Ann: Production Update , page-22

I was initially very disappointed with the production update IGR released today and ready to sell out. After calming my emotions, and spending a number of hours poring over the figures, checking and comparing the March quarterly, March quarterly cashflow, 1st. May Imperial drilling results, 3rd. May presentation, and today's announcements I'm prepared to suggest that imo IGR's production should once again be on track in the September quarter.

Production guidance for the June 2013 financial year remains at 100,000 ounces with potential upside from the underground mining.

Cash costs will rise to some extent due to a accounting benefit for IGR in relation to the 550,000 tonnes of low grade, stockpiled ore IGR will blend with higher grade ore.

"The accounting treatment requires that the cost of mining this 550,000 tonnes be included as a cash cost, even though Integra has already paid this cost... Integra has invested some $60 million in building the current 1.9Mt stockpile and will, in FY13, seek to realise a proportion of its latent value."

In addition, it is worth noting that "Integra’s total project debt is currently $8.4 million (down from an original $45 million)" which means if IGR had been debt free IGR would have accumulated that $36.6 million cash it has repaid - plus all the interest it has also paid!

Next financial year with debt repaid IGR's debt free cashflow should start to significantly increase.

IGR also only has hedging commitments of 7,979 ounces in the September quarter, 8,702 ounces in the December quarter and 10,229 ounces in the March 2013 quarter at A$1360 left, which then means a further increase in free cash flow.

Exploration upside remains huge - problem is coming to grips with it as IGR, with a $23 million budget, is exploring on a number of fronts and releasing strong results every so often from a large number of different exploration campaigns. I guess it would be simpler to understand if exploration was concentrated on just one or two areas.

However, imo exploration upside for a major discovery remains very strong and could be a big mover for IGR - particularly if gold soars to anything like US$2000 later this year, when I believe the market will start to take much, much more interest in gold exploration success than it has over the last 12 months or so.

Gold around US$1620 as I post.