Integra Resources to Merge with Florida Canyon in C$95 Million Deal

Integra Resources (TSXV:ITR,NYSEAMERICAN:ITRG) and Florida Canyon Gold (TSXV:FCGV,OTC Pink:FCGVF) announced plans to merge, saying they want to create a leading gold and silver producer in the US' Great Basin.

The agreement involves Integra acquiring all of Florida Canyon's outstanding shares. In return, Florida Canyon shareholders will receive 0.467 of an Integra share for each Florida Canyon share held. According to the companies, this exchange ratio values Florida Canyon shares at C$0.69 each, totaling approximately C$95 million.

The transaction was announced on Monday (July 29), and is expected to close in November. At that point, Integra shareholders will own about 60 percent of the combined entity, while Florida Canyon shareholders will hold 40 percent.

The merger is set to establish a diversified gold and silver producer with annual production of approximately 70,000 gold equivalent ounces from the Nevada-based Florida Canyon gold mine. The transaction will also integrate high-quality development projects, including the DeLamar project in Idaho and the Nevada North project in Nevada.

Last year, Florida Canyon produced around 71,000 gold equivalent ounces at net cash costs of US$1,368 per ounce and all-in sustaining costs of US$1,654 per ounce. A technical report published by the company in June forecasts a seven year mine life with annual output of 71,000 ounces of gold and 40,000 ounces of silver in the form of doré.

A 2022 feasibility study for the DeLamar gold-silver heap leach project in Idaho projects an eight year mine life and production of 136,000 gold equivalent ounces annually. Nevada North, comprising the Wildcat and Mountain View deposits in Nevada, is expected to produce 80,000 gold equivalent ounces annually over a 13 year mine life.

“This transaction represents a monumental step towards Integra’s long-term vision of building an industry leading USA focused mid-tier gold producer,” said Integra President and CEO Jason Kosec in a press release.

He also commented on Nevada North's proximity to Florida Canyon. The assets are located approximately 40 miles apart, and Kosec said the companies envision the development of a "20+ year mining complex."

Florida Canyon began trading on the TSXV on July 16 following a spinout of Argonaut Gold's US and Mexican operations. Argonaut's Canadian operations were acquired by Alamos Gold (TSX:AGI,NYSE:AGI) on July 12.

Shares of Integra and Florida Canyon ended the day down on the TSXV, falling 9.49 percent 12.7 percent, respectively.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.