Calibre Mining Corp. (TSX: CXB) (OTCQX: CXBMF) and Marathon Gold Corporation (TSX: MOZ) closed their previously announced merger, forming a mid-tier gold producer operating in multiple top-tier jurisdictions.
The company announced on Wednesday that former Marathon shareholders exchanged each Marathon Share they held for 0.6164 of a Calibre common share.
The arrangement also resulted in Calibre issuing a total of 249 million Calibre shares. After the merger closed, existing Calibre shareholders and former Marathon shareholders collectively owned approximately 65 per cent and 35 per cent of the issued and outstanding Calibre Shares, respectively.
The merger brought a 100 per cent interest in Marathon’s advanced stage Valentine Project in Newfoundland and Labrador, which is largely considered to be one of the top gold mining jurisdictions in the world. The combined company has an annual cash flow exceeding CAD$508 million.
The next step is for Calibre to delist Marathon Shares from the Toronto Stock Exchange. It will submit an application to cease being a reporting issuer, and promptly terminate its public company reporting obligations. Calibre anticipates listing and trading its own shares issued through the Toronto Stock Exchange.
The commissioning of the mill at Marathon’s flagship Valentine gold project is scheduled for Q4, and Calibre aims to achieve commercial production at the site by the end of 2025. Once the Newfoundland site is fully developed, the combined company will become a producer of half a million ounces per year.
Calibre anticipates Valentine Gold to add 195K gold ounces per year
Calibre’s current mine operations in both Nevada and Nicaragua provide the financial stability to enable the construction of the Valentine Gold Project. The project’s feasibility study specified that it would produce an average of 195,000 ounces of gold per year during the initial 12 years of operations.
In addition to the Valentine Gold project, the Marathon merger also brings access to multiple assets in multiple new jurisdictions. These include the Bonanza Mine, which is a historic former mine situated in Baker County, northeastern Oregon. Also, the Gold Reef property, which covers approximately 12 hectares of claims near Stewart, British Columbia, and a 2 per cent net smelter returns royalty on precious metal sales from the Golden Chest mine in Idaho.
In 2023, Calibre increased its gold production by 61,495 ounces compared to the previous year, marking a 27.7 per cent rise. The company also reported a 52 per cent increase in its cash balance by the end of the year. Calibre’s total gold production for the year reached 283,494 ounces, and the company currently holds CAD$86 million in cash.
During the last quarter of the previous year, the company achieved its fifth consecutive record for quarterly gold production, generating 75,482 ounces. Nicaragua contributed the majority with 64,963 ounces, while Calibre’s Nevada operations yielded 10,519 ounces.
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