Integra Resources Is Flying High, But Can It Continue?

You might not have heard of Integra Resources [stock_market_widget type="inline" template="generic" color="default" assets="ITR.V" markup="(TSXV: {symbol} {currency_symbol}{price} ({change_pct}))" api="yf"], but this little-known development stage miner has set the stock market on fire this year thanks to the rally in precious metal prices. Integra stock has soared more than 55% in 2019, pulling out of penny stock territory, as it has managed to provide snippets of good news that have kept investors in high spirits at a time when gold and silver prices are soaring.

But the question is, should Integra investors continue to hold the stock in anticipation or more gains? Let’s find out.

A Closer Look at Integra Resources

Headquartered in Vancouver, Canada, Integra Resources’ primary mineral property is the DeLamar project in southwestern Idaho. The company is currently in the exploration phase at this mine, sharing regular updates about the progress that it has been making.

In August, Integra said that it has raised C$8 million through a non-brokered financing deal in a bid to boost exploration drilling. According to CEO George Salamis:

Recent news releases have reported substantial gold-silver resource growth at the Project alongside significant conversion of resources from the inferred category to the measured and indicated category. In addition, the Company has received very positive metallurgical test results for the Project, especially in the oxide and transitional gold-silver mineralization.

Encouraged by these findings, Integra shareholders decided to give the company’s drilling activities a shot in the arm by raising more money. More specifically, Integra’s shareholders believe that the company can add two to three drill rigs, drilling an extra 15,000 to 20,000 meters over the existing drilling distance of 30,000 meters.

So, Integra Resources seems to be pulling the right strings from a development perspective. But investors should note that its stock price rally will depend on the direction of gold and silver prices, as well as the company’s ability to keep delivering on the operational front.

Some Things to Keep in Mind

Integra Resources seems to have a decent balance sheet. Its cash position of C$7.17 million exceeds the debt of C$5.33 million. However, the company will need to raise finances if the DeLamar project moves into the construction phase. But before that, Integra will need a favourable preliminary economic assessment (PEA) that’s due in the second half of 2019.

So the company’s ability to raise money and move ahead rests on the PEA to a large extent.

But if the PEA turns out to be favourable, Integra could keep doing well on the stock market as the resource profile of the DeLamar project seems attractive. The mine has a measured grade of 0.98 grams per equivalent ton of gold. As such, Integra investors should wait for the PEA and decide their next course of action based on the report.

A favourable assessment could help the stock deliver more upside, especially considering the weak macroeconomic environment. On the other hand, a weak report could dent the stock’s recent rally.

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

Harsh Singh Chauhan has a wealth of experience evaluating publicly-traded companies across several verticals, including technology, oil and gas, retail, and consumer goods. His financial writing has been published across platforms such as The Motley Fool, TheStreet, and Seeking Alpha. Harsh's philosophy is to find great businesses for the long run based on company fundamentals and industry prospects. Address: 682 Indian Road, Toronto, Ontario, M6P 2C9. Phone: 416-721-8257.


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