Calibre delivers strong value to its shareholders

Marc Zerbola Challande
minute read

Calibre Mining (TSX: CXB, OTCQX: CXBMF) is a Canadian company focused on the prolific mining districts of Nicaragua and Nevada, USA. The company has 100% of multiple assets in both countries and has produced 182,755 ounces from its four established operations in the Americas. The positive picture of the company is that company generates substantial revenues, with an adjusted net income of $6.6M over the last quarter. Year-over-Year, Calibre’s stock price is down by -40%, representing an excellent opportunity to invest in an established mining company with solid upside.

Company Overview

Calibre Mining (TSX: CXB, OTCQX: CXBMF) is an exploration and producing mining company focused on Nicaragua and Nevada, USA. According to the Fraser Institute, Nevada is the most attractive jurisdiction in the world (2021), represents 73% of US Gold production, and is the 5th largest global producer. Calibre acquired the gold-producing Pan Mine and development project Gold Rock in January 2022, with both 100% held. Nicaragua has a long mining history and is open-minded to mining investment. From the Borosi District, which produces over 7.9M ozs of gold, to Historical consolidated gold production by B2Gold at the El Limon and La Libertad gold mines of over 1.4 million oz, there is an extensive exploration potential across all assets.

Nevada assets

One asset we can highlight is the Pine Mine. The Pan Mine is a Carlin-style, open-pit, heap-leach mine in east-central Nevada, approximately 28 km southeast of the town of Eureka, on the prolific Battle Mountain – Eureka gold trend. Pan ramped up smoothly after restarting operations in September 2017. The Pan Gold Mine has established operations since 2018, which provided a solid production base, with 2021 gold production reaching 45,397 ounces benefitting from the recent heap leach pad expansion and primary crushing circuit installed in 2020. The exciting information is 2021 and 2022 drill results have demonstrated that the mine’s life potential can be extended. Strong from its 23 km land package, a 50,000m resource expansion and discovery drill program is underway, nearby known resources.

Recently, the company reported high-grade sulphide mineralization at its Gold Rock project, combined with an indication of deep, Carlin-type feeder systems. Additionally, high-grade drill results include 6.8 g/t Gold over 4.6m and 6.6 g/t over 5.8M.

Nicaragua assets

The Limon and Libertad are prolific mining districts for Nicaragua operations, with over 7.7 Mozs of a combined gold endowment. For Limon, Calibre explains 2022 has shifted from conversion and confidence to expansion and discovery, notably with multiple targets outlined via numerous layers of science. High-grade gold has been identified, and many data are exciting:

  • 66.03 g/t Au over 5.6 meters Estimated True Width (“ETW”), including 167.27 g/t Au over 2.3 meters and 14.95 g/t Au over 1.9 meters ETW in Hole LIM-22-4630;
  • 30.33 g/t Au over 5.0 meters ETW, including 40.62 g/t Au over 3.8 meters in Hole LIM-22-4628;
  • 22.55 g/t Au over 4.9 meters ETW, including 68.51 g/t Au over 1.7 meters in Hole LIM-22-4632;
  • 17.58 g/t Au over 2.4 meters ETW, including 28.67 g/t Au over 1.9 meters in Hole LIM-22-4627; and
  • 4.66 g/t Au over 1.7 meters ETW, including 8.20 g/t Au over 0.8 meters in Hole LIM-22-4637.

“I am excited by these exceptionally high-grade drill results from the Panteon North zone, located one kilometer northwest of the high-grade producing Panteon underground mine, as they continue to present significant opportunities for discovery and resource growth within the Limon Mine Complex.
Darren Hall, President, and CEO

Share Structure/Financials

On November 2, Calibre Mining released its third quarter and year-to-date financial results. For Q3 2022, the company sold 49,260 ounces of gold, grossing $85.2M in revenue (the average gold price of $1,730/oz),  and reported an adjusted net income of $6.6M, or $0.01 per basic share. Calibre announced it was on track to meet the 2022 consolidated production guidance of 220,000-235,000 ounces of gold. A piece of relevant information is about Nicaragua operations. The open pit gold grades increased 27% in Q3 2022 (vs. Q3 2021), and Calibre expects grades to continue to grow in 2023 and 2024. The Total Cash Costs per ounce (TTC) and All-In Sustaining Costs per ounce (AISC) were $1,188 and $1,322, respectively, compared to $980 and $1,097 for Q3 2021. The increase in this data is explained by inflationary impacts related to diesel and other commodities, pushing higher cash costs tied to operations at the Pan mine. Another robust data is the company holds $66.5M cash and restricted cash.  

The company continues to deliver positive and sustainable benefits to all stakeholders. Continued integration of our sustainability programs across the entire business enables Calibre the strong social license to operate as we continue to self-fund exploration and organic growth from operating cash flow.”
Darren Hall, President, and CEO

Regarding the share structure (data from November 1), the company had 450M shares issued and outstanding. Added to this number, the company has 31.6M options (avg.: $0.82) and 9M warrants (avg.: $0.95). Finally, the company has 3.7M restricted share units (RSU)* and 1.1M performance share units (PSU)**. The stock price is slightly above $0.82 and has a 52-week low of $0.52 for a $ 52-week high of $1.72. Analysts gave CXB a BUY signal, with a price target of $2.08, representing a 140% upside.

Bottom Line

Calibre Mining (TSX: CXB, OTCQX: CXBMF) continues to recover from its drop on October 26 and slowly and steadily recovers. The company holds a strong balance sheet with a solid cash position and remains on track toward its 2022 guidance. Analysts gave a $2.08 price target, showing the company’s potential to deliver a significant ROI to its shareholders. Calibre Mining positions itself as a solid asset to hold.

RSU: A restricted stock unit (RSU) is an award of stock shares, usually given as a form of employee compensation. The recipient must meet certain conditions before the restricted stock units are transferred to the owner.

PSU: A PSU is the right to receive a share of Common Stock in the future, subject to continued employment and achievement of performance targets.