a line of brian macarthur from raymond james your line is open good morning thank you for taking my question it really has to do with capex spending this year um with your updated guidance when you did q1 you sort of had
26 million but i think the feasibility starts let's talk about 80 for this year but then when we talk about the uh the tech talks about only doing uh 24 million year to date for sustaining i'm just trying to figure out where we are in the capex spend this year and how much we expect in the back half of this year and maybe even by quarter by quarter i mean i'm sort of looking at you know there's probably another 45 to 50 to go in the back half of the year but that's that's what i'm trying to reconcile between the financial statements yeah thanks brian uh i think a lot of the the the capital spend that you're referring to in the back half of this year a lot of it is
going to be guided towards the uh the heap leach pad expansion that we really need to get going on this year right so so that's a that's a big part of the cost coming up uh stripping obviously to prepare us for production uh next year in 2027 when when the production profile ramps up but uh again i'm going to pass things back to the cliff in terms of maybe uh taking walking through our our cap exit expenditure plans for the balance of the year and where they're where they're focused it's a fair question um it's we are planning to uh to achieve that the spend that we committed to um it's not going to be an easy feat but we are planning to uh to uh definitely will achieve the
stripping that we have planned um which is a big portion of that capex we're on track with the uh the phase 3C heat expansion, which we pulled from 2027 into 2026, which took a lot of effort from our capital planning team, our project team at site, which had other, I think, smaller, but also important projects for improvement. Those are now going to start to pick up in the latter half of the year now that we've got phase 3C underway. So you'll start to see the CAPEX to pick up here to the end of the year.
Okay, that's just what I was trying to check, right? Could we add the extra sustaining of those, or non-sustaining, about nine to 10, we're bringing forward, but we'll probably be timed on the original runway. So I'm right in assuming that the back half, assuming you hit your target, is gonna be quite a bit heavier.
Thank you very much. That's very helpful.
Operator
And there are no further questions at this time.
I will now turn the call back over to George Salamis for closing remarks thank you very much uh i've got no further closing remarks those are great questions by the way from the house we we really like it when our audience engages with us uh i've got nothing else to say thank you all for attending the call today uh i'll turn it back to you this concludes today's conference call thank you for your participation you may now disconnect
