That may be the case but the bigger picture suggests otherwise-...

That may be the case but the bigger picture suggests otherwise- in a couple of years with low operating costs IGR will become a big player- 51c is a joke IMO...nEWCREST MINING IN THE FOLD ALSO- if IGR have successfull underground expansion then they have a 10 year+ mine life without any more exploration- from memory they have over 2million ounces reserves

Gold spot prices will continue to increase- back up to 1720 - key is to hold over $1700- still think $1900+ by december


Plant upgrade finished ahead of schedule ? News: Integra announced today the completion of its ore processing
facility at its 100 percent owned Randalls Gold Project. This comes in ahead of schedule and the company also expects it will be below budget when the final costing is known.
? Upgraded plant: The upgrade expands the plant’s current capacity taking it from 750k tonnes per annum (tpa) to 1mtpa. This will support steady expected production of 100,000 ounces of gold production per annum from Integra’s flagship project.
? High margin: Supporting Integra’s position as a solid operator is the very good grades held across its tenements, averaging ~3 grams per tonne (gpt) at Randalls, and 2-2.2gpt at Integra’s other two yet-to-be developed projects Aldiss and Mount Monger. The higher grades yield variable cost savings in both mining and processing allowing for lower unit costs and higher cash margins with guidance that cash costs will remain just A$550 per ounce in FY12. This takes competitive pressures off Integra and strengthens the company long-term optionality during development.
? Funding: The plant upgrade was expected to cost A$12 million, which along with exploration work across its various projects, are both being fully funded using the company’s internal cash flow generation. Integra has over A$31 million in the bank and given the strength of its position as a low cost / high margin producer we expect that the bulk of its organic growth plans will be funded internally using cash flow in the medium-term.
? Growth profile: Currently operating at 90,000 ounces per annum, the newly completed plant upgrade will take total capacity at Randalls to 100,000 ounces. From September, Integra will be testing undergrounding mining at the Randalls Project that includes its Cock-Eyed Bob and Santa prospects - which combined, hold another 700k.oz of gold at an average 2.8gpt. If test mining proves viable this avenue will underpin the next leg of expansion for Integra taking its gold production up to 130k-140k ounces per year within two years.
? Integra also continues to self-fund the development of its Mount Monger Project that contains the Fingals and Majestic prospects – the latter a joint venture with Newcrest Mining.
? Hedging: Obviously in a rising gold market any hedging is a negative with hedged production recording paper-losses. While Integra does have part of its production hedged for the next two years, we recognise that it was in our view a necessary evil in order to obtain the debt funding needed to reach first production.
? Integra has close to 77k ounces of gold still deliverable over the next two years at an average set price just under A$1,400/oz.
? Recommendation: Integra is a growing low-cost gold producer under good management with a significant 2.5 million ounces of contained gold resources at an average grade of 2.6gpt and considerable potential to grow this number through continued infill and new drilling. We initiate coverage on Integra with a short- and long-term Buy recommendation.
In Brief
Recommendations
Short Term: Long Term: Risk: Price:
Price Target:
Snapshot
Monthly Turnover Market Cap Shares Issued 52-Week High 52-Week Low Sector
Business Description
Buy Buy High $0.53 $0.65
$44.0m $426m 843.5m $0.77 $0.38 Materials
Integra Mining Limited (IGR) is a gold exploration and production company operating predominantly in the Eastern Goldfields region of Western Australia. Integra's exploration activities are focused on the Randalls Gold Project in WA.
Investment Fundamentals Year End 2010


Analyst Name – Adrian Prendergast 03 9602 9384 [email protected]
Disclosure: The author owns no shares in IGR. E.L. & C. Baillieu Stockbroking Ltd ABN 74 006 519 393 www.baillieu.com.au Please read the disclaimer at the end of this report. Page 1
? Background: Integra’s three prospective projects, Randalls, Mount Monger and Aldiss hold a combined 2.5 million ounces of contained gold and all lie in close proximity to one another; less than 100km east of Kalgoorlie in Western Australia. Integra has been exploring the ground and expanding since 2003 with its flagship project, Randalls Gold Project, coming into production in September 2010 at a total capital cost of A$64 million.
? Randalls Gold Project: As part of its Phase 1 of production, the Randalls Gold Project, which was acquired in 2005, is mining at a current rate of 90,000 ounces per year from two open pits at Salt Creek and Maxwells and is ramping up to 100,000 ounces per year following the plant expansion. The Randalls project consists of several other prospective high grade deposits including Salt Creek North, Cock-eyed Bob and Santa which will be mined out as part of the open pits operations or through underground operations if feasibility on the latter is secured. This would represent the Phase 2 development at Randalls and see production increase to as much as 130-140,000 ounces per year.