Calibre Mining Corp. (CXB.TO), a growing gold producer, recently held its Q2 2024 earnings call, outlining significant progress in its operations and maintaining its annual production forecast. The company reported successful gold production for the quarter and reaffirmed its commitment to meeting its yearly production guidance.
The construction of the Valentine Gold Mine is progressing on schedule, with an anticipated start of production in the second quarter of 2025. Furthermore, Calibre Mining is advancing its presence in Nicaragua and remains focused on delivering on its current projects while staying open to future opportunities.
Key Takeaways
- Calibre Mining delivered 58,754 ounces of gold in Q2, on track with the annual guidance of 275,000 to 300,000 ounces.
- The Valentine Gold Mine construction is 77% complete, with first gold production expected in Q2 2025.
- A 100,000-meter drilling program is underway at the Valentine property to explore its potential.
- In Nicaragua, the mining of the Volcan pit is progressing, and exploration programs are yielding positive results.
- The company's focus remains on delivering projects in Nicaragua, Nevada, and the Valentine project, with openness to future opportunities.
Company Outlook
- Calibre Mining is confident about meeting its full-year production guidance.
- Construction milestones at the Valentine Gold Mine are being met, with the project set to contribute to future production.
Bearish Highlights
- No specific bearish points were discussed during the earnings call.
Bullish Highlights
- The company reported robust production figures and a strong progress in its construction and exploration activities.
- Calibre Mining's exploration programs, particularly in Nicaragua, are showing encouraging results.
Misses
- There were no reported misses in the earnings call; the company appears to be meeting its operational milestones.
Q&A Highlights
- CEO Darren Hall emphasized the company's commitment to executing its current projects and potential to consider other opportunities in the future.
- Hall expressed gratitude to shareholders and indicated readiness for further dialogue.
Calibre Mining Corp. remains steadfast in its operational goals and construction projects despite the complexities of the mining industry. With the Valentine Gold Mine construction well underway and exploration programs across its properties yielding positive outcomes, the company is poised to maintain its production targets and strengthen its market position.
The management's forward-looking statements during the earnings call reflect a strategic focus on current projects with a pragmatic approach towards future expansion. Shareholders and investors may find reassurance in the company's steady progress and clear objectives as it navigates through the remainder of the year and beyond.
Full transcript - Calibre Mining Corp (CXB) Q2 2024:
Operator: Good morning, and welcome to the Calibre Mining Corp. 2024 Second Quarter Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Ryan King. Please go ahead.
Ryan King: Thank you, operator. Good morning, everyone, and thank you for taking the time to join the call this morning. Before we commence, I'd like to direct everyone to the forward-looking statements on Slide 2 of the presentation. Our remarks and answers to your questions today may contain forward-looking information about the company's future performance. Although management believes that our forward-looking statements are based on fair and reasonable assumptions, actual results may turn out to be different from these forward-looking statements. For a complete discussion of the risks, uncertainties and factors, which may lead to actual operating and financial results being different from the estimates contained in our forward-looking statements, please refer to the Q2 and year-to-date 2024 MD&A and consolidated financial statements available on our website as well as on SEDAR+. And finally, all figures are in U.S. dollars unless otherwise stated. Present today with me on the call are Darren Hall, President and Chief Executive Officer; Daniella Dimitrov, Senior Vice President and Chief Financial Officer; and Tom Gallo, Senior Vice President, Growth. We will be providing comments on our second quarter and year-to-date 2024 results, after which, we'll be happy to take questions. The slide deck we will be referencing is available on our website at calibremining.com under the Events section. You can also click on the webcast to join the live presentation. With that, I'll turn the call over to Darren.
Darren Hall: Thanks, Ryan. Moving to Slide 3. Good morning, and thank you for taking the time to join us today. Firstly, I'd like to thank all Calibre employees and business partners for their continued focus and diligence to responsively deliver another quarter. The organization's commitment [indiscernible] is demonstrated in the following three recent milestones. In June, the Calibre team in Nevada surpassed three years without a lost time injury. In Q2, our Nicaraguan operations reported year three conformance with the World Gold Council's Responsible Gold Mining Principles. This significant milestone reflects the team's commitment to foster positive impacts on the environment, engaging with and supporting local communities and upholding rigorous governance standards. And in early August, the team at Valentine passed 2 million hours worked without lost time injury. Switching gears, I would like to take this opportunity to welcome Daniella Dimitrov to the team as Calibre's SVP and Chief Financial Officer. Daniella joined Calibre in June, and her positive contributions are already evident. I look forward to Daniella's insights and contributions that we continue our journey to a quality mid-tier gold producer. Moving to the quarter. Consistent with expectations, the company delivered 58,754 ounces of gold in the quarter. Q2, saw higher tonnes mined, largely stripping at the open pits in Nicaragua, resulting in short-term cost tension is setting us up for a stronger production, leading to lower all-in sustaining costs in H2. Given our projections for the remainder of the year, we are on track to deliver into our full-year production guidance of 275,000 to 300,000 ounces. The team's progress at Valentine and Newfoundland has been very pleasing as we march towards first gold in Q2 2025, which I'll talk to more shortly. I'm excited by the significant exploration opportunities across our portfolio of assets, not the least being on our Valentine property, where we recently commenced a 100,000-meter drill program. More on that in a minute. Turning to Slide 4. As mentioned, first gold at Valentine remains on schedule for Q2 2025. The addition of Valentine to our portfolio of assets will establish Calibre as a quality mid-tier gold producer in the Americas, providing a complete rerate opportunity for all shareholders. I am pleased to report the construction of the fully funded Valentine Gold Mine was 77% complete at the end of July, and the team continues to make good progress, consistent with the schedule and spend provided in our May project update. A few recent highlights. Line of placement is well advanced at the tailings management facility, and we expect to retain water by the end of September. SAG, ball mill and primary crusher installation is well underway. CIL tank carrier construction is nearing completion. Steel mechanical piping and electrical and instrumentation is advancing consistent with schedule. The operations leadership team is employed and engaged in pre-commission activities with RCC. Importantly, federal environmental approval and provincial mining and surface leases for the Berry pit and associated infrastructure have all been obtained during the quarter. We have commenced a scoping study to review Phase 2 process plant expansion options focused on investigating combination circuit alternatives. It's early in the analysis, but I'm encouraged that there are options which may present even higher returns than the feasibility study envisaged with the original Phase 2 plan. With C$211 million at initial project capital remaining to be spent, and C$350 million in cash and restricted cash, the Valentine build is fully funded. Moving to Slide 5. This slide provides an aerial view of the Valentine site, looking Southwest over the tailings management facility towards the process plant and mining operations. The photo provides a good perspective of not only the scale of the project, but importantly, construction progress. It's great to see the project evolve as the team steadfastly progresses towards first gold in Q2 2025. Turning to Slide 6. The Valentine Gold Mine surrounding property offers a robust 5 million-ounce resource base and numerous discovery opportunities from an extremely prospective array of exploration targets. With similar geology to the prolific Val-d'Or and Timmins camps in the Abitibi gold belt. It is this prospectivity, coupled with the encouraging results we've seen, which support recently announced expansion to our Valentine exploration program. During Q2, we commenced an additional 100,000-meter drill program across a flagship property to confirm the vast potential of the Valentine District comprised of 64 kilometers of high potential discovery opportunities along with two parallel shear zones. This program is in addition to the previously announced 50,000-meter ore control RC drilling program and the 10,000-meter Winkie and RAB drilling program, which is focused on testing for bedrock geology. Additionally, drill results from the exploration programs across Nicaragua reinforce the potential for discovery and resource expansion, both within the 176-kilometer – square kilometer Eastern Borosi land package located in the Northeast and the VTEM Gold Corridor located within the Limon Mine Complex. At Volcan, rapid progress following receipt of key environmental approvals for the development of the open pit resulted in first ore being delivered to the Libertad mill within a month of permit receipt, which will contribute to a stronger H2. Drilling of Volcan confirms the deposit can host higher-grade new surface gold mineralization in excess of the initial open pit resource average of 2-grams per ton. Moving to Slide 7. In closing, I am confident in our ability as we have demonstrated to deliver on our commitments with detailed engineering at 98% and construction at 77%, Calibre is well positioned to responsibly deliver the Valentine Gold Mine and commenced production in Q2 2025. The company remains committed to deliver into our 2024 production guidance as we drive increased production and lower costs during the second half of the year. With demonstrated resource growth and discovery potential across all assets, Calibre will continue to add significant value through investment in exploration. We will continue to look forward and grow the company organically, maximize the full potential of our existing assets and choose the most sustainable and accretive path forward to drive shareholder value. With that, we're happy to take questions. I'll pass it back to you, operator.
Operator: We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Don DeMarco with National Bank. Please go ahead.
Don DeMarco: Thank you, operator. And good morning, Darren and team. My first question has to do with the derisking of mining in year one. It's great to see that the build is coming along nicely. But now looking beyond the build, can you remind us of the reconciliation drilling in the pits that are planned to be mined in the first year?
Darren Hall: Yes. Good morning, Don. And thanks very much, Don. Yes. No, if we look – if we remember back in February, we provided an update on the infill drilling there at Leprechaun. And we saw positive reconciliation results, both in tonnes and ounces, and additionally, led us to identify some extensions to – leading from the Southwest of Leprechaun into the Frank zone, which Tom and the exploration team have been following up with infill drilling as well, and we've provided some results, and we look forward to providing some additional results in the very near future. With that being positive, we continue – we've been continuing the background with infill drilling in Marathon and we would anticipate in the next month to two providing an update there as well. But initial results are not disappointing, suppose to say.
Don DeMarco: Okay. Thanks. And then shifting to Nicaragua, we saw the press release that you're now mining from the recently permitted Volcan pit. And there's no adjustment to guidance, but is this sort of on track with your timing? Or do you feel that maybe you're into this Volcan pit a little earlier than expected?
Darren Hall: No, Don, it's consistent with – yes, as we push – added earlier in the year that we were H2 weighted. We did have some impact earlier in the year, which moved some ounces from Q2 into H2, but Volcan was always part of the plan in the second half, and particularly as we lead into Q4. So no, the encouraging thing here was, again, demonstrating the ability to go from permit to plant very quickly and ore delivery into the plant within a month of [indiscernible] receipt.
Don DeMarco: Okay. Great. Well that’s all for me. Good luck with the rest of Q3. Thank you.
Darren Hall: Appreciate it. Thanks very much.
Operator: The next question comes from Farooq Hamed with Raymond James. Please go ahead.
Farooq Hamed: Hi. Good morning, everyone. Darren, my question is just kind of looking forward at Valentine a little bit. As you get towards the end of the construction and into your start-up, which is expected for the second quarter of 2025, the last stages of construction at Valentine seemed that they'll be happening through the winter season, particularly Q4 of 2024 and Q1 of 2025. I'm just wondering, given there's probably going to be more challenging weather conditions during that winter season, do you have – can you give us some kind of view on how you want construction to move forward ahead of the winter season? Is there a certain kind of milestone that you're targeting or certain things you want to get done before the traditional winter season that might slow things down? Or how are you anticipating operating through that season? Will it just be kind of normal and no real slowdown expected?
Darren Hall: Yes. Hi, Farooq. No, I appreciate the question. And good questions as well. I mean, again, the most talked about thing in Newfoundland is the weather. But if we look at where we're positioned as we head into the fall and then into the winter season, the buildings are complete. The major components are on site. Now we have all the crushers, conveyors, SAG mills, ball mills being erected. The majority of that work will actually be done prior to the winter. We would anticipate being substantially mechanically complete early in Q4 in advance of the winter. And then additionally, the majority of the work that will be done during the winter will be done under cover inside the mill. So no, I think we're actually well positioned given the timing of activities heading into the January, February timeframe. So with the tailings facility, as I mentioned, will be materially complete here in Q3, and we'll be in a position to take water. Those civil works will be behind us as well. So no, we're really well positioned.
Farooq Hamed: Okay. That's good. Thanks for that color. Maybe if I can ask a follow-up question that's more kind of more strategically focused, and I appreciate that a lot of your concentration and effort right now is focused at the project at Valentine. But if we kind of look a little bit forward and assume that Valentine will start up as expected, going forward, do you see – obviously, then you diversify your production base after that. But going forward, do you see Nicaragua as an area that you would want to continue to consolidate and continue to look for opportunity to acquire new assets? Or are you kind of happy with your Nicaragua exposure at this point and would potentially look elsewhere as you potentially look to expand?
Darren Hall: Yes. Thanks, Farooq. An interesting question. And of course, we get lots of airplay both at management and with the Board. But if you think of our single determined focus right now, it's to continue to deliver on Nicaragua, continue to deliver in Nevada and above all else is delivering the expectations with Valentine. And as we just talked about, we're well positioned given the 98% level of engineering we've got complete. The 77% construction complete being mechanically complete here in Q4, we're positioning ourselves well – deliver into. And anything that distracts from those three core activities in addition to reinvesting in the drill a bit for that organic growth is value destructive. So we're open to consider other opportunities but again, at this time, our focus is explicitly on those aspects of the business. And as we can and look to the future, we'll consider other things. But right now, the team is absolutely focused on those three aspects of the business.
Farooq Hamed: Okay. Thanks for that Darren. And good luck with the rest of the way on Valentine and looking forward to seeing the project in September.
Darren Hall: Yes. No, looking forward to hosting the visit in the first week in September, and it'll be great to see you there, and I'm sure you'll walk away feeling pretty positive about what you see. So thanks for it.
Operator: [Operator Instructions] Seeing no further questions, this will conclude our question-and-answer session. I would like to turn the conference back over to Darren Hall, President and CEO, for any closing remarks.
Darren Hall: Thanks, operator. I'd like to thank all of our shareholders for their continued support and your participation and questions this morning. As always, Ryan, I and the entire leadership team are available if you have any further questions. And with that, I'd like to wish everyone a wonderful and safe day. Back to you, operator.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines, and have a wonderful day.
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