Calibre Mining – Overview Of The 2022 Exploration Strategy At Their 4 Nicaragua Projects And 2 Nevada Projects
Ryan King, VP of Corporate Development and IR at Calibre Mining (TSX: CXB – OTCQX: CXBMF), joins us for the overall exploration strategy for 2022, with a large 85,000 meter exploration program at multiple properties in both Nicaragua and Nevada.
First we get an in-depth review of all the resource expansion and exploration focus across Nicaragua at the 4 main areas of focus; Limon, Libertad, Pavon Norte/Pavon Central/Pavon South, and Eastern Borosi. Ryan goes into a number of growth targets around each of these projects, and also outlines how quick the timeline has been to explore, develop, permit, and then move the prior satellite deposits into production thus far.
We wrap up a with a review of the exploration and development focus at the Nevada projects, mostly around the producing Pan Mine, but with some exploration and development work going on at the Gold Rock development project
If you have any follow up questions for Ryan on Calibre Mining, then please email us at Fleck@kereport.com or Shad@kereport.com.
Agreed Silverdollar. If people are bummed out at the price of gold today, then they probably shouldn’t be invested in this sector, because on a historical basis $1917 Gold is a pretty high price, and we are about to close up this first quarter on Thursday with the highest quarterly close on record. That shouldn’t be a downer for anyone that truly understands this sector.
People should recall that the low for the Gold in 2021 was over a year ago in March at $1673, so we are substantially above that level, have been trending higher for the last 5-6 months, and they yellow metal just made a run at it’s all-time high just a few weeks ago. That sure isn’t bearish action by any stretch.
Also, as you pointed out, the mining stocks have been mostly holding onto their gains and the ETFs GDX and GDXJ are both up again today about 1%. My portfolio is up over 1% on the day. Many of the stocks on my watchlists are up in the green today, although it is a fairly mixed bag out there. The point being is the mining stocks are holding up pretty well considering the recent corrective move in the gold. Even Silver is pretty much holding up around the high $24’s to low $25s, so it didn’t go crashing down to $22 or lower as some were projecting, and that is another strong factor for the sector.
It’s definitely not a time to sell out of the sector and going running for the hills. I trimmed back about 4 positions today just slightly, that were well in the green for me, just to raise a bit more dry powder, in case some other stocks do capitulate more to be able to seize on those opportunities. Overall though, for the most part, just holding steady in most stocks and if anything looking to add on any weakness in a number of them.
This is a great company doing alot of good things but hauling ore 400km from E.Botosi to Libertad is probably not going to be a long term proposition, given the maximum size of the highway truck, 6g/t payload, all the truck operating costs, wages, etc. Soon as they find more ore around Libertad to fill that mill to capacity, they will need another mill in a more distant location in order to expand the company.
They still have a million tons per annum capacity at the Libertad Mill, and Ryan outlined that despite the hauling distance it was still quite profitable due to the 5-6 g/t grade. Now if they found so much more ore around the Libertad Mill that they could actually fill it up from nearby sources, then yeah, it may even make sense to build a 2nd mill, but that sounds like a long way off, and right now, the plan is to bring Eastern Borosi into production next year.
Calibre uses a private contractor to haul ore so they don’t manage the truck fleet. 75% of the diesel price is hedged, 25% floats. The latest figures from Calibre is that it costs $0.11 / KM USD per ton so $44 / ton.
At $1,900 USD / oz, 6gpt = $402 USD of gold revenue per ton. Haulage consumes $44 of that or 11%. That’s all-in so includes the trucks, drivers, maintenance, diesel and profit for the contractor.
So your statement “but hauling ore 400km from E.Botosi to Libertad is probably not going to be a long term proposition” superficially sounds right, but the actual math doesn’t support that conclusion.
If the price of gold today is a downer for you, remember, this manipulation occurs regularly whenever options expiration on the futures contract happens. Note that mining stock owners are becoming immune somewhat to this happening. Gold on the futures is off $24 whereas HUI is up 1.08. Not necessarily a time to be selling your holdings. JMO