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Calibre Mining Q3 Earnings: Cash Cow Junior Producer Just Hitting Its Stride

Calibre Mining, after suspending mining operations due to CV19, returned to steady-state production in July. Both operations, The company outperformed during the quarter with production of 22.26k oz. Au with all-in sustaining costs (AISC) of $902/oz. at Libertad and 22k oz. Au with AISC of $934/oz. at Limon. 

Calibre, on the back of 44.84k oz. Au sold during the quarter, generated $46m in operating cash flow (OCF) and $30m in free cash flow (FCF). Due to the outperformance in Q3, Calibre revised its full year guidance upward; increasing production estimates from 110-125k oz. Au to 125-130k oz. Au and decreasing costs from AISC of $1,070-$1,100/oz. Au to AISC of $1,050-$1,070/oz. Au. The company ended the quarter with $55.7m of cash on hand despite paying down its $15.5m debt owed to B2Gold as part of its acquisition payment, a significant increase relative to the end of Q2 when its cash position stood at $30.6m. 

The company achieved several milestones during the quarter; paying down its final acquisition related payment to B2Gold of $15.5m, acquiring the remaining 70% interest in the Eastern Borosi Project from IAMGOLD [700k oz. Au and 11.3m oz. Ag (Inferred)] and likely to be a big "spoke' in its hub and spoke strategy, reported high-grade drill results from Panteon including 4.8m @ 149.4 g/t Au, received final permit for Pavon Norte open-pit, with initial deliveries to the Libertad mill beginning in Q1 2021. The company also released multi-year guidance for both Libertad and Limon, though in our opinion will prove conservative, perhaps considerably. We should expect continued exploration results from its ongoing 80,000 meter infill, resource expansion and discovery drilling program with 14 active drill rigs. 

In Gold Seeker's November monthly newsletter (@ GoldSeeker.com, we compiled 12 junior producers, analyzing each company on a qualitative and quantitative basis ~ relative valuation: P/NAV and EV/2021 & 2023 OCF), with Calibre finishing near the top regarding best values. We've also posted an in-depth company report on the company.  

GoldSeek's team members hold a position in Calibre Mining and the company is a website sponsor.

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