Calibre Mining (TSX: CXB) - I got big money callin' I'm just tryna play it smart

Interview with Ryan King, VP, Corporate Development of gold developer, Calibre Mining Corp. (TSX:CXB)

There are plenty of exciting stories in the gold space right now, but this one is up there for us.

Calibre Mining is a TSX-listed 10-year gold explorer that has recently turned producer. The team at Calibre Mining arrived from Newmarket Gold, acquiring 2 Nicaraguan assets from gold major, B2Gold: El Limon, and La Libertad. The company has just announced its Q1/20 results and they are strong, with solid grades and plenty of cash flow.

At the beginning of 2020, Calibre Mining announced its guidance for the year was 140,000-150,000oz gold production, at an AISC US$1,000/oz figure.

Why did the company shift from long-term explorer to full-speed ahead producer? From years spent assessing and scrutinising gold assets, the management team came to a realisation: if they could obtain the right "suite" of assets, with good geological upside/potential, the right timing, and at the right price, they could make investors a lot of money.

When the gold market was in a downcycle, B2Gold moved it focus away from El Limon and La Libertad to focus on other advanced gold projects. These assets became non-core, and Calibre Mining was able to pounce on the opportunity. In 2018, after share price stagnation, the company decided to pivot away from its exploration past to replicate the management team's success at Newmont Gold. The company set about attempting to buy producing assets. It did a 10:1 consolidation, conducted a small raise of C$5M (largely from the board). Around 1-year later, Calibre Mining announced its intention to buy the duo of assets, in addition to a C$105M financing. The fact that Calibre Mining was successful, especially considering gold was in a down cycle at the time, is mightily impressive. The company paid US$40M in cash to B2Gold along with US$40M in shares. B2Gold now holds 34% of Calibre Mining. There is one remaining payment of US$15M due in April 2021. This is the only debt. Looks like a strong balance sheet. Calibre Mining has added two producing gold mines to its list of gold exploration assets. It looks like a great portfolio.

So, how is Nicaragua as a mining jurisdiction? King admits it's not well known, but he has good relationship with the Nicaraguan ministries of labour, mine and transport due to pre-existing relationships. King states that c. 98% of his workforce is comprised of locals. King speaks highly of Nicaragua's mining code. Mining is key to the country's economy.

King has managed to transform the two assets into something much more impressive than they used to be. How? King has capitalised on the excellent infrastructure (particularly roads) and power services of Nicaragua. The two processing facilities have around 250-300km between them, but there are multiple ore sources spread around Limon, Libertad and Pavon. These ore sources combine with a total of 2.7Mt of installed capacity to create a cohesive, efficient model that allows Calibre to shift and move ores to where they will be most efficiently processed. This was reflected in the Q1 results: 20% of the Libertad Processing Facility's metal production came from sources that aren't on the Libertad property. King states he is proving the concept he set out with, and this has been reflected in an exponentially rising share price. From C$0.54 in mid-march, it has shot up to C$1.09 in just over a month. The market has latched onto the value proposition King is offering.

It appears Calibre Mining has managed to piece together some quite ordinary assets and is processing them in an incredibly efficient and intelligent fashion. Equinox Gold springs to mind. King states that investors are buying into increasing grades, which could have a transformative impact on economics. The company has US$43M of cash.

What did you make of Ryan King? Comment below: we will respond.

And a FREE 'Not A Mug' Crux Investor mug to the first person to guess the song name and artist featured in the title of this video! (One mug per person).

00:00 - Introduction
2:05 - Company Overview
2:47 - Transition from Explorer to Producer: How and Why?
7:09 - Business Plan and Corporate Structures
11:09 - Telling it Right: Share Price and Interaction with the Market
17:29 - Value for Money: Can They Keep it Going?
20:41 - Impact of COVID-19 and Measures Taken
22:41 - Nicaragua as Mining Jurisdiction
26:43 - The Bigger Picture: Targetting and Monetising the Assets
34:49 - The End Goal for Calibre Mining
37:08 - Cash Position and Possibilities at Hand

Company page: https://www.calibremining.com/

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