Earnings call transcript: Calibre Mining beats Q4 2024 forecasts, stock rises

Calibre Mining Corp (TSX:CXB), with a market capitalization of $1.89 billion, reported its fourth-quarter earnings for 2024, surpassing analyst expectations with an earnings per share (EPS) of $0.05, compared to the forecasted $0.0443. The company also exceeded revenue projections, posting $202.97 million against an expected $200.28 million. Following the earnings report, Calibre Mining’s stock surged by 4.93%, closing at $3.19, reflecting positive investor sentiment. According to InvestingPro data, the stock has delivered an impressive 101% return over the past year, with momentum indicators suggesting overbought conditions.

Key Takeaways

• Calibre Mining’s EPS and revenue both surpassed expectations for Q4 2024.
• The stock price increased by 4.93% after the earnings announcement.
• Record gold prices and increased production contributed to strong financial results.
• The Valentine Project is on track, with first gold production expected in Q2 2025.
• The company maintains a strong cash position, with $161 million reported.

Company Performance

Calibre Mining demonstrated robust performance in Q4 2024, driven by record gold prices and increased production capabilities. The company reported a record production of 76,000 ounces for the quarter and a total of 242,000 ounces for the year. This marks a significant achievement, as production was 15% above budget in early 2025. With an EBITDA of $202.54 million and a gross profit margin of 42.75%, the company’s operational efficiency remains strong. The company is also benefiting from a strengthened cash position, which increased by $30 million since the year-end, reaching $161 million by mid-February. InvestingPro analysis reveals 12 additional key insights about Calibre Mining’s financial health and growth prospects.

Financial Highlights

• Revenue: $202.97 million, exceeding the forecast of $200.28 million.
• Earnings per share: $0.05, above the expected $0.0443.
• Cash position: $161 million as of mid-February 2025, up by $30 million since year-end.
• Record production of 76,000 ounces in Q4 2024.

Earnings vs. Forecast

Calibre Mining’s Q4 2024 EPS of $0.05 surpassed the forecasted $0.0443 by approximately 12.8%. The revenue of $202.97 million also exceeded expectations, representing a positive surprise of 1.3%. This performance reflects the company’s effective management and the favorable market conditions in the gold sector.

Market Reaction

Following the earnings announcement, Calibre Mining’s stock price rose by 4.93%, closing at $3.19. This increase positions the stock closer to its 52-week high of $3.27, signaling strong investor confidence. The positive market reaction is attributed to the company’s ability to surpass earnings expectations and maintain a strong financial outlook.

Outlook & Guidance

Looking ahead, Calibre Mining has set a production guidance of 230,000 to 280,000 ounces for 2025, excluding contributions from the Valentine Project. The company is also planning a 200,000-meter drilling program and aims to reach an annual production of 2.5 million tonnes by year-end. The potential Phase II expansion could further increase throughput to over 5 million tonnes per year. Analysts tracked by InvestingPro expect significant sales growth this year, with EPS forecasts for 2025 at $0.17. For detailed analysis and comprehensive valuation metrics, investors can access the exclusive Pro Research Report, available for over 1,400 top stocks including Calibre Mining.

Executive Commentary

"We see great opportunity to improve on the existing resource base," stated Darren Hall, CEO. He emphasized the strategic importance of the Valentine Project, highlighting its potential as a generational asset. Tom, the Exploration Executive, noted the significant reserves at the Leprechaun site, containing approximately 800,000 ounces.

Risks and Challenges

• Potential delays in the Valentine Project could affect future production timelines.
• Fluctuations in gold prices may impact revenue and profitability.
• Exploration and expansion activities carry inherent operational risks.
• The company’s capital structure may be affected by refinancing options for the Sprott loan facility.

Q&A

During the earnings call, analysts focused on the ramp-up and production expectations for the Valentine Project. Questions also addressed the potential Phase II expansion and exploration prospects at the Frank Zone. Executives clarified the company’s financial position and provided insights into the ongoing refinancing discussions for the Sprott loan facility.

Full transcript - Calibre Mining Corp (CXB) Q4 2024:

Darren Hall, CEO/Executive, Calibre Mining: morning, and thank you for taking the time to join us this morning. Firstly, I would like to thank our employees and business partners for their continued commitment to safe and responsible operations. This commitment is demonstrated not only by a 20% reduction in our lost time injury frequency rate year over year, but delivering record production of 76,000 ounces in Q4 and 242,000 ounces for the full year, exceeding the upper end of our production guidance. This strong operating performance has continued into 2025 with consolidated production 15 of budget and cash increased 23% to $161,000,000 as of mid February. Additionally, Dave Schumer and the Nicaraguan team continue to identify operational efficiencies to drive further improvements in Nicaragua.

The Valantine feasibility study forecast an average 195,000 ounces per year for the first twelve years. With the build on budget and first gold expected in Q2, I anticipate 2025 production to be between 50,000 to 100,000 ounces. This would be in addition to our pre Valentine production guidance of 230,000 to 280,000 ounces. In addition to delivering Atlantic Canada’s largest gold mine, 2025 will be a noteworthy year for exploration with a 200,000 meter company wide drilling program the largest in Calibre’s history. In particular, the exciting discovery drilling at Ballantine’s Frankzone and El Limon’s Vitam Gold Corridor have the potential to meaningfully increase our mineral resources.

Moving to Slide 4 and Ballentine. During 2024, we attracted a very capable operating team at Ballentine, which has considerable commissioning experience, who are working with Reliable Controls Corporation to oversee pre commissioning and commissioning to ensure a seamless transition from construction to operations. Ballantyne Construction is on track with notable progress including the primary pressure is ahead of schedule and ready for commissioning, mill margins to be set within the week and substantively complete by month end, structural steel installation is at 91%, CIL tank piping on target for completion early March cable installation is set for completion in March reclaimed tunnel steel and apron feeders are progressing and on track for commissioning in April And finally, the ADR plant and gravity circuit are nearing mechanical completion and ready for turnover. We have made substantial progress on technical studies to increase Valentine’s throughput in a Phase II expansion. While the feasibility envisaged an increase in throughput from 2,500,000 tonnes per year to 4,000,000 tonnes per year starting in 2029, we are now actively advancing plans to accelerate the timeline for scaling our production to in excess of 5,000,000 tonnes per year.

We have commenced program management activities and on track to award detailed engineering in March with the intent of committing to long lead times before year end. Given the strong exploration upside at Valentine, our approach positions us well for long term growth and value creation. Turning to Slide 5. Ballantyne offers an impressive 5,000,000 ounce resource base from which to grow both near mine and the numerous exploration opportunities which exist across the property. Oil control drilling has confirmed grade and added 29% more tonnes at the Leprechaun Pit, resulting in a 30% increase in gold compared to the twenty twenty two minuteeral reserve.

Importantly, the grade distribution indicates that applying a higher cutoff will result in the potential to process higher grades material for longer. Similarly, ore control drilling at the Marathon Pit yielded 47% higher gold grades, resulting in 44% additional ounces over the 2022 Minuteeral Reserve for the same tonnage. Discovery (NASDAQ:WBD) drilling at the Frank Zone, located one kilometer southwest of reported mineral resources, continues to return significant broad intervals of gold mineralization. Importantly, recent drilling has now traced mineralization to surface, highlighting the potential for another open pit. Initial drill intercepts include 172 meters grading 2.4 grams, 2.12 grams over 95 meters, 2.26 grams over 78 meters and 3.08 grams of 48 meters.

These new intercepts geologically align with ore from the Maracone, Berry and Leprechaun open pits. While exploration of the Frank zone is still in its early stages, current data indicates that the zone remains open to the Southwest and to the North and now has been traced for over 1,000 meters along strike into a depth of approximately 500 meters. Historically, drilling at Ballantyne is mainly focused on a small portion of the 32 kilometer Ballantine Lake share zone. This structure remains highly prospective to discourage additional gold resources and represents only a small fraction of the broader two fifty square kilometer land package. Moving to Slide six.

With record gold prices, consistent operating performance, exciting exploration results and Ballantyne on track to deliver first gold in Q2, which will diversify our production profile and unlock peer leading production growth, I’m confident that we’ll continue delivering superior value and provide a compelling re rate opportunity for all shareholders. With that, we’re happy to take questions. I’ll now pass it back to the operator.

Conference Operator: Yes. Thank you. We will now begin the question and answer session. And the first question comes from Francisco Costanza with Scotiabank (TSX:BNS).

Francesco, Analyst, Scotiabank: Hi, there. This is Francesco calling on behalf of Ophi Sabib. Good morning, Darren and team. Just want to start by saying congrats on the earnings beat this quarter. Maybe I’ll start with the Valentine project.

Darren, could you just reiterate briefly that sort of production outlook you gave for Valentine for this year?

Darren Hall, CEO/Executive, Calibre Mining: Yes, Francisco. Thanks for joining the call this morning and your continued support. Yes, if we look at balance line in the feasibility study, it had been foreshadowed for 195,000 ounces a year for the first twelve years of production. Given where we’re looking to first gold in Q2 and we think of it as a ramp up here, it’s reasonable to expect that that 50,000 to 100,000 ounces of production in 2025 is a reasonable place to start to create expectations around.

Francesco, Analyst, Scotiabank: For sure. And so given that production outlook, when do you think that implies that you’d be reaching commercial production and then nameplate capacity at the mine?

Darren Hall, CEO/Executive, Calibre Mining: Yes. I kind of stay away from terms like nameplate and commercial production because I find them as the cool neat things that people refer to. But what our focus is this year is safely delivering the asset and then ramping up production to be at an annualized rate of around 2,500,000 ton by the end of the year. And if we want to call that nameplate, let’s call it nameplate at 2,500,000 tonnes. But I think as we’ve discussed before, the rate determining step in the current design is milling capacity.

And the milling capacity, given the power studies we’ve done, has an implicit through rate of about 3,000,000 tonnes a year. So again, at 2,500,000 tonnes, we still see opportunity for growth beyond that, but we’re targeting to be at 2,500,000 tonnes by the end of the year.

Francesco, Analyst, Scotiabank: Yes, that’s great. I think that’s helpful. Maybe just on the planned mill expansion. So given that you’re progressing detailed engineering for an expansion over the prior feasibility studies expansion, When do you think you would be looking to release a new technical report that could outline the cost and timeline associated with that?

Darren Hall, CEO/Executive, Calibre Mining: No, and we’ve commenced the work this year to do the detailed engineering to get us to a more definitive estimate in terms of timelines and costs for that. I think we’ll be in a position around that July timeframe to make commitments into the next stage of work. But in terms of a technical report, the next formal technical report would be after the end of this year. But I think that for Ballantine as a whole, but in terms of being able to provide more clarity, I’d say it’s in kind of late Q2, so maybe associated with our Q2 results.

Francesco, Analyst, Scotiabank: Okay. Thank you. And then I just want to ask one final question on the Sprott loan facility, given that it’s almost fully drawn. Could you speak to what the best available options for refinancing that facility are? And maybe when you would explore refinancing, if it would be at the next available opportunity or maybe later on, perhaps in ’twenty six when you get to a point where you can refinance penalty free?

Darren Hall, CEO/Executive, Calibre Mining: Yes. No, I’ll pass over to Daniella for any kind of more granularity in around the Sprott facility. But under the ARCA, we have the ability at the end of this year to refinance that facility. As we progress through this year, we’ll investigate what our best structure is around balance sheet and how best to be able to use funds that are available to us. So, no, I think it’s early to be able to commit to how we’re going to go about that.

But I think that given our balance sheet strength, given our production growth and the cash flow that we’re going to see from our combined assets over the next couple of years, I think we’re going to have a plethora of opportunities and choices in and around strengthening the balance sheet and looking at how best to position ourselves with that debt. I mean, Daniella, is there anything you’d like to offer?

Daniella, Financial Executive, Calibre Mining: That’s exactly what I was going to say, Darren. There’s certainly available capital for us. And as we get into the second half, we’ll be looking and balancing flexibility in the balance sheet, cost of capital and the capital allocation to Phase II. And one other comment around the Sprott debt. The debt was fully drawn in 2022.

And the reason why you’re seeing continued increases in that balance is because 75% of the interest gets capitalized to the loan quarterly until middle of this year, and that’s when our payments start. So that loan is fully drawn. We’ve got $25,000,000 remaining in our escrow account. We will see that come out in the first quarter and our payments will start in the second half of the year.

Francesco, Analyst, Scotiabank: Yes. No, that’s helpful. I guess I should have said from the debt proceeds account. But yes, thanks very much for your answer.

Darren Hall, CEO/Executive, Calibre Mining: Thanks, Francisco.

Conference Operator: Thank you. And the next question comes from Don DeMarco with National Bank Financial.

Don DeMarco, Analyst, National Bank Financial: Thank you, operator, and good morning, Darren and team. So Darren, my first question is on Phase II. And great to hear that work is advancing. We’ll look forward to details on costs and so on. I’m just wondering though about is it contingent on any assumptions on a ramp up of mining rates or perhaps exploration success in order to provide a bigger resource to sustain that higher throughput that you envision?

Any color on that would be appreciated. Thank you.

Darren Hall, CEO/Executive, Calibre Mining: Yes, no, thanks, Tom. And again, it’s without just sort of getting into a lot of detail in around the feasibility study, it is important to note that within the feasibility study, because it was a bankable document that Marathon had put in place to be able to raise funding, it could only value 2P or their end reserves. And within that, there’s 2,700,000 ounces of reserves within a 5,100,000 ounce resource base. So it’s just a little bit over 50% of the metal was considered in that plan. So within that plan, it defined, I think it was a fourteen year life.

And within that life, it actually built stockpiles early in life. When we look at that incremental capacity associated with Phase II, all we’ve done to be able to substantiate it is actually to draw those stockpiles sooner. We haven’t yet looked at the opportunities to accelerate mining, resequencing pits, not only for with what’s in the reserve, but also to include the material that’s resourced because we won’t need a bankable document per se. We can value resources and look at how that would contribute to the mine plan. So, we see great opportunity to improve on the existing resource base without adding to resources from what we’ve seen from the Lepericorn infill drilling, from the extensions to the Southwest and now for the material discovery we see there at the Frank site.

Don DeMarco, Analyst, National Bank Financial: And on mining rates, what’s your projection for ramp up of mining rates to be able to accommodate a higher throughput, perhaps a couple of years down the road?

Darren Hall, CEO/Executive, Calibre Mining: I think that in part is part of that question. Is there an opportunity to be able to mine faster to be able to further improve the economics associated with that. And that’s something we can look at. But what we saw was from the initial phase to go from what was the original defined Phase II, so from 2,500,000.0 to 4,000,000 tonne to increase that to 5 plus we saw a payback in less than a year from going from 4,000,000 to 5,000,000. So, mining rates can be flexed and we’ll continue to see significant opportunity to substantially improve the economics associated with that expansion.

Don DeMarco, Analyst, National Bank Financial: Okay. Thank you. And final question, it’s encouraging to see the recent drill results from the Franc zone. Could you walk us through I recognize it’s still early, but provide some timelines for your continued exploration plans there and when we might see something on the order of a technical report or to get some idea of resource or technical order other milestones?

Darren Hall, CEO/Executive, Calibre Mining: Yes. No, I’ll kind of make some comment and then pass it over to Tom to see if there’s anything additional he would lay But from a technical report perspective, I mean, we’re in no great rush to put out a revised technical report. I mean, our focus at Valentine this year is to safely and responsible deliver the product in parallel, run the detailed engineering on Phase II and continued exploration. And the focus for the exploration is less about converting resources to reserves or extensional drilling to existing resources, even though we see great upside for that. It’s really about understanding having a better understanding of what the scope is for Valentine as a whole.

As I kind of alluded to, we’ve only touched a small portion of what is a highly prospective two fifty square kilometer land package. And within that, with the Valentine Lake share zone, which is a subset of that, we’ve only touched six to eight kilometers of the 32 kilometer share zone. So I think what we’re doing right now is getting our kind of hands around the tail of the beast in terms of what this is likely to look like as a generational asset as we discover as we uncover the kind of the next mining camp. So yes, probably avoided the question of specifically in terms of timing of tech reports, but I don’t think we’ll see anything in the next twelve months. I mean, Tom, is there anything you want to layer on that?

Tom, Exploration Executive, Calibre Mining: Yes. No, I would echo that Darren. We’re just in the process, Don, of really kind of getting our hands around what’s going on with Frank. Just and we only spoke about Frank. We’re also drilling in a couple of other areas.

If you look at Frank and its footprint right now, Darren talked about a kilometer, greater than a kilometer. I mean, if you go from the true sort of corner of where it’s been drilled at surface to the corner of the leprechaun, you’re talking about about a kilometer and a half. And if you look at Leprechaun itself, mineral logically identical, Leprechaun is about a 700 meter strike length and it contains about 800,000 ounces in reserves. You guys can can check my math in the background. But if you kind of look at what leprechaun is at 800,000 ounces of reserve, you’re looking at effectively double the strike length potential at Frank now.

Not saying that that’s entirely mineralized, but that’s kind of what we’re looking to identify here. So So to echo Darren, we would be pretty remiss to put out something from a technical report perspective until we’ve fully captured what we see to be the potential at Frank to the Southwest. Also Sprite to the Northeast Of Leprechaun, those who follow the story for a while may recall, there’s a small inferred resource in and around Sprite very tight to the Valentine Lake share. We’re doing some exploration drilling in and around there to the Northeast Of Leprechaun. And we’ll hopefully be able to update the market soon with some interesting visual results that we’ve seen waiting for assays.

But you’re starting to talk about meaningfully expanding that mineralized footprint just in the Southwest corner of the property, let alone further afield. So I’d echo Darren and say, I wouldn’t expect a technical report in the next twelve months. If we can appropriately capture what we view to be the potential at Frank, then we’d start to look at incorporating that in a new resource reserve update, which would capture some of the stuff from Phase two as well.

Conference Operator: Thank you. And the next question comes from Alex Cerentia from Ventum Financial.

Alex Cerentia, Analyst, Ventum Financial: Just a couple of questions for me. First, just on Nicaragua, this is kind of a multi party one here. Do you expect there to be any sort of seasonality with production from that unit this year? And then also your comments and your press release about production being 15% higher year to date, is that grade or tons driven? I’m just trying to get a sense of how sustainable is that?

I mean, your guidance for the year is February to 250,000 ounces for Nicaragua, so kind of a wide range. I’m just trying to narrow that down a bit.

Darren Hall, CEO/Executive, Calibre Mining: Yes. Hi, Alex, and thanks for the questions. From a seasonality perspective, the production this year is not driven from those impacts. There are no seasonal variations we see in production forecasting. What we are seeing is a very favorable start to the year from a productivity and performance perspective, which is driven which manifests itself both in tonnes and in grade, primarily from Limon, which is processed at Limon and Libertad.

No, we’re confident in our provided guidance range of two thirty to two eighty for the full year. I think it was as much as anything to be able to foreshadow that we had a strong finish to 2024 and that’s continuing into 2025. And as we progress through the year, we’ll provide updates as reasonable.

Alex Cerentia, Analyst, Ventum Financial: Okay. That’s good to hear. The second question, just on the financial side, your cash went up $30,000,000 since year end. I guess it’s a little bit surprising given you’re still in the build phase and you have got some spending still left on Valentine. But I’m guessing or wondering that that bump in cash, is that really just more a timing of spending and maybe some adjustments on the working capital front?

Darren Hall, CEO/Executive, Calibre Mining: Yes. I think in simple terms, I think it is. I mean, again, there’s a number of things that happened during the quarter, but it’s not reflective of spend per se. This is more just to highlight the strength of the financial position we’re in and that Caliber is well positioned to fully fund the initial project capital at Ballantyne. And again, we are seeing volume metal prices, which everyone’s participating in at this point as well, which is nice.

Alex Cerentia, Analyst, Ventum Financial: Yes, those are definitely helping.

Darren Hall, CEO/Executive, Calibre Mining: Yes, for sure, Budd.

Conference Operator: That’s it

Alex Cerentia, Analyst, Ventum Financial: for me. Thanks.

Darren Hall, CEO/Executive, Calibre Mining: Thank you very much.

Conference Operator: Thank you. And as there are no more questions, I would like to

Tom, Exploration Executive, Calibre Mining: turn the floor to Darren Hall for any closing comments.

Darren Hall, CEO/Executive, Calibre Mining: Thank you, operator. I’d just like to thank all our shareholders for their continued support and everyone’s participation on the call this morning and questions. As always, Ryan and I and their leadership team are available if you have any further questions. And at that point, take care, be well and have a great day. Back to you, operator.

Conference Operator: Thank you. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines.

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