Calibre Mining Q2 2023 Earnings Call Transcript

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August 10, 2023

There are 4 speakers on the call.

Operator

Welcome to Calibre Mining Corp. Q2 2023 Financial Earnings Results and Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer I would now like to turn the conference over to Ryan King, Senior Vice President, Corporate Development and Investor Relations. Sir, you may begin.

Speaker 1

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.

Speaker 1

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 Q2 2023 MD and A and consolidated financial statements available on our website as well as on SEDAR Plus. 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 of Growth.

Speaker 1

We will be providing comments on our Q2 year to date 2023 results, after which we'll be happy to take questions. The slide deck we'll be referencing is available on our website atcalibremining.com under the Events section. You can also click on the webcast to join the live presentation. With that, I'll turn the call over to Darren.

Speaker 2

Thanks, Ryan. Moving to Slide 3. Good morning and thank you for taking the time to join us today. I would like to start by thanking all ColorWare employees and business partners for their continued support, which resulted in our 3rd consecutive record breaking quarter. I'm very pleased with the team's performance, delivering a record 69,000 ounces at a total cash cost of $9.77 per ounce and an all in Sustaining cost of $11.78 per ounce.

Speaker 2

Operating cash flow increased to $59,800,000 a 38% increase over Q2 2022, generating free cash flow of $15,900,000 We delivered our highest quarterly net income, which drove earnings per share to 0 point 0 $7 133% increase over Q2 2022. With year to date performance being ahead of budget, we're well positioned to deliver our full year production and cost self fund all investments and continue building cash well beyond where we sit today at $77,000,000 During the first half of twenty twenty three, the team developed both the Pavan Central and Guapanol open pits. As ore deliveries from Guapanol ramp up from the 200 tons per day in Q2, we continue to strengthen our position to deliver our full year production commitments. During the quarter, we announced a number of favorable exploration across our assets, which continues to demonstrate our ability to discover new and expand existing resources. Turning to Slide 4.

Speaker 2

In early 2022, we completed the acquisition of Fiore Gold, establishing an Nevada base of operations with an underexplored 222 Square kilometer land package with potential to support mineral reserve and mine life expansion. A year on, we've increased reserves 23% net of depletion, Discovered Coyote located 3 kilometers to the south of the current open pit and defined Several priority targets. During the quarter, we announced new shallow high grade drill results at Palomino, which is adjacent to the South Pit. With Palomino results averaging between 0.5 grams per ton, it will positively impact resources at year end And more importantly, will positively impact mine grades within the year. I look forward to additional results as we continue to advance the drill programs across our mineral Moving to Slide 5.

Speaker 2

Since acquisition of the LeMond and Libertad operations in late 2019, Our exploration programs have made economic discoveries and grown reserves across our assets. I'm particularly excited about the significant success we have seen and the potential along the Pantheon B10 Gulf corridor at Limon. In 2020, we discovered and developed the Pantheon deposit, In May of 2022, we discovered the high grade Pantheon North deposit At the end of the same year, published the maiden mineral reserve of 244,000 ounces at 9.45 grams per tonne gold. 2023 drilling continues to demonstrate the potential long strike of the multi kilometer Vethan Gold Corridor, which we expect will have a positive impact on our year end Mineral Resources. This year, we announced drill results from the past producing Talavera mine Located just 3 kilometers from the Le Mans processing plant, which yielded high grade results, which again demonstrates The overall resource expansion and discovery potential of the enduring Limon district, which has produced more than 4,000,000 ounces since 1940s.

Speaker 2

With 9 drill rigs active across all assets, I'm excited about the future. Investment into exploration and property development Has yielded significant return as evidenced by a 20% year on year production growth and 2 80% reserve growth in Nicaragua. Turning to Slide 6. I believe Caliber presents a compelling investment opportunity as the company continues to self fund, resource, reserve and production growth, whilst concurrently building cash. We remain focused on sustainable mining practices, Prioritizing environmental stewardship and transparent engagement with all stakeholders.

Speaker 2

With that, we're happy to take any questions. Back to you, operator.

Operator

Our first question comes from the line of Justin Stevens with PI Financial Corp. Your line is open. Check to see if you're on mute, Justin.

Speaker 3

Sorry about that. I was on mute. Hey, Darren and team. Congratulations on another strong quarter here. So good to see the costs still yielding some pretty healthy margins, especially with A few questions on my side.

Speaker 3

You had previously indicated that the first half of the year was going to be a bit weaker than the second half of The year obviously just as a satellite operations ramp up in Nicaragua. Given the relatively strong performance we've seen In the first half here and from my numbers at least, sort of a little bit less sustaining capital than what I've been looking for so far. Do we expect maybe a bit of a catch up in Q3, Q4 in terms of some of that capital spend? I don't think the outs are going to drop off. But should we expect maybe a bit more of a flat cost and production half 1 and half 2?

Speaker 2

Yes. Thanks, Justin. Again, the Q1 or the H1 results Speak for themselves as we look forward for the balance of the year, we're pretty comfortable with where we've established guidance. And we expect the same trends to continue in the back half of the year as they have in the first half In terms of production and cost delivering into those annualized guidance, we are a little ahead on the production end and we've Positive results on the cash end. Some of those things will continue in the back half of the year.

Speaker 2

But as we're presented with opportunity for growth Investment, we will look at those options as we get into the back half of the year as we get into advancing 2024 production as well. I think the trends will continue similar to what we've seen. And I would anticipate end of year, we continue to see a significant build in cash and I'd like to see us at that north of $100,000,000 pretty comfortably after the end of the year.

Speaker 3

For sure. No, and if metal prices stay where they are, that should Emanently achievable, I think. Another one just sort of on PAN, maybe give us a bit of help in terms of how we should best think of this. I mean, obviously, you've had some decent exploration success here. So you're mostly thinking this is going to be looking to sort of build out the track in front of the train here in The mine plan giving you a solid few years mining sort of what you've defined in your pit And then maybe obviously there's still going to be some evaluation with Gold Rock and the like, but should we expect that to sort of follow after The mine plan is well established?

Speaker 2

Yes, Justin. I think that kind of nails it in summary. If you look at it, we've had the assets for just on a year, and we've had a moniker of success replacing reserves or growing reserves net of depletion. And with some of the recent results we've seen from Palomino and Coyote, we see good opportunity to be able to put more track in front of the train as it were. And Yes.

Speaker 2

The Palomino results particularly is that with the average reserve grade of PAN at 0.4 and these Palomino results between 0.5 gram and a gram And being within the permanent envelope and things we can bring into production in a matter of quarters, that will positively impact that production profile as well. So I think that Really, when we looked at these assets originally, it was an underinvestment in the good exploration potential we saw. And we're starting to understand what that potential can look like. And then as we roll through 2024, we'll bring some of these things in like Palomino And we'll be in a better position to assess how Gold Rock and other opportunities fit into that longer term investment portfolio.

Speaker 3

Got it. Sounds good. Last one for me, I think I've asked you guys this before, but just to make sure, obviously the V Tem corridor, the Patheon extension here Looks pretty stellar. The plan is still just to roll some of the resource reserve update with regular year end cadence Here are you looking potentially at anything outside of that regular timeframe?

Speaker 2

No, as it relates to Pantheon, Noorth, it's really about rolling it into the year end. I mean and we'll see what we can roll in for the year end. But more importantly, we're putting a team together to understand What that development opportunity looks like in that 2 to 3 year window as well is that given the excitement that surrounds it, one of the issues you always have is keeping Operator, we're wanting to develop TUIT tomorrow. So we've recently employed a project manager and experienced guy out of the industry to come in Kind of mentor that program through reporting into Dave Hendricks there in Nicaragua. So we can make sure that we do what makes sense for the Medium, longer term as opposed to short term, hey, bring it into production in 2025 or 2024, right?

Speaker 2

It's just like Let's take a nice balanced approach and see how that fits into the 5 to 10 year strategy for Raleigh Mart.

Speaker 3

No, that makes a lot of sense. And I think that the sustainable approach there is hopefully going to pay dividends for quite a while to come. And I'm looking forward to seeing what comes from the exploration over the next few kilometers along that trend too as well. But that's for me. Thanks guys.

Speaker 2

Appreciate it. Thanks very much, Justin.

Operator

Thank you. I'm showing no further questions in the queue. I would now like to turn the call back over to Darren Hall, President and CEO, for closing remarks.

Speaker 2

Thanks, operator. I'd like to finish by just saying I'd like to thank all of our Shareholders for their continued support and your participation on the call and questions this morning, it is appreciated. As always, Ryan and I and the leadership team are available if you have any further questions after the call or any point during the quarter. So with that, Jim, take care. Have a wonderful day and back to you, operator.

Operator

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

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Earnings Conference Call
Calibre Mining Q2 2023
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