Calibre Mining Corp. (TSX: CXB; OTCQX: CXBMF)
(“Calibre” or the “Company”) is pleased to announce financial
results for the three and twelve months ended December 31,
2019. Full Financial Statements and Management Discussion
& Analysis documents can be found at www.sedar.com and the
Company’s website, www.calibremining.com. All figures are in
United States dollars, unless otherwise stated.
FOURTH QUARTER 2019 AND 2019 HIGHLIGHTS
- Delivered on cost guidance for the fourth quarter with all-in
sustaining costs (“AISC”)1 at El Limon, La Libertad and
Consolidated at $928/oz, $889/oz and $959/oz, respectively;
- Delivered on production guidance at El Limon with fourth
quarter production of 15,440 ounces of gold;
- Delivered on production guidance at La Libertad with fourth
quarter production of 18,066 ounces of gold;
- Cash generated from operating activities of $20.7 million for
Q4 2019;
- Net income per share of $0.01 for Q4 2019; Adjusted net income
per share1 of $0.04 for Q4 2019;
- Ended 2019 with a cash balance of $32.9 million;
- Completed an updated resource estimate for the development
stage Pavon project, with a 318% increase in the indicated resource
to 230,000 ounces of gold at an average grade of
5.16 g/t;
- Commenced an initial $13 million, ~47,000 metre resource
expansion and discovery drilling program;
- Announced high-grade drill results from El Limon including:
18.65 g/t Au over 5.1m estimated true width; and
- Announced high-grade drill results from Amalia including: 17.84
g/t Au over 7.0m estimated true width.
Russell Ball, CEO of Calibre stated: “Since closing the
transaction with B2Gold in October 2019, I am very pleased with the
team’s accomplishments including delivering on guidance with
production of 33,506 ounces at AISC of $959/oz. We continue
to see opportunities for improved efficiencies as we integrate the
two operations to maximize the value from our combined asset
base.
Our drilling program was accelerated in February 2020, with six
drill rigs now active at La Libertad and El Limon. Recently
released drilling results strengthen our belief in the resource
expansion and discovery potential at La Libertad, the Amalia
prospect and El Limon, which have produced over 5.2 million ounces
of gold.
Our goals for 2020 are to continue to optimize and integrate our
operations, deliver on 2020 production and cost guidance and exit
the year debt free and with a robust treasury.”
SUMMARY OF CONSOLIDATED
RESULTS
Consolidated Financial Results2
|
|
|
|
|
|
|
|
|
|
$000
(except per share and per ounce amounts) |
Q4 2019 |
|
Q4 2018 |
|
|
2019 |
|
2018 |
|
Revenue |
|
$57,763 |
|
- |
|
$57,763 |
|
- |
|
Cost of sales
(including depletion and depreciation)3 |
$(44,419) |
|
- |
|
$(44,419) |
|
- |
|
Mine operating
income3 |
$13,344 |
|
- |
|
$13,344 |
|
- |
|
Net income (loss) |
|
$3,130 |
|
(282) |
|
$920 |
|
(935) |
|
Net income (loss)
per share |
$0.01 |
|
(0.01) |
|
$0.01 |
|
(0.03) |
|
Adjusted net income (loss) per share1 |
$0.04 |
|
(0.01) |
|
$0.10 |
|
(0.03) |
|
Cash generated
from (used in) operating activities |
$20,675 |
|
(120) |
|
$19,167 |
|
(635) |
|
CAPEX (accrual
basis) |
$9,997 |
|
- |
|
$10,013 |
|
6 |
|
Exploration (accrual basis) |
$1,670 |
|
134 |
|
$3,796 |
|
1,706 |
|
Average realized
gold price ($/oz) |
$1,481 |
|
- |
|
$1,481 |
|
- |
|
Total Cash Cost ($/oz)1 |
|
$866 |
|
- |
|
$866 |
|
- |
|
AISC
($/oz)1 |
|
$959 |
|
- |
|
$959 |
|
- |
|
2. Consolidated financial and
operational information for Q4 2019 and 2019 includes the results
from El Limon and La Libertad for the period from October 15, 2019
to December 31, 2019. Prior to October 15, 2019, Calibre was
an exploration stage company with no gold production or gold
sales.
3. Cost of sales includes a write
up of $8.4 million, and consequently a reduction of mine operating
income of the same amount, related to the valuation of metal
inventory acquired on the purchase of the Nicaragua Assets on
October 15, 2019, which was expensed during the period ended
December 31, 2019.
El Limon - Financial Information
El Limon generated revenue of $27.3 million on sales of 18,412
ounces of gold at an average realized gold price of $1,482 per
ounce.
Cost of sales (including depreciation) was $23.6 million.
Included in cost of sales is $5.9 million related to the write-up
of inventory to fair value related to purchase price
accounting. Total Cash Costs1 and AISC1 were $887 and $928
per ounce, respectively, with the Company delivering below its AISC
guidance of between $950 and $990 per ounce. Mine operating
income was $3.7 million and cash flows from operations were $13.2
million.
Capital expenditures were $8.8 million, including $5.7 million
of capitalized stripping at Limon Central Phase 2, $2.0 million of
Veta Nueva underground development and $0.6 million at Limon
Central. In addition, the Company incurred $0.5 million of
exploration expenditures, of which $0.4 million was incurred at
Limon Norte and $0.1 million at other projects.
La Libertad - Financial Information
La Libertad generated revenue of $30.5 million on sales of
20,581 ounces of gold at an average realized gold price of $1,481
per ounce.
Cost of sales (including depreciation) was $20.9 million.
Included in cost of sales is $2.5 million related to the write-up
of inventory to fair value related to purchase price
accounting. Total Cash Costs1 and AISC1 were $847 and $889,
respectively, below guidance of AISC of between $930 and $960 per
ounce. Mine operating income was $9.6 million and cash
flows from operations were $11.3 million.
Capital expenditures were $1.2 million, including $0.5 million
at Jabali open pit and $0.7 million of sustaining capital. In
addition, the Company incurred $1.2 million of exploration
expenditures.
Consolidated Net Income and Adjusted Net
Income1
Net income (loss) per share for the year ended December 31, 2019
was $0.01 (2018: $(0.03)) and for the fourth quarter was $0.01 (Q4
2018: $(0.01)). When adjusting for one-time items, the
Company’s Adjusted net income per share1 for the fourth quarter of
2019 was $0.04, as detailed below:
|
|
|
Adjusted Net Income Reconciliation ($000) |
Q4
2019 |
|
Net income |
$3,130 |
|
Add: Transaction Related Costs
(net of taxation effects) |
|
|
Advisory and legal |
$2,408 |
|
Inventory increases to
“fair value” for Purchase Price Accounting |
$5,881 |
|
Loss on settlement of convertible debenture |
$462 |
|
Adjusted net
income |
$11,881 |
|
Weighted average shares
outstanding (000) |
|
298,742 |
|
|
|
|
Adjusted net income per
share |
$0.04 |
|
Operational Results
The following operational results are for the period beginning
October 15, 2019 until December 31, 2019:
|
|
|
|
Description |
El Limon |
La Libertad |
Consolidated |
Ore Milled (tonnes) |
100,221 |
353,254 |
453,475 |
Ore Milled Grade (g/t Au) |
5.74 |
1.74 |
2.62 |
Recovery (%) |
91.3 |
96.4 |
94.0 |
Gold Production (ounces) |
15,440 |
18,066 |
33,506 |
Gold Sold
(ounces) |
18,412 |
20,581 |
38,993 |
El Limon - Operating Information
Mine production consisted of 65,985 tonnes at an average grade
of 5.39 g/t gold from the Limon Central (“LC”) Phase 1 open-pit and
37,291 tonnes at an average grade of 6.23 g/t gold from the Santa
Pancha underground mine. For 2020, the Company expects to
continue generating its mill feed from the mines at Santa Pancha
and LC Phase 1, with approximately 60% of the mill feed coming from
LC Phase 1.
While mining at LC Phase 1 continues, a large stripping campaign
for LC Phase 2 has been on-going with approximately 3.2 million
tonnes of waste material mined during the period from October 15,
2019 to December 31, 2019. The campaign will continue at LC
Phase 2 with the plan of exposing and milling LC Phase 2 ore in the
second half of 2020. In addition, development of the Veta
Nueva underground mine is ongoing and will continue in 2020.
El Limon achieved gold production of 15,440 ounces driven by an
average mill grade of 5.74 g/t gold and recovery of 91.3% from
100,221 tonnes of ore milled. Total production was within
guidance of between 14,000 and 17,000 ounces (announced on October
21, 2019).
La Libertad - Operating Information
As disclosed on November 21, 2019 and on January 14, 2020,
Calibre suspended blasting activities at its Jabali underground
mine as artisanal mining activities have caused localized ground
instability impacting approximately 20 households, several hundred
metres from the Jabali underground mine. The government is
well advanced with its negotiations, a relocation site has been
identified, preliminary plans and relocation compensation have been
presented, and regular discussions continue. Currently, Calibre
anticipates recommencing operations during the third quarter of
2020.
Despite the hiatus of activities at Jabali underground, La
Libertad achieved gold production of 18,066 ounces, within guidance
of between 17,000 and 20,000 ounces (announced on October 21,
2019), demonstrating the value in having a portfolio of assets.
The majority of La Libertad’s mine production consisted of
71,089 tonnes with an average grade of 3.57 g/t gold from the San
Juan open-pit, 107,756 tonnes with an average grade of 2.14 g/t
gold from the Jabali Antena open-pit, and 167,450 tonnes grading
0.55 g/t gold of heap leach “spent ore”. The material from
Jabali underground mine totaled 3,346 tonnes at 4.24 g/t gold.
During 2019, as part of an ongoing efficiency review, Calibre
idled one of the two ball mills at La Libertad, reducing throughput
to approximately 1.6 million tonnes per annum (from 2.2 million
tonnes per annum), focusing on higher margin production.
With favorable in-country transportation costs, 2.7 million
tonnes of installed annual mill capacity between the two
properties, reliable infrastructure, Calibre we will continue to
evaluate the opportunity to optimize our consolidated mine and
process plans as we look to develop a “hub and spoke” approach to
maximizing value from our combined Nicaraguan asset base.
COMPANY OUTLOOK
2020 Production and Cost Guidance
On December 4, 2019, the Company announced 2020 production and
cost guidance, as outlined below:
|
|
|
|
|
Description |
|
El Limon |
La Libertad |
Consolidated |
Gold Production (oz) |
|
70,000 - 75,000 |
70,000 - 75,000 |
140,000 - 150,000 |
Total Cash Costs
($/oz)(1) |
$740 - $780 |
$930 - $970 |
$840 - $890 |
AISC ($/oz)(1) |
|
$875 - $925 |
$1,050 - $1,100 |
$1,020 - $1,060 |
Growth Capital ($
millions) |
$14 - $16 |
$10 - $12 |
$24 - $28 |
Near-Mine Drilling
($ millions) |
$3 - $4 |
$9 - $10 |
$12 - $14 |
G&A
($ millions) |
|
N/A |
N/A |
$6 - $7 |
The Company expects to invest approximately $13 million to
expand existing resources through near-mine resource delineation
and discovery drilling (heavily focused at La Libertad), and $5
million on development at Pavon. The Company will continue to
advance Pavon, with a planned 10,000 metre drilling program in 2020
while progressing the permitting process, environmental impact
assessment (“EIA”), mine development and mine engineering.
In 2020, the Company expects to continue advancing cost saving
opportunities, as well as optimizing and improving production
efficiencies at El Limon and La Libertad. This will include
managing the mines as integrated operations through implementing
“hub-and-spoke” approach, rather than as stand-alone entities,
reviewing supply chain synergies and optimizing contracted
services. With the focus on higher margin ounces, Calibre
will continue to pursue opportunities to haul higher grade ore
mined from various sources, including Pavon, given the favorable
in-country infrastructure and haulage costs and surplus processing
capacity at the La Libertad mill.
2019 FINANCIAL EARNINGS RESULTS AND CONFERNCE
CALL DETAILS
Management will be hosting a conference call to discuss the 2019
results and outlook for 2020:
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When: Dial-in:Conference
ID: Webcast: |
Wednesday, February 19,
2020 at 10:00am EDT (7:00am PST)Toll-Free
+1 (866) 221-1882 or +1 (470) 495-9179 (International) 4337098The
live webcast can be accessed on Calibre’s website (link here). |
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Replay:Conference
ID: |
The conference call replay will
be accessible for two weeks after the call Toll-Free +1 (855)
859-2056 or +1 (404) 537-3406 (International)4337098 |
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Presentation slides which accompany the conference call can be
accessed at www.calibremining.com under the “Investors and
Presentations” section of the Calibre website (link here).
Qualified Person
Darren Hall, MAusIMM, SVP & Chief Operating Officer, Calibre
Mining Corp. is a “qualified person” as set out under NI 43-101 has
reviewed and approved the scientific and technical information in
this press release.
ON BEHALF OF THE BOARD
“Russell Ball”
Russell BallChief Executive Officer
For further information, please contact:
Ryan King Vice President, Corporate Development
& IR Calibre Mining Corp. T: 604.628.1010 E:
calibre@calibremining.comW: www.calibremining.com
About Calibre Mining Corp.
Calibre Mining is a Canadian-listed gold mining and exploration
company with two 100%-owned operating gold mines in Nicaragua. The
Company is focused on sustainable operating performance and a
disciplined approach to growth.
Cautionary Note Regarding Forward Looking
Information
This news release includes certain “forward-looking information”
and “forward-looking statements” (collectively “forward-looking
statements”) within the meaning of applicable Canadian securities
legislation, including: the Company's projected gold production
from El Limon (the "El Limon Production”); the
Company's projected gold production from La Libertad (the
"La Libertad Production"); and outlook, guidance,
forecasts, or estimates relating to the El Limon Production or the
La Libertad Production. All statements in this news release that
address events or developments that we expect to occur in the
future are forward-looking statements. Forward-looking statements
are statements that are not historical facts and are generally,
although not always, identified by words such as “expect”, “plan”,
“anticipate”, “project”, “target”, “potential”, “schedule”,
“forecast”, “budget”, “estimate”, “intend” or “believe” and similar
expressions or their negative connotations, or that events or
conditions “will”, “would”, “may”, “could”, “should” or “might”
occur. All such forward-looking statements are based on the
opinions and estimates of management as of the date such statements
are made.
Forward-looking statements necessarily involve assumptions,
risks and uncertainties, certain of which are beyond Calibre’s
control, including risks associated with or related to: the
volatility of metal prices; changes in tax laws; the dangers
inherent in exploration, development and mining activities; the
uncertainty of reserve and resource estimates; cost or other
estimates; actual production, development plans and costs differing
materially from the Company's expectations; the ability to obtain
and maintain any necessary permits, consents or authorizations
required for mining activities; the current ongoing instability in
Nicaragua and the ramifications thereof; environmental regulations
or hazards and compliance with complex regulations associated with
mining activities; the availability of financing and debt
activities, including potential restrictions imposed on Calibre’s
operations as a result thereof and the ability to generate
sufficient cash flows; remote operations and the availability of
adequate infrastructure; fluctuations in price and availability of
energy and other inputs necessary for mining operations; shortages
or cost increases in necessary equipment, supplies and labour; the
reliance upon contractors, third parties and joint venture
partners; the dependence on key personnel and the ability to
attract and retain skilled personnel; the risk of an uninsurable or
uninsured loss; adverse climate and weather conditions; litigation
risk; competition with other mining companies; community support
for Calibre’s operations, including risks related to strikes and
the halting of such operations from time to time; finding an
amicable resolution with the households affected by the instability
issues at La Libertad; conflicts with small scale miners; failures
of information systems or information security threats; compliance
with anti-corruption laws, and sanctions or other similar measures.
The list is not exhaustive of the factors that may affect Calibre’s
forward-looking statements.
Calibre’s forward-looking statements are based on the applicable
assumptions and factors management considers reasonable as of the
date hereof, based on the information available to management at
such time. These assumptions and factors include, but are not
limited to, assumptions and factors related to Calibre’s ability to
carry on current and future operations, including: development and
exploration activities; the timing, extent, duration and economic
viability of such operations, including any mineral resources or
reserves identified thereby; the accuracy and reliability of
estimates, projections, forecasts, studies and assessments; the
availability and cost of inputs; the price and market for outputs,
including gold; the timely receipt of necessary approvals or
permits; the ability to meet current and future obligations; the
ability to obtain timely financing on reasonable terms when
required; the current and future social, economic and political
conditions; and other assumptions and factors generally associated
with the mining industry.
Calibre's forward-looking statements are based on the opinions
and estimates of management and reflect their current expectations
regarding future events and operating performance and speak only as
of the date hereof. Calibre does not assume any obligation to
update forward-looking statements if circumstances or management’s
beliefs, expectations or opinions should change other than as
required by applicable securities laws. There can be no assurance
that forward-looking statements will prove to be accurate, and
actual results, performance or achievements could differ materially
from those expressed in, or implied by, these forward-looking
statements. Accordingly, no assurance can be given that any events
anticipated by the forward-looking statements will transpire or
occur, or if any of them do, what benefits or liabilities Calibre
will derive therefrom. For the reasons set forth above, undue
reliance should not be placed on forward-looking statements.
Notes: 1. Non-IFRS Disclosure
The Company believes that investors use certain non-IFRS
measures as indicators to assess gold mining companies,
specifically Total Cash Costs per Ounce and All-In Sustaining Cash
Costs per Ounce. In the gold mining industry, these are common
performance measures but do not have any standardized meaning. The
Company believes that, in addition to conventional measures
prepared in accordance with IFRS, certain investors use this
information to evaluate the Company's performance and ability to
generate cash flow. Accordingly, it is intended to provide
additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS.
Total Cash Costs per Ounce of Gold (“Total Cash Costs”): Total
Cash Costs include mine site operating costs such as mining,
processing and local administrative costs (including stock-based
compensation related to mine operations), royalties, production
taxes, mine standby costs and current inventory write-downs, if
any. Production costs are exclusive of depreciation and
depletion, reclamation, capital and exploration costs. Total
Cash Costs are net of by-product silver sales and are divided by
gold ounces sold to arrive at a per ounce figure. For the
period ended December 31, 2019, Total Cash Costs includes an
adjustment for the purchase price allocation that represents the
impact on production costs of the valuation of metal inventory
acquired with the business combination on the purchase of the El
Limon and La Libertad mines.
All-In Sustaining Costs per Ounce of Gold (“AISC”): AISC
is a performance measure that reflects the expenditures that are
required to produce an ounce of gold from current operations.
While there is no standardized meaning of the measure across the
industry, the Company’s definition is derived from the definition,
as set out by the World Gold Council in its guidance dated June 27,
2013 and November 16, 2018, respectively. The World Gold
Council is a non-regulatory, non-profit organization established in
1987 whose members include global senior mining companies.
The Company believes that this measure is useful to external users
in assessing operating performance and the ability to generate free
cash flow from operations.
Calibre defines AISC as the sum of Total Cash Costs, sustaining
capital (capital required to maintain current operations at
existing production levels), corporate general and administrative
expenses, in-mine exploration expenses, amortization of asset
retirement costs and rehabilitation accretion related to current
operations. AISC excludes capital expenditures for
significant improvements at existing operations deemed to be
expansionary in nature, exploration and evaluation related to
growth projects, rehabilitation accretion not related to current
operations, financing costs, debt repayments, and taxes.
Total AISC is divided by gold ounces sold to arrive at a per ounce
figure. For the period ended December 31, 2019, AISC includes
an adjustment for the purchase price allocation that represents the
impact on production costs of the valuation of metal inventory
acquired with the business combination on the purchase of the El
Limon and La Libertad mines.
Adjusted Net Income (Loss) Per Share: Adjusted net income (loss)
and adjusted net income (loss) per share are non-IFRS measures that
do not have a standardized meaning prescribed by IFRS and therefore
may not be comparable to similar measures presented by other
issuers. The Company defines adjusted net income (loss) as
net income (loss) adjusted for non-recurring and significant
recurring items. The Company defines adjusted income (loss)
per share as adjusted net income divided by the basic weighted
number of common shares outstanding.
Management believes that the presentation of adjusted net income
(loss) and adjusted income (loss) per share is appropriate to
provide additional information to investors regarding items that we
do not expect to continue at the same level in the future or that
management does not believe to be a reflection of the Company’s
ongoing operating performance. Management further believes
that its presentation of these non-IFRS financial measures provide
information that is useful to investors as they are important
indicators of the strength of our operations and the performance of
our core business. Accordingly, it is intended to provide
additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS. Other companies may calculate this measure
differently.
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