Calibre Mining Corp
TSX:CXB
Earnings Call Analysis
Q4-2023 Analysis
Calibre Mining Corp
Calibre Mining Corp. celebrated a landmark year with their 2023 results, marking the fourth consecutive year of record-breaking performance for the mining company. The team, praised for their dedication and success, executed the development of 4 new mines, one of which included Pavon Central and Eastern Borosi within the year, all financed through operating cash flows. The company saw significant growth, with a 30% increase in production over the previous year, achieving a record-breaking output of over 283,000 ounces. This was accompanied by a stable total cash cost of $1,071 million and all-in sustaining costs maintained at $12.28 per ounce.
Calibre Mining has remained committed to becoming a quality mid-tier gold producer by driving robust operating cash flow, which stood at $200 million from operations, and generating over $550 million in revenue. This strategy was set to fund organic growth and they targeted a production forecast of 275,000 to 300,000 ounces for 2024. The recent acquisition of the Valentine Gold Mine positioned the company for a significant re-rate opportunity, promising to bolster its standing as a mid-tier producer in the Americas. The Valentine acquisition is seen as a compelling addition, with first gold production expected in the first half of 2025, ensuring the North American operations form 60% of Calibre's Net Asset Value (NAV).
The Valentine Gold Mine, located in Newfoundland and Labrador, is a transformative acquisition aimed to establish Calibre Mining as a significant player in the industry. With its long-life, low-cost production capabilities in a leading mining jurisdiction, the mine also provides substantial exploration potential. The construction progress is at 54%, on schedule for beginning production by H1 2025. The management team expressed confidence in the project's timeline and budget and anticipates updating investors with a detailed review in the second quarter.
Calibre's exploration endeavors revealed promising results, including a 15% increase in ore tonnes and a 12% rise in ounces, expanding their mineral reserves. Discoveries also encompass high-grade mineralization and new potential deposits further bolstering the company’s growth narrative. These findings mirror the company's capacity for successful exploration, particularly highlighted by the commencement of a diamond drilling program to explore the newfound potential at Frank located near the Leprechaun pit.
2024 is a pivotal year for Calibre Mining as it works toward enhancing its position in the mid-tier gold production market with Valentine Mine. Earmarking a significant 130,000-meter drill program, they anticipate unveiling continuous updates on Valentine's construction and its impending operational commencement. Calibre's strategy emphasizes sustained value creation for stakeholders, leveraging on their track record to fulfill commitments and execute strategic growth plans.
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Good day, and thank you for standing by. Welcome to the Calibre Mining Corp. 2023 Q4 and Full Year Financial Earnings Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Ryan King. Please go ahead.
Well, 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. 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 Q4 and full year 2023 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; David Splett, Senior Vice President and Chief Financial Officer; and Tom Gallo, Senior Vice President, Growth. We will be providing comments on our fourth quarter and full year 2023 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. And with that, I'll turn the call over to Darren.
Thanks, Ryan. Moving to Slide 3. Good morning, and thank you for taking the time to join us today. I would like to thank all Calibre employees and business partners for their continued support, which resulted in the company's fourth consecutive record-breaking year. Over the past 4 years, the company has responsibly delivered numerous successes since partnering with B2Gold to become a gold producer, not the least of them permitted and developed 4 new mines, including Pavon Central and Eastern Borosi in 2023, all of which were funded through operating cash flow, delivered 28% year-over-year production growth, grown reserves net of depletion, 370%, all the while building cash after investments from $4 million to $86 million. I'm proud of the team's 2023 accomplishments, which included delivering record production of just over 283,000 ounces, a 30% increase over 2022, met expectations on total cash and all-in sustaining cost of $1,071 million and $12.28 per ounce, respectively, and continued exploration success across all assets, including the high-grade expansion results on the VTEM Gold Corridor at Limon and announcing a maiden [ Balkan ] resource at Libertad. Turning to Slide 4. Our vision at Calibre has always been to establish a quality mid-tier gold producer by generating strong operating cash flow to fund organic growth, while seeking attractive opportunities to diversify and grow. We have consistently delivered into this vision and 2024 is anticipated to be another year of organic growth, with 275,000 to 300,000 ounces of production. Total 2024 spend prior to the Marathon acquisition was budgeted to be similar to 2023, which generated over $550 million in revenue and $200 million in cash from operations. Earlier this quarter, we completed the acquisition of the Valentine Gold Mine in Newfoundland and Labrador. This transformational transaction will establish Calibre as a quality mid-tier gold producer in the Americas and provide a compelling re-rate opportunity for shareholders. I would like to welcome the Valentine team to Calibre and acknowledge the support we have seen from all stakeholders in development of the Valentine Gold Mine. The rationale for the acquisition is clear as it is compelling. Valentine is a technically robust long-life, low-cost open pit located in a top mining jurisdiction, which has significant exploration upside. The property boasts a robust mineral endowment with production anticipated in the first half of 2025, which will result in approximately 60% of Calibre's NAV coming from North America. After the last 3 weeks on site and spending time with our stakeholders in Central Newfoundland, I'm encouraged by the overwhelming support and commitment to ensure the mine is a success. The construction team remains focused on the build and with overall progress at 54%, the schedule is on track for production in H1 2025. SAG and ball mill motors will arrive into Newfoundland today, and the mills are on the water and scheduled to arrive before the end of February. We are currently working through a fulsome review of all aspects of the project, including a [ rebased lining ] of the schedule and costs in anticipation of providing an update in Q2. At this time, I see no red flags. For a project of this magnitude, midway through construction, there's a lot of wood to chop, but I remain confident that we remain on target for first gold in H1 2025. While we have a core mining team, we have commenced preparing for commercial operations and are accelerating recruitment. In support of operational readiness, a letter of award for pre-commissioning, commissioning and start-up has been issued and contract execution is expected within the next month. A particular focus since the transaction has been to ensure responsibilities are clear, accountabilities are established, and authorities are delegated to ensure the entire team is aligned on delivering Valentine's full potential as we progress construction and prepare for operations. Given Calibre track record of delivering on commitments, Valentine complements our portfolio of existing operations, bringing to market near-term peer-leading production growth. Moving to Slide 5. Over 9,000 meters of closely spaced ore control drilling has been completed at the Leprechaun open pit, which substantiated the mineral reserve and further derisked the project as we advance towards gold production. The result in grade control model indicated an increase in ore tonnes of 15% and ounces of 12% within the initial ventures. The drilling also confirmed in-pit gold mineralization previously modeled as inferred, which add ore tonnes not included in the 2022 feasibility study. Additionally, high-grade mineralization was discovered on the southwest edge of the pit, highlighting strong exploration expansion potential given the limited drilling along the shear zone towards Frank. Results recently released at Frank located 1 kilometer to the southwest of Leprechaun, intercepted noteworthy results pointing to the potential for another deposit. We commenced a diamond drilling program this week to test the opportunity. Turning to Slide 6. This is a transformational time for Calibre as we establish ourselves as a quality mid-tier gold producer by bringing Atlantic Canada's largest gold mine into production. Building on our 2023 successes, I anticipate numerous risk catalysts throughout 2024, including results from our 130,000-meter drill program and construction and development updates from Valentine. As Calibre remains on track to deliver significant value for all stakeholders, I'm looking forward to another exciting year. With that, we're happy to take questions, and I'll pass it back to the operator.
[Operator Instructions] And I'm showing no questions at this time. And I would like to turn the conference back over to Darren Hall, President and CEO, for any further remarks.
Back to you, operator.
Thank you. This does conclude today's conference call. Thank you for participating, and you all may disconnect.