Earnings call transcript: Calibre Mining Q1 2025 beats EPS estimates, shares dip

Calibre Mining Corp reported first-quarter 2025 earnings that exceeded analysts’ expectations, with an earnings per share (EPS) of $0.05 compared to the forecasted $0.0369. The company’s revenue also surpassed projections, reaching $202.62 million against an anticipated $197.25 million. Despite these positive results, Calibre’s stock fell by 10.03% in after-hours trading, closing at $2.96, down from its previous close of $3.29. According to InvestingPro data, the company has shown impressive momentum with a 53% year-to-date return and maintains a "GOOD" overall financial health score of 2.85 out of 5.

Key Takeaways

• Calibre Mining’s Q1 2025 EPS of $0.05 beat expectations by 35.5%.
• Revenue of $202.62 million surpassed forecasts by 2.7%.
• Stock declined by 10.03% following the earnings announcement.
• Production costs were below budget, supporting operational efficiency.
• The company remains on track to meet its 2025 production guidance.

Company Performance

Calibre Mining demonstrated robust operational performance in the first quarter of 2025, producing 71,000 ounces of gold while keeping production costs under budget. The company is on course to achieve its annual production target of 230,000 to 280,000 ounces. With a gross profit margin of 42.75% and EBITDA of $209.6 million in the last twelve months, the company shows strong operational efficiency. InvestingPro analysis reveals 12 additional key insights about Calibre’s performance and potential, available to subscribers. The recent merger with Equinox Gold positions Calibre as Canada’s second-largest gold producer, with the potential to exceed 1.2 million ounces annually once Greenstone and Ballantyne mines reach full capacity.

Financial Highlights

• Revenue: $202.62 million, exceeding forecasts by 2.7%.
• Earnings per share: $0.05, beating estimates by 35.5%.
• Production: 71,000 ounces of gold.
• Project capital increase for the Valentine Project by CAD $110 million.

Earnings vs. Forecast

Calibre Mining’s actual EPS of $0.05 exceeded the forecast of $0.0369, representing a surprise percentage of approximately 35.5%. This marks a positive deviation from expectations, reflecting the company’s ability to manage costs and enhance production efficiency.

Market Reaction

Despite the earnings beat, Calibre’s stock fell by 10.03% in after-hours trading, closing at $2.96. This decline contrasts with the broader market trends and might indicate investor concerns over increased project capital expenditures and future profitability.

Outlook & Guidance

Calibre Mining anticipates reaching nameplate production in Q1 2026, with continued emphasis on local hiring and community development. The company remains optimistic about its growth prospects post-merger, expecting a substantial equity rerating. Analysts share this optimism, with InvestingPro data showing two recent upward earnings revisions and a consensus recommendation of 1.67 (where 1 is Strong Buy). The company’s five-year revenue CAGR of 59% underscores its strong growth trajectory.

Executive Commentary

CEO Darren Hall expressed enthusiasm for the company’s exploration efforts, stating, "We’re excited about the recent discovery drilling at Ballantyne’s Frank Zone." He also highlighted the merger’s potential, noting, "This merger presents significant opportunity to unlock the value of the combined asset base."

Risks and Challenges

• Increased capital expenditures could pressure future profitability.
• The timeline for project completion has been extended, potentially affecting cash flow.
• Market volatility and gold price fluctuations may impact revenue.
• Integration risks post-merger could affect operational efficiency.

Q&A

During the earnings call, analysts inquired about the capital expenditure increase and operational readiness. CEO Darren Hall assured stakeholders of the company’s preparedness and reiterated their commitment to reaching steady-state production by Q1 2026.

Full transcript - Calibre Mining Corp (CXB) Q1 2025:

Conference Operator: Good day, and welcome to the Caliber Mining Corp Q1 twenty twenty five Conference Call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star Please note this event is being recorded.

I would now like to turn the conference over to Ryan King. Please go ahead.

Ryan King, Unnamed Executive (Likely Investor Relations), Caliber Mining Corp: 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 two. 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.

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 our first quarter and year end MD and A and consolidated financial statements available on our website as well as on SEDAR plus And finally, all figures are in US dollars unless otherwise stated. Present today with me on the call are Darren Hall, president and chief executive officer David Schumer, SVP and chief operating officer Daniella Dimitrov, SVP and Chief Financial Officer and Tom Gallo, Senior Vice President Growth. We will be providing comments on our first quarter twenty twenty five production and cost results and an update on the Ballantyne Gold Mine, after which we will take questions. The slide deck we will be referencing is available on our website at calibrmining.com under the Events section. You can also click on the webcast to join the live presentation.

And with that, I’ll turn the call over to Darren.

Darren Hall, President and Chief Executive Officer, Caliber Mining Corp: Thanks, Ryan. Moving to slide three. Good morning, and thank you for joining the call. I’d like to thank our employees and business partners for their continued commitment to quality performance, which was demonstrated by another quarter with no significant community issues, no material environmental events, and a lost time injury frequency rate of less than zero point six five events per million exposure hours. Before getting into the quarter, I would like to thank Calibre shareholders for approving the merger with Equinox Gold.

Through an enhanced scale, a diversified asset base, a new high quality Canadian production, this merger is well positioned to deliver greater value than either company could have achieved independently. I value the confidence you placed in the team, and we remain committed to operational excellence and execution as we take this next strategic step in value creation. Q1 marked a strong start to the year delivering 71,000 ounces of gold at below budget costs, positioning the company well to achieve the upper end of 2025 production guidance of 230,000 to 280,000 ounces before any production from Ballantyne. In addition to delivering Ballantyne, Atlantic Canada’s largest gold mine, this will be noteworthy for exploration with a 200,000 meter company wide drilling program underway, the largest in Calabar’s history. We’re excited about the recent discovery drilling at Ballantyne’s Frank Zone and continued success at Limon’s VTEM corridor, which both have the potential to meaningfully increase mineral resources.

Moving to Slide 4 and Valentine. I appreciate the efforts and dedication of the entire team in responsibly progressing Valentine as it enters its final stages of construction. However, it hasn’t been without challenges, with first gold now expected by the end of Q3. The delay was due to lower than planned productivity and minus scope growth, which has resulted in a $110,000,000 Canadian increase to the initial project capital since our October 2024 update of $744,000,000 70 5 percent of the capital increase is attributable to the schedule extension and 25% related to scope, growth and quantity. It is important to note that as at the April, initial project capital remains fully funded with $280,000,000 Canadian in cash and $101,000,000 Canadian remaining to be incurred.

Accommodation of factors, can be simplified to lower than planned productivity, is the reason for the delay and resulting increase. Firstly, approximately 75% of the increase is related to labor and indirect costs associated with performance of our two primary contractors resulting in schedule slip. Our commitment to our provincial benefits agreements obligates a company to develop local partnerships and employ locally. While this has long term benefits for the region and for Caliber as we move into operations, it has been problematic in completing specialized mechanical and electrical aspects of the build which require specific skills for relatively short durations. Our commitment to the local benefits agreements and not hiring off island required us to provide additional oversight and more critically training.

This has been particularly evident where teams transitioned from what were traditional scopes such as high voltage power line work to more complex industrial systems. This resulted in lower than planned productivity factors, and therefore increased numbers which were not adequately reflected in our October estimates. The balance of the increase relates to unidentified scope items and incomplete design packages. For example, scope growth occurred in small bore piping, electrical caving, and some instrumentation, all of which added time and cost. However, without the productivity issues, I believe the scope changes would have been adequately covered within the previously allowed contingency.

To ensure we deliver our Q3 commitments, we have taken specific actions, not the least of including productivity factors, revised productivity factors into the schedule and timing and costs, but importantly strengthened contractor oversight and embedded experienced personnel directly into critical scopes, and increased capacity within our owners team including the addition of Pierre Lagare, a seasoned construction professional as project director specifically focused on the process plant to contract manage the final scopes of work. With mass construction materially complete, the focus is on final electrical, piping and instrumentation activities within the plant. The primary crusher has been commissioned with the core source stockpile building well underway and ready to receive material by the May. The revised timeline allows additional time for completion of critical system installations and delivery of efficient commissioning process which positions us well for a successful ramp up and long term strong operational performance. We’ve successfully completed Ballantyne Mine and mill staffing in preparation for commissioning and ramp up activities.

Importantly, key roles all have commissioning experience, which is critical to a smooth ramp up and long term performance. Commissioning activities are progressing well, including no load motor runs and control system validations. All conveyors have been belted and ready for operation. The system is ready for water introduction to commence plant commissioning. The control room team is working through finalized control narratives and conducting phantom simulations to enhance confidence in proper plant sequencing, preliminary testing indicates that all systems are communicating effectively with vendor supplied controls.

All in SAG mills and motors have been turned over to commissioning team for start up activities, and the primary crusher has been commissioned and is ready to crush and deliver rock to the coarse ore stockpile which we anticipate in the next month. Moving to slide six. While mining has specifically focused on delivering waste for construction, we have over 400,000 tonnes of mill ore stockpile which will grow materially through the next quarter. These final steps position us well for safe and efficient transition to first ore and full operations. Moving to slide seven.

With a vote in favour, Calibre and Equinox will merge to create Canada’s Second largest gold producing company with a diversified Americas portfolio anchored by two high quality long life Canadian gold mines. This strategic consolidation of companies will focus on operational excellence and execution generating greater shareholder value collectively than either company could have independently delivered. New Equinox Gold has the potential to produce over 1,200,000 ounces of gold annually when the Greenstone mine and Ballantyne mine are operating at capacity. This merger presents significant opportunity to unlock the value of the combined asset base potentially leading to a substantial equity rerating. I look forward to working with the combined team to continue our track record of superior execution and delivering on our commitments.

With that, we’re happy to take questions. I’ll pass it back to the operator.

Conference Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster.

Again, if you have a question, please press star then 1. Okay. Our first question comes from Ingrid Rico of Stifel. Go ahead, please.

Ingrid Rico, Analyst, Stifel: Hi. Good morning, Darren and team. Darren, I wanted to touch on the CapEx increase and perhaps I know that guidance for operating costs and additional capital post First Gold is going to be announced in Q3. But just to put some context on the additional CapEx and whether this is already capturing some of the capital that would be expected post First Gold. And if anything, just some indication of what that additional capital post first gold could be for Valentine.

Darren Hall, President and Chief Executive Officer, Caliber Mining Corp: Yeah. Thanks, Ingrid, and appreciate the support and the questions. If we look at this revised estimate, we’re confident in this estimate. I mean, we’ve worked through the issues over the last quarter. We provided the update in October, and it was in October we had made the changes that we had identified at the time, but we had failed to recognize the significance of the productivity factors associated with the local hire with respect to the construction team.

That has been recognized, has been addressed, and over the last month or so we’ve worked through with unions, the vendors, the suppliers, and more importantly, the regulators and the communities to get to a solution we feel comfortable in between now and the end of the quarter. As a consequence of that scheduled delay, right, a lot of the costs that would have been in post initial capital are now within the period because all of the majority of the spend in terms of operating folks, the camps, and those sort of things are now all captured even with that. So vicariously we actually have a smaller period of post initial capital pre end of year. And as we get close to production at the end of the quarter, we’ll come out and we’ll provide guidance on production and the balance of the fourth quarter costs. But the work that we’ve done doesn’t negatively impact forward looking in terms of costs.

And importantly, I mean, I’ll just drill down a little bit on some of the productivity and people related issues. You know, the learning over the last quarters we’ve taken a higher level of direct control over management of the tasks is that, you know, we’ve got a group of people who from local hires who we’re converting from construction activities but not really related in the business we’re doing to being able to perform the task, which will be great as we go forth because we’re increasing the capability within the communities as we start to look forward to phase two for example. Right? But importantly is that because we’re locating hiring from the communities, we’ve got good support. And an interesting stat is that we have three ninety operating employees right now.

And over the last twelve months we’ve seen less than 3% turnover. So some of the issues that we see on the construction side because of the short duration of specialized skills are actually very favorable in the longer term. So, if that makes sense, does it address your question, or is there something that you’d like more clarity on?

Ingrid Rico, Analyst, Stifel: Yeah, no, that helps. And maybe just on the training and operational readiness, given that you’re talking about the productivity of contractors, how should we think about then that operational readiness and the productivity on the ramp up?

Darren Hall, President and Chief Executive Officer, Caliber Mining Corp: Yeah. No, thanks. And, you know, again, if we look at the team we’ve put in place, you know, we’ve filled our management leadership down through the superintendents and supervisory levels through both the mine and the process. Yeah, the additional time has given us additional time to be able to fill that first fill, if you will, of employees. But we’ve had a great team in place materially since April of last year.

It gives them more time to work together, more time to develop and ensure we’ve filled any gaps and closed any gaps with respect to capabilities both within the management, the supervisors and the operators as well. It gives us more time for their pre commissioning commissioning activities. As you mentioned, the phantom testing of all of the components to be able to establish the right narrative in and around the process control logic and then drill down with ABB through to make sure that everything’s talking to one another. You know, the guys are absolutely and gals are absolutely ready to go. And I’m confident that this will be as smooth as ramp up as you can possibly imagine given the preparation we have, the simplicity of the plant and the quality of the people we have.

So it’s a little bit of a double edged sword, but never let a crisis go to waste and the additional time has provided us with even more time to be able to prepare ourselves for a smooth ramp up and setting ourselves up for what will be a successful 2026 and a long term value creation asset.

Ingrid Rico, Analyst, Stifel: I appreciate that, and I’ll ask you the final one, and I know you’ve kind of made comments about this before on commercial production and how to define that. But just in terms of that timeline of kind of hitting that ramp up in steady state, are we thinking now sort of towards the end of this year to be at that sort of steady state ramped up stage?

Darren Hall, President and Chief Executive Officer, Caliber Mining Corp: Yeah. Again, so I don’t have to overpromise and under deliver, you know, I would anticipate that we will be at nameplate in q one of twenty twenty six. Right? I’m confident in that.

Ingrid Rico, Analyst, Stifel: Perfect. Thank you. That’s that’s all my questions, and we look forward to to see that first of from from Valentine.

Darren Hall, President and Chief Executive Officer, Caliber Mining Corp: Yeah. No. Appreciate it, and thanks for the support, Ingrid, and, yeah, appreciate your patience as we work through it. But, know, again, I think we are building a a quality asset with a long term future, and we’re making the right decisions as painful as they are, but the decisions we make today are setting ourselves up for a long term success and ensuring that we have great local support within the communities.

Conference Operator: This concludes our question and answer session. I would like to turn the conference back over to Darren Hall for any closing remarks.

Darren Hall, President and Chief Executive Officer, Caliber Mining Corp: Yeah. Thank you, operator. I’d like to take a moment and thank all of our shareholders for their continued support and not the least being the approval of the merger with Equinox Gold and everyone’s participation and questions on the call this morning. As always, Ryan, I and the entire leadership team are available. If you have any questions, please feel free to reach out.

And we look forward to talking to you soon and take care, be well, and back to you operator.

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

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