Calibre Mining Corp

TSX:CXB

Earnings Call Transcript

[Operator]

Good morning, ladies and gentlemen, and welcome to the Calibre Mining Corporation 2020 Q1 Financial Earnings Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Ryan King, Vice President, Corporate Development, Investor Relations. Sir, you may begin.

[Ryan C. King]

Thank you very much, operator. Good morning, everyone, and thanks for taking the time to join the call this morning. Before we get started, I'd like to direct everyone to our forward-looking slide, slide 2. Our remarks and answers to your questions today may contain forward-looking information about the company's future performance. Although forward-looking statements are based on what management believes to be 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 our MD&A filed on SEDAR yesterday. And finally, all figures are in U.S. dollars unless otherwise stated. Present today with me on the call are Russell Ball, Darren Hall, John Seaberg and Mark Petersen. We will be providing comments on our operating financial results for the first quarter of 2020, our exploration results and our outlook for the business in 2020, after which, we'll be happy to take questions. The slide deck we will be referencing during the call is available on our website at calibremining.com under the Events section. You can also click the webcast to join the live presentation. With that, I'll turn the call over to Russell.

[Russell Ball]

Thanks, Ryan, and good morning, everyone. Thanks for taking the time to join us. Notwithstanding our COVID-19 shutdown announced on March 25, I'm happy to be able to share our first quarter numbers which saw gold production in excess of budget at 42,085 ounces with an all-in sustaining cost on a consolidated basis of $1,030 an ounce. We increased our cash position from $33 million at the end of 2019 to $43 million at the end of March on an average realized gold price of $1,583 an ounce. John will speak in more detail shortly on the financials. During the quarter, we also announced positive exploration results from the drilling program at Libertad, Amalia and Limon. And Mark will give you an update on our thinking in regards to the resumption of the exploration program during the call. After more than a year of due diligence and negotiations, we entered into an earn-in and strategic exploration relationship with Rio Tinto. It is my pleasure to welcome Rio as our partner in Nicaragua. Rio brings tremendous global experience, expertise and the capital necessary to further unlock the tremendous mineral potential in Nicaragua, thus creating value for all stakeholders. Turning to slide 4. As disclosed on March 25, we proactively suspended operations as a result of the COVID-19 pandemic, and fortunately have had no positive cases in our workforce to date. While we furloughed almost 2,700 employees and contractors, we currently have approximately 120 full-time employees performing care and maintenance activities that will allow us to resume operations in relatively short order once that decision is made. We are presently in the process of reviewing our startup plan, and I anticipate we will restart operations on a phased approach before the end of May. We anticipate providing updated 2020 guidance, and more importantly, our 10-year look ahead with consolidated production and all-in sustaining costs for the company during June. Notwithstanding the suspension of operations, significant work continues, particularly in regard to permitting, land acquisition and our social responsibility investments. We continue to make progress with our neighbors at Barrio Jabali and expect to be in a position to resume mining operations at Jabali underground in the third quarter of this year. Darren and his team have been spending a lot of time on our hub-and-spoke operating philosophy. Some of you may recall that when we acquired these assets from B2Gold last October, the Street's consensus view was that we would be entering closure and reclamation at Libertad in mid-2020. I'm happy to say that it's definitely not going to be the case, and we'll let Darren explain in more detail shortly. Darren?

[Darren Hall, President, CEO & Director]

Thank you, Russell. As safety is a core value at Calibre, I'd like to thank all of our employees and business partners for maintaining their focus and safely delivering during the quarter. I'm pleased to report improving safety performance with a number of lost time injuries in Q1 2020 being less than half of what it was in Q3 of 2019. As Russell mentioned, we are planning on commencing a phased restart of operations during May, leveraging off our COVID health and safety protocols, which have shown to be effective during this temporary suspension. We will initially focus on mining operations and expand to processing in due course. Where practical, we will continue with people working from remote. Moving to slide 5. Another pleasing quarter at Limon, with the team delivering record production of 20,636 ounces at an all-in sustaining cost of $984 per ounce. With a full year of production history, we engaged RPA to complete a review of the Limon vein deposit models. For 2019, our active open pit, Limon Central, underestimated tonnes by 12% and grade by 4%, with the additional tonnage coming from multiple small swaths of mineralization which display limited continuity between drill hole sections, and consequently, were not modeled in the end of 2018 deposit model. As part of the Limon Vein Model Review, we have identified and scheduled 2,300 meters of drilling, which is anticipated to increase confidence in the currently disclosed mineral resources for the string of open pits along the vein to greater than 80% indicated. Focusing on production with the margin, we commenced owner mining at Veta Nueva underground during February, utilizing our existing workforce and reducing 75 contracted personnel. As part of our evolving hub-and-spoke operating philosophy, we obtained all the required permits and approvals and commenced ore haulage from Limon to Libertad during the quarter. Turning to Slide 6. As previously disclosed, we suspended blasting activities at our Jabali Underground mine as artisanal mining activities caused localized ground instability, impacting 21 households, several hundred meters from the mine. The government's negotiations are progressing well, with 7 property owners signing relocation agreements on April 2. The government is well advanced in its negotiations with the remaining property owners and as Russell mentioned, we anticipate recommencing operations at Jabali Underground during the third quarter of 2020. With our focus on production with the margin, we continue to look forward and execute productivity and cost-saving initiatives. Some recent examples include renegotiation of our cyanide and diesel supply agreements, which have resulted in annual savings of $1 million and $300,000, respectively. Despite the hiatus of Jabali Underground, Libertad delivered 21,449 ounces at an average all-in sustaining cost of $951 per ounce. During the quarter, we made significant progress advancing our hub-and-spoke operating model with approximately 20% of our Libertad production being sourced from Limon and Pavon. During March, we transported an average of 330 tonnes per day from Limon to Libertad at a cost of approximately $25 per tonne or equivalent of 0.5 grams per tonne. Moving to Slide 7. With the Nicaraguan assets being noncore in B2Gold's portfolio, over the last 5 years, they had seen a significant reduction in capital spend, both financial and human. The lack of drilling investment presents an opportunity or an exploration opportunity that Mark will talk to a little later. However, I believe that the key to unlocking value from these assets is looking at them from a different perspective, a fresh set of eyes, if you will. A couple of very simple examples to illustrate my point. A week after closing the deal, we idled 1 of the 2 gold mills at Libertad, having negligible impact on metal production but eliminating approximately $550,000 per month of cost from the business. That change alone will fund over half of our in-progress $12.9 million approved initial exploration drilling program. Another example of fresh eyes is Pavon. During the second half of 2019, we completed an independent NI 43-101, which increased the Pavon resource threefold from 78,000 ounces to 292,000 ounces. Notably, the 214,000-ounce resource increase came without drilling a hole, with 80% of the resource being classified as indicated, grading greater than 5 grams per tonne and using $100 per ounce lower gold price than the previously reported resource from 2014. At Pavon Norte, we have issued a contract and have all required permits to commence construction of the primary haul road. Additionally, we are currently working through the permitting process and anticipate having all required permits to commence mining in Q4 of this year, which is a good segue into a hub-and-spoke approach to maximizing value from our consolidated asset base. The key here is not to think about the assets as 2 unique operations but as single business entity with a combined 2.7 million tonnes of processing capacity, split between 2 mills, connected by paved infrastructure. The value proposition is quite simple, to improve the utilization of our installed processing capacity. Limon is mill constrained and Libertad has significantly more processing capacity than it can currently feed from Libertad ore sources. For $25 a tonne, we can move ore between properties and tap into the excess capacity at Libertad. Proof-of-concept was demonstrated during Q1, where Libertad produced over 21,000 ounces with approximately 20% of the production source from Limon and Pavon. This was the first time that the operations had seen this level of integration. Let's consider how our hub-and-spoke approach could develop based on our end of year 2019 mineral resources, which except for Pavon, are based on B2Gold models generated on drilling data from the end of 2019. Limon open pit resource was 5.7 million tonnes at 5 grams. Given Limon's 500,000 tonne mill, this represents around 10 years of feed for the plant delivering on average approximately 70,000 ounces per year. Currently, there is 2.1 million tonnes at 4.5 grams in underground resources at Limon. Given there is spare capacity -- there is no spare capacity in the Limon mill, let's transport that ore to the Libertad mill. A simple mine plan for Limon: Open pit source mill and its underground ore to the Libertad mine. 1,000 tonnes a day of underground production transported to Libertad equates to approximately 45,000 ounces of annual production. Now let's roll in Pavon, 1,000 tonnes a day of 5 grams for Libertad, that's an additional 50,000 ounces a year. So before processing any Libertad sourced ore at the Libertad mill, it's not a stretch to see 95,000 ounces of production whilst only utilizing 730,000 tonnes or 1/3 of Libertad's installed capacity. Now let's add in ore sourced from Libertad. Considering 240,000 tonnes per year at 5 grams from our 1.2 million tonnes, 7.9-gram resource at Jabali Underground, this would equate to 35,000 ounces a year of annual production. So adding those 3 components together, 45,000 ounces from Limon Underground; 50,000 ounces from Pavon open pit; and 35,000 ounces from Jabali Underground, a mill which is planned to commence moving into closure during 2020 is now producing 130,000 ounces a year, while utilizing less than 970,000 tonnes or 45% of the installed processing capacity. Combined with the production from the Limon mill, we are now at around 200,000 ounces per annum with 1.2 million tonnes of capacity remaining at the Libertad mill. For every 100,000 tonnes of capacity we utilize at 3.5 grams, it will generate an additional 10,000 ounces of annual production. Hopefully that this simple example illustrates the value we can unlock from our hub-and-spoke philosophy at Libertad before considering the other currently identified resources while factoring in the positive drilling results since the end of 2018 while layering in additional exploration success, which we anticipate from this prolific and enduring [indiscernible] trends. As part of our life-of-mine planning process, we anticipate providing a 10-year look ahead during June. With that, I'll turn it over to John to review our financial results.

[John Seaberg]

Thanks, Darren. Let's turn to Slide 8. As previously mentioned, we produced 42,085 ounces during the quarter. However, revenue for the quarter of $59.4 million was derived from sales of 37,494 ounces at an average realized price of $1,583 per ounce, resulting in 3,330 ounces of finished goods inventory, which is net of 1,261 ounces produced from Veta Nueva, which is not yet in commercial production. Veta Nueva ounces were sold in Q1, the proceeds of which were credited to development capital. Net income for the quarter was $12.5 million or $0.04 per share. Cash flow from operations was $20.1 million for the quarter. After investing approximately $8.4 million back into the business in the form of mine development, purchase of property plant and equipment and exploration, we generated $10.2 million of free cash flow, bringing our quarter-end balance to $43.1 million. Consolidated total cash cost and all-in sustaining costs were $884 and $1,030 per ounce sold, respectively, compared to an average realized gold price of $15.83 for the quarter. With the remaining $15.5 million payment to B2Gold deferred until April 15, 2021, and an April 30 cash balance of $36.7 million, we are in a strong financial position. With that, I'll turn it over to Mark for an exploration update.

[Mark Petersen, Vice President of Exploration]

Thanks, John. Turning over to Slide 9. Last year, when we began our exploration drilling program focused on resource expansion opportunities, and first pass testing of potential new discoveries at El Limon and La Libertad, now 6 months and 18.6 kilometers into our program, we're encouraged by the upside potential we see emerging at both sites from both Europe and longer-term perspectives. It's also really great to see our all-in exploration costs coming in more than 20% below budget at $210 per meter, which will allow us to extend our program well beyond the originally planned 47,000 meters. Most of you have seen our Limon and Libertad Amalia exploration news releases that were issued during the first quarter, which included positive drill results at Limon Norte, and more recently at the Panteon vein, where we announced multiple high-grade intercepts, including 17.7 grams per tonne over 10 meters true width. Limon Norte is located approximately 200 meters north of the Limon Central Open Pit, and Panteon is located approximately 150 meters west of our Santa Pancha underground mine. At Amalia, located 35 kilometers from the Libertad mill, we announced some initial results from a new vein structure that had never been drilled before. We're very pleased with the positive results coming from targets that range from near-mine resource step-outs to untested greenfields opportunities. And we look forward to when we can resume drilling with the operational restarts at Limon and Libertad. Despite the suspension of operations last month, our exploration team has been keeping busy integrating these latest results into our deposit models and exploration targeting framework. Those of you listening on the call have likely seen this. Our plan map of the Limon Mining district showing the principal vein structures and recent 2019 and 2020 drilling locations at Limon Norte and Panteon in relation to current sources of mill feed at the Limon Central Open Pit and Santa Pancha underground mine. Turning to slide 10. You can see some of the recently announced results from our drilling in Panteon and the plan map along with a cross section, showing just how close the Panteon ore shoot is relative to the Santa Pancha mine. On restart, without a doubt, we'll be resuming drilling to expand the Panteon gold deposit along strike and down plunge. On to Slide 11. Where we see a map showing the Libertad Amalia concessions along with the surface traces of the main vein systems and Amalia off to the Northeast. As you know, we got off to a good start with our first pass drilling campaign at Amalia with positive results returned from 3 out of the first 8 holes drilled. That's a pretty good result for a first pass campaign. Since the start of this year, we've been continuing our first Pass drilling program at Amalia and upon restart, we'll be expanding our focus to include reconnaissance mapping and sampling across the broader Amalia and neighboring Nancite concession package. To date, the Amalia area has not received the level of systematic exploration coverage that Libertad has. And given the results we're seeing so far, we're quite excited about the area's broader discovery potential. At Libertad, we've had 3 drills turning on 3 targets to test the down-dip potential at Jabali as well as the previously untested Tranca vein located 500 meters to the south. We will have updated results for Amalia and Libertad in the coming weeks. Finally, turning to Slide 12. During Q1, we engaged a consulting expert in structural geology to complete preliminary reviews of the district scale ore controls at Libertad and Limon. Through a combination of field traverses with our geologists who've been working the districts for many years as well as the wealth of high-quality legacy data provided by our predecessors, this work is highlighted at both sites broad areas of bearing cap rock alteration that's typical of the un-eroded cover sequences that overlie high-grade bonanza vein systems, systems like the 1.5 million ounce of Limon vein and the 1.2 million ounce Mojon-Crimea deposits at Libertad. As we continue to build our knowledge and grow our pipeline of exploration targets, we now recognize significant opportunities exist for the discovery of new high-grade bonanza gold systems concealed beneath barren cover and located in close proximity to established infrastructure at both Libertad and Limon. Upon restart, with the 6 drills we currently have between the 2 sites, we'll resume drilling with 2 drills at Limon, 1 at Panteon and 1 at Limon Norte; 3 drills at Libertad, 2 at Jabali and 1 at Tranca; and 1 drill at Amalia. We're also looking at opportunities to add more drills at both sites as we ramp back up. Looking forward, I anticipate we'll be able to extend our program to order 60,000 meters which is well above the 47,000 meter program originally envisioned. We'll also be expanding surface targeting work at Amalia, Libertad and Limon. And later in Q3, initiating drilling at Pavon. So with that, I'll turn it back to Russell.

[Russell Ball]

Thanks, Bob. And finally, on Slide 13, you can see the focus for the team for the balance of 2020. We look forward to updating you on our progress, particularly in regard to the exploration program, the development of Pavon and the integration of our operations through the hub-and-spoke approach in the form of our 10-year look-ahead in June. It brings us to the end of the formal presentation. With that, operator, we'd be more than happy to take any questions.

[Operator]

[Operator Instructions]Our first question comes from Justin Stevens from PI Financial.

[Justin Stevens, Precious Metals Analyst]

Congrats on a good financial quarter. Nice to see the plan being laid out as well. You did pretty good job answering most of the things I had on my list. But just a quick question on the excess gold production in Q1 versus the sales. Has that gold been sold? Or is that sort of still in inventory?

[Russell Ball]

John?

[John Seaberg]

Justin, yes, thanks for the question. No, no, that gold was sold in early April.

[Justin Stevens, Precious Metals Analyst]

Okay. Perfect. Yes, there's been discrepancy there. But also on the -- so the production from Veta Nueva is recognized in your total production number, but not in the sales number, correct?

[John Seaberg]

That's correct because it's not yet in commercial production. So the revenues were actually credited against the development CapEx.

[Justin Stevens, Precious Metals Analyst]

Right. Yes. But -- so some of the delta there is just from that accounting treatment as opposed to an actual lack of sales?

[John Seaberg]

That's correct.

[Justin Stevens, Precious Metals Analyst]

Okay. And then the only other thing I was wondering is, once operations restart, how long roughly do you expect it would take to develop over to Panteon?

[Russell Ball]

I'll let Darren take that one.

[Darren Hall, President, CEO & Director]

Yes. Justin, yes, we've actually done 120 meters of development in the first quarter of the year in anticipation as well. So we've commenced or we just completed an initial resource model. The last 4 holes for the recent round of drilling are coming in as we speak. We'll update that, and we anticipate updating that resource model by the end of May and probably providing a little bit more clarity on Panteon from a resource perspective and then plan forward either the last week in May or the first week in June.

[Justin Stevens, Precious Metals Analyst]

Got it. Great. Well, good job, guys. I'll leave it there.

[Operator]

Your next question comes from Andrew Weekly from SmithWeekly Research.

[Andrew Weekly]

Gentlemen, can you speak to the importance of your relationship with the government, local communities and how the company is mitigating single jurisdiction risk as a result of this relationship?

[Russell Ball]

Yes. Andrew, it's Russ. I'll take that, and then I'll ask Darren. Yes, we've been fortunate, we've been in country for 10 years as Calibre, mostly as a junior explore co until the acquisition of these assets and have developed extensive relationship, both at the local, national levels. B2Gold similarly was in country for 10 years. And we've had the benefit of, I think, their expertise in this area. If you look at B2Gold's track record around the world, they do an exceptional job developing those relationships, both immediately around the mines and just as importantly at the federal level. We got the benefit of inheriting that history, but more importantly, the people that we're working with B2. So Omar and Thomas, in particular, in country, came over on to the Calibre team from B2Gold and have been instrumental in maintaining and improving those relationships. I would say that the working relationship between us and the government, whether it's Ministries of Health, Energy and Mining is outstanding. And we are the largest producer in the country. And we have great working relationships and are able to leverage those relationships in the situations across the portfolio. So from my perspective, it's actually a great working relationship. And in the 10 years, both B2 and Calibre were in country, we've continued almost uninterrupted, except for a brief span in 2018 where some consumables were impacted. Darren, thoughts from your perspective?

[Darren Hall, President, CEO & Director]

No, Russell, I think you covered all the highlights there, mate. I mean there's not much I can really offer, apart from the fact that we have got excellent continuity with, I'll call it, the legacy B2Gold people coming on with Calibre. We also have our people from the legacy Calibre coming on to the new Calibre. And recently, we've made some organizational changes as well. Omar Vega was the country manager, and he had responsibility for operations and all facets of the business. Over the last month or so, we've really focused Omar on and rebranded him as Vice President and Country Manager, but focused pretty much exclusively outside the fence so to ensure that we maintain those good relationships with the federal governments and local governments as well. So he's got an excellent relationship with all layers of government. And so we've kind of remove the distractions of operations from his portfolio to ensure that we continue those relationships going forward as we're now investing, we're seeing exploration success, which is going to result in permitting requirements vis-à-vis Pavon. And we see things tracking on really well. I mean for example, I did mention that we've got the required permits to commence the development of the Pavon multi-access road and haul road. We got that without any issues at all, forestry permits, environmental permits through the appropriate processes. And I guess it's just -- it kind of highlights and demonstrates the good relationships we have with the regulators.

[Andrew Weekly]

Well, thanks, gentlemen. That's all I had. I appreciate your guys' good work, and I appreciate you guys coming out and clarifying that. I know it's important for investors. And I think you guys are doing a fantastic job with the relationship.

[Operator]

Your next question comes from Geordie Mark from Haywood Securities.

[Geordie Mark, Co]

Just to follow on from other questions there. Perhaps maybe holistically in terms of underlining maybe the dual hub-and-spoke approach going forward, give an idea of what makes sense in an equilibrium mode in terms of proportion of source components to come from various places, including Limon into Libertad? And where that sort of equilibrium is at Libertad in terms of the optimal phase up of throughput rates for material types, but also, obviously, capacity rates?

[Russell Ball]

Geordie, Russ, I'll let Darren get into the details, and a lot of this will become clearer when we provide the 10-year outlook in June. But I'll say, from my perspective, keeping that mill somewhere between 1.6 million tonne a year and with exploration upside, pushing that closer to the 2.2 installed capacity is clearly where we're going to generate significant value and that's the long-term focus of Mark and the exploration team, but I'll let Darren fill you in on some of our thinking around ore sources in regards to that Libertad mill. Go ahead, Darren.

[Darren Hall, President, CEO & Director]

Yes. Thanks, Russ. Geordie, yes. No, I guess I gave a bit of a precis there as we kind of went through the slides. But holistically, if you think about the capacity at Libertad, obviously, there's 2.2 million tonnes of installed capacity. If we think of 1,000 tonne a day, which is absolutely within the realms of reasonableness from Limon, similar numbers from Pavon, we're up to 2,000 tonne a day, which is 1/3 of the Libertad's installed capacity. And yes, that gets us to upwards of 100,000 ounces a year without too many difficulties. So then you start layering on Libertad. The primary source of Libertad as we currently understand would be heavily underground, if there are some other opportunities in there as well. But again, piggyback on our exploration success as we start to see extensions to heavily underground, some of the other emerging deposits coming in, Amalia, Tranca, we'll start to layer those in. So it's -- again, it will be a staged approach. But as I think of it right now, I can see pretty comfortably over the next 3 years or so, 1 million tonne a year at 4 grams being fed to that plant without any exploration success and predicated on the models we have, which, again, just highlighting [indiscernible] based on end of 2018 drilling data, they don't include any data that was only drilling that was done subsequent to December 2018, except for Pavon, that was a new resource, but all the other resource models that we currently quote are somewhat dated. So I think as we go through this process this year, we'll give a bit of an oversight here in June. But I think as we go through and update our models for the available information, do some conversion drilling, increased levels of confidence and do a more fulsome update to our 43-101s between now and the end of the year, I think that people will be pleasantly surprised with what they see.

[Geordie Mark, Co]

Okay. Good answer. Maybe a clean extension to that. Obviously, feeding material [indiscernible] potential outside sources there. Any particular significant sort of pressure points to move, say, Limon up to 1,000 tonnes per day or so?

[Darren Hall, President, CEO & Director]

No, Geordie. I mean we kind of had a very steady ramp-up through the first quarter, and we took it kind of slowly, slowly. We made sure that we carried along all of our stakeholders and we had all the appropriate approvals, and whether it be from the Ministry of Mines and Ministry of Environment, also engaging the unions at Limon to understand what we're doing, why we're doing it, and the local communities as well. And there was -- I think the team did a great job at socializing it, walking it through, and there's really no objections or no issues. And we saw that demonstrated in March when -- we did about 330 tonnes per day on average for the calendar month from Limon to Libertad. And it was not uncommon to see days greater than 500 tonnes a day. So no, I fully expect that, that 1,000 tonne a day is well within the realms of what's practical. So no, so far, so good, slow and steady, just making sure that we carry everyone along. And we understand the impacts. And very importantly with our service providers that they understand what's expected of them from a social perspective and also a safety perspective. So we're working with them to ensure that they've got the appropriate fatigue management processes in place with their operators and will support them and educate them on GPS monitoring a truck. So that we can remote monitor and make sure that they're obeying speed limits and do those sorts of things. So no, no, I think it's all coming together pretty well.

[Geordie Mark, Co]

And if I can indulge you on one more question. Maybe you said earlier. In terms of any milestones we should be looking towards for ultimately sort of coming out of the suspension of operations that we should be -- any of those milestones we should be looking at there to look at to show, I guess, coming out maybe later this quarter or later than that?

[Russell Ball]

Go ahead, Darren.

[Darren Hall, President, CEO & Director]

Yes, no, as Russ foreshadowed, we fully anticipate commencing a phased, so to say, a phased restart here during May. We've had initial discussions with our stakeholders in the last 24 hours. They're absolutely supportive. Nowhere the people are holding things back right now, the government, the communities, the workforce are all very keen for us to restart. We understand much better the situation in Nicaragua than what we did a month ago, which is effectively why we made the decision to idle out, as we saw this growing pandemic globally. We didn't understand what was going to happen in Nicaragua. We didn't understand how the country would respond. But again, we've seen no reported cases at the mine, none within the local communities and people are responding to the social distancing measures and things we're putting in place. So I think we feel much more comfortable. So I think we'll start to see things move pretty quickly. And I would fully expect us to be -- actually notwithstanding to be back at capacity before the end of the quarter.

[Operator]

Your next question comes from Tom Gallo from Canaccord.

[Thomas Gallo, Associate Analyst]

Just really quick on the exploration. You mentioned an increase of 60,000 meters. Is there a specific target of the ones we walked through, where were that maybe more of those meters are focused? Or is that just a broad increase of drill meters planned?

[Russell Ball]

Tom, I'll take that and then Mark can add. If you look at the savings we're recognizing on a per meter, we'll be able to drill that 60,000 for the same roughly $12.9 million, whatever it was $13 million budget. What we've told, Mark, is that in the event we have the opportunity to go after additional targets, we will fund that as well. So I'll let Mark speak to the details, but I think we feel very comfortable that when we bring this back up, we're going to have more targets realistically than we can drill. But Mark can give you an idea of where that additional 13,000 meters may end up going?

[Mark Petersen, Vice President of Exploration]

Sure. Yes, thank you for the question. I think right now, your description is more broadly focused, it's probably most accurate. But that said, certainly, we're going to continue focusing on the multiple targets that B2 identified at Libertad as well as some new things that are coming into view on the back of the recent review we did with the structural overview. That was mainly focused on Libertad but also up at Limon. And at Limon, that is a world-class gold district for this type of gold system. And we also have multiple targets to work on there. As I said, we'll continue with Panteon. That vein system, we've been focused on 1 shoot. We see an opportunity for another shoot just literally next door to it. Same with Limon Norte. We still got some work to do there. And once we think we've sufficiently grown what there is to grow there, we're just going to step north to the Tigra-Chaparral portion of the Limon vein system and take off there. But I am thinking that there's some opportunities to add at least 1 more drill up at Limon, either to partner up on the Limon vein structure, which is about a 2.5 -- kilometer long system. But as well, there are some other targets right in the neighborhood that have a lot of merit to get after. So like Russell said, yes, we have plenty of targets, and it's really a matter of just prioritizing where we want to deploy the drills.

[Russell Ball]

And Tom, this is where it really the hub-and-spoke and the integrated philosophy will add huge value for us. When we're able to take exploration success and turn it into production at roughly $25 a tonne or half a gram with no additional throughput capital required because we have 1 million-plus tonnes of installed capacity at Libertad that is unutilized. So if you think about it, we have 2 Limon mills that are sitting idle waiting for ore feed. And that's really the focus of the drilling program is to find material to feed that hungry mill at Libertad. And I think with the program we've outlined, I feel pretty good that, that program is going to deliver. You won't see any of that upside in the 10-year look ahead we provide in June. As Darren said, that's all based on essentially the end of '18 drilling but stay tuned.

[Operator]

Your next question comes from Martin Lowenthal from Calibre Mining.

[Unknown Shareholder]

I'm a shareholder. I'm not sure where -- I don't work for the company.

[Russell Ball]

I recognize the name. That's good to know, Martin.

[Unknown Shareholder]

I'll take a salary check if there's 1 available. Anyway, great job, great presentation, very interesting and very exciting. Most of my other questions were answered, the only 1 left is, are there any trends to move on to the main board in New York?

[Russell Ball]

That's a very interesting question. We had our Board meeting in yesterday, and that was on the agenda and a topic for discussion. Ryan has done a good job researching that and looking at that. And it's certainly something we're considering. I think it's not the right time for us right now. But it's something we're obviously looking at. As we look to grow the shareholder base, particularly south of the Board, I mean, as of today, we're largely a retail story in Canada. And that's going to change as we continue our efforts. We continue the execution and delivery. So definitely, in the plans, the timing is still TBD.

[Operator]

I'm showing no further questions at this time.

[Russell Ball]

Excellent. Well, thanks, operator. And again, thanks, everyone, for your time. And thanks to the team. We -- I'm blessed this year with an outstanding team that continues to deliver, and we look forward to updating you a lot of news flow around the restart. And we still have some exploration results we need to update you from the drilling program in Q1. And again, stay safe and we'll be in touch and communicating on a regular basis. Thanks again. Bye.

[Operator]

Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may all disconnect.