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Saturday, Dec 9, 2023
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.


Calibre Mining broke gold production records with 10% increase in 2022

Calibre showed a total adjusted income of $12 million for Q4 versus the previous quarter at $17 million

Calibre Mining to purchase 50% of production royalty in Easter Borosi
Image via Calibre Mining

Calibre Mining (TSX: CXB) (OTCQX: CXBMF) produced a record number of gold ounces last year thanks to its high grade discoveries at its Nicaragua operations.

The Vancouver-based company announced it sold 222,991 ounces for an overall gross revenue of USD$403 million at a price of USD$1,808 per ounce in 2022.

The company saw a total adjusted income of USD$12 million for Q4 down from USD$17 million in the previous quarter. Despite the quarter decline, Calibre has continued to grow its production by 20 per cent year over year. Also, mineral reserves rose 370 per cent since 2019 to 135 million ounces with record grades at Calibre’s Nicaraguan portfolio.

Meanwhile, its production growth in 2023 from 250,000 to 275,000 ounces is fuelled by increased grades from Pavon Central and Eastern Borosi. Pavon Central’s open pit specifically delivered 800 tonnes per day at an average grade of 6 g/t gold.

Calibre also discovered new zones in 2022. With Panteon North, it went from discovery to a mineral reserve estimate outlining 244,000 ounces at 9.45 g/t gold in less than 12 months.

During 2023, Calibre intends on advancing a multi-rig drill platform to follow the VTEM Gold Corridor where it discovered 11.6 g/t gold over 9 meters, 1.5 kilometers along trend of Panteon North.

“The Calibre team continues to deliver on its commitment to grow the Company through reinvestment in exploration, mine development and acquisition.

Our investments have resulted in new discoveries, increased Mineral Reserve and Mineral Resources, delivery of key mine permits, development of new high-grade mines, all of which will contribute to significant production growth,” said Darren Hall, CEO of the company.

Read more: Calibre Mining Pan Mine assays show strong potential for Coyote mine target

Read more: Calibre releases short doc on environmental initiatives in Nicaragua

Calibre balance sheet shows strong development

The company is also waiting on results from the Phase I drill program at Golden Eagle Project in Washington State. Its original results include 4.30 g/t Au over 92 metres.

Mining operations at Pan continued as the company intended throughout Q4 2022.

The company possesses a cash and equivalents position of USD$56 million with assets sitting at USD$664 million and liabilities of $213.5 million. This produces USD$450 million in shareholder equity.

Dollar amount in thousands of dollars USD. Image via Calibre Mining.

Shareholder equity is the amount of money that would be returned to shareholders if all of a company’s assets were liquidated and its liabilities paid off. It’s an important measuring tool for a company’s financial health. It also gives an indication of how much money a company has to reinvest in operations.

A company with higher shareholder equity is seen as more attractive to investors and indicates the company has a strong financial position. It’s therefore more likely to generate returns for its shareholders.

The company did so without heavy over-reliance on debt facilities as well.

Dollar amount in thousands of dollars USD. Image via Calibre Mining.

In September 2022, the company took out a USD$19 million loan with Lafise Bank in Nicaragua. It used this money to buy equipment at the Eastern Borosi Project.

The interest rates were 7.2 per cent per year with the equipment securing the loan. It also possesses a cap of 10 per cent per year.

The company began monthly repayments on the loan in October 2022 and anticipates having cleared it by September 25, 2025.

As of December 31, 2022, the company has drawn down USD$13 million of the loan and plans to access the remaining funds in Q1 2023.

Read more: Calibre Mining increases mineral resources and reserves at its Nicaragua and Nevada operations

Read more: Calibre Mining finds robust drill results from Golden Eagle project

Calibre spent nearly USD$3 million in Q4 in G&A

During Q3 2022, the value of ounces contained in the heap leach pad was reduced by USD$3.3 million. This reflects the potential net realizable value based on the Q3 average gold price of USD$1,728. The write-down was partially reversed by USD$2.1 million during Q4 2022, of which USD$200,000 was non-cash.

The total cash cost (TCC) and all-in-sustaining cost (AISC) were USD$1,097 per ounce and USD$1,236 per ounce respectively, compared to USD$1,026 and USD$1,139 per ounce in Q4 2021. The higher AISC in Q4 2022 was due to inflationary impacts related to diesel and other commodities. Other issues included the high cash costs tied to Pan mine operations.

Calibre’s Nevada assets were much the same. The full year 2022 consolidated TCC and AISC were USD$1,129 per ounce and USD$1,259 per ounce respectively.

The higher costs compared to 2021 are due to commodity inflation and the operating costs for Calibre’s Nevada property.

Calibre spent USD$2.8 million in Q4 and USD$12.2 million for all of 2022 in corporate general and administrative (G&A) expenses compared to USD$2.1 million and USD$7.6 million for the same periods in 2021. The company spent more because of increased salaries, professional fees and increased travel and marketing expenses compared to prior periods.

Calibre’s growth comes partially from re-investment

The company has consistently re-invested in the business after the acquisition of its Nicaraguan assets from B2Gold (TSX: BTO) in 2019 and Fiore Gold in 2022. The results have been strong production, reserve growth, new deposit discovery and identification of new targets. These put Calibre in a position to unlock more mill feed sources and grow production in both Nicaragua and Nevada.

Calibre’s investments include exploration programs, like its 100,000-metre drilling discovery and resource expansion program in Nevada and Nicaragua.

The company’s 2023 production guidance reflects grade-drive production growth of 20 per cent over 2022. However, the 2023 total cash per ounce is budgeted to be lower than the 2022 actuals. Further, Calibre’s 2023 growth capital is budgeted to be 30 per cent less than in 2022, putting the company in a position for a strong free cash flow year.


Calibre Mining is a sponsor of Mugglehead news coverage

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