Calibre Mining – Solid Operational And Financial Results for Q1 2022, Along With An Overall Exploration And Development Update
Ryan King, VP of Corporate Development and IR at Calibre Mining (TSX: CXB – OTCQX: CXBMF), joins us to review the solid Q1 operational and financial results as well as the larger exploration strategy for the balance of 2022, with a large ongoing 85,000 meter exploration program at multiple properties in both Nicaragua and Nevada.
In Q1 2022 Calibre Mining saw gold sales of 52,487 ounces grossing $99.6 million in revenue, at an average realized gold price1 of $1,897/oz; and with a consolidated Total Cash Costs (TCC) and All-In Sustaining Costs (AISC) of $1,060 and $1,199 per ounce, respectively. The company also reported the successful completion of the acquisition of Fiore Gold on January 12, 2022 creating a diversified, Americas focused, growing, mid-tier gold producer.
Next we got Ryan to provide 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, which could essentially double the production output in Nevada when it comes online.
If you have any follow up questions for Ryan on Calibre Mining, then please email us at Fleck@kereport.com or Shad@kereport.com.
It was interesting to see the bifurcation in good operations reports like this one Calibre (CXB) put out, with the stock up over 8% today, and other stinkers from today’s trading like Equinox (EQX) {which was down almost -18% at one point today and closed down -14% on both lower production and higher costs} and Iamgold (IAG) {down over -26% at one point today, but closing down over -23% on the day due to what the Chair of the board called – “ongoing risk analysis at our Côté development project, coupled with the need for additional liquidity represent significant near- and mid-term challenges.”)
What is also striking is that even though both Equinox and Iamgold are significant mid-tier producers, with much larger market caps than Calibre, they had All-In Sustaining Costs much higher than Calibre, with Equinox coming in at $1,578 per oz, and Iamgold coming in at $1,490.
Is that a face plant, what IAG did today? And AISC projected to go to $1600+
Well, as noted below, it is very similar to what just happened to Argonaut a few months back, and we’ll likely keep seeing press releases similar to this with other companies as well, when the rubber meets the inflationary road. There are dozens of other development projects that run the exact same risks as what we’ve seen play out with Cote and Magino… so all the economic studies over a year old are going to need to be thrown out the window and reworked within the context of today’s macroeconomic environment. The question is which company is next to make a similar disclosure?
All things considered, despite some of the mid-tier producers having a rough day, overall GDX and GDXJ came out in the green on the day, so it wasn’t all blood in the streets on the day of the first 50 basis point hike in 22 years.
GDX up 1.91% on the day and up a bit more in afterhours trading
GDXJ up 1.81% on the day and also up a little more in afterhours trading
Overall it was a green day for many resource stocks, and my portfolio was up about 3.2% (despite the fact that I hold Equinox and it had such a bad plunge on the day…)
The cost overruns we are starting to see in larger development should have more investors sitting up and taking notice. We already saw a similar movie play out with Argonaut Gold (AR) when they way underestimated the capital needed to get their large Magino development project built, an now we are seeing this at Cote with Iamgold. When we interviewed Joe Mazumdar back in January, he mentioned both those projects Magino and Cote, as a cautionary tale of what inflation was doing to derail the economics of many projects he was reviewing.
Then more recently when we interviewed Chris from Silvercrest (SILV), he spent a great deal of time on this topic and what different metals price sensitivities and inflation metrics did to the economics of many larger silver project. Chris had mentioned how grateful they are to have begun construction over a year and a half ago, and having planned ahead for the resulting inflationary pressures from so much new money creation and supply chain issues, but for those companies with development projects in the works, inflation is really upending the best laid plans. We’ll likely see more and more reports like this from producers with development projects or the developers and most economic studies will need to be reworked with a balance between higher metals prices, but also vastly higher input costs and labor costs.
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Iamgold Unveils 90% Cost Increase At Côté Project
Cecilia Jamasmie | May 4, 2022
https://www.mining.com/iamgold-unveils-cote-projects-costs-blowout/
It makes me wonder if Glencore unloaded their assets to Santacruz because they were seeing serious problems with running those mines due to inflation. At the time I first thought WOW this is wonderful for Santacruz by why is Glencore doing this. DT
I actually think Glencore is divesting a lot of assets now, and it was a score for Santacruz Silver. Keep in mind those assets SCZ acquired are mines that can immediately be in production, not big development projects that will have cost overruns like Magino or Cote.
Also Glencore has just divested 9 royalties and a stream to Sandstorm Gold this week (which was buried in the Nomad / Sandstorm transaction). Also Glencore had unloaded their smaller non-core Zinc mines into Trevalli a few years back (but unfortunately that came at a time where the zinc prices crashed so it was ill-timed). I can’t remember off the top of my head right now, but Glencore also divested some other project to a junior recently as well, so they are right-sizing their ship it would seem.
I don’t believe the market has even begun to realize how transformative those 3 mines & mills are going to be for Santacruz Silver yet, and they also picked up some exploration/development projects in that basket of assets as well.
Hi Ex, your analysis is spot on if these were normal times, but what is happening everywhere I look and I don’t want to get into the nitty gritty because there is enough out there, but these are not normal times and I have seen too many corrections in my trading days where the markets really do a nose dive and if you are fully invested you will take a beating! That is how I feel and what I see happening around me, a correction like no other and it’s happening in real time right now. DT😒
This morning gold was up $25, it is now down $6.80, yesterday The Dow was up 950 points today it is down almost 1200 points, these are not normal times. Take it for what it is, I now I am. DT
Hi DT. Well, you’ve got a good point there… these are bizarre times in the markets, in geopolitics, in the social fabric of many nations and growth outlooks seem muted to problematic. I agree that we likely already began a large rollover in the general markets, and while things may bounce for a bit, the likelihood of another big leg down is very high.
Also, I do agree with you that cost inputs are rising due to inflation and that is impacting all producers and all development projects. A very tough market to trade and be invested in for sure.
It’s not just mining companies dealing with the pains of inflation, this is something sweeping across all sectors and impacting most businesses. As we’ve mentioned countless times in shows for over a year now, inflation pressures are eventually going to come home to roost and impact company earnings or their economic outlooks, and that will cause a slowdown in growth. Look at last quarter’s GDP figures in the negative… not a good look…
Now some companies in Europe are trying to implement price controls, so this is going to ugly pretty quick.
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From Coffee To Ketchup, Retailers Seek Price ‘Shields’ As Inflation Runs Riot
Richa Naidu and Jessica DiNapoli – Reuters – Wed, May 4, 2022
“As shoppers pay more for anything from coffee to ketchup, some retailers have started to cut or cap the price of hundreds of products as they compete for customers and set themselves up to do battle in negotiations with major packaged food makers.”
“Eurostat said on Friday that euro zone inflation for food, alcohol and tobacco rose by 6.4% in April versus last year, compared with a 5% increase in March, as the rising cost of living in Europe extends beyond expensive energy.”
“The head of Leclerc, France’s biggest retailer by market share, on Tuesday said it would identify the 120 items consumers buy most, including toilet paper, soap, rice and pasta, and create a “shield” whereby Leclerc will guarantee the price of those items from May 4 until July.”
https://finance.yahoo.com/news/coffee-ketchup-retailers-seek-price-104304415.html
It’s an interesting environment where many market participants are very keyed in to the “strong” US Dollar, but that is simply in relation to other equally fugly fiat currencies like the Euro, Pound, and Yen, and not a true reflection of actually having strong purchasing power. Because inflation is eroding the greenback by over 8% at present, that is what is really germane to consumers, and the reason prices are trending higher in almost all aspects of daily life, despite the rumblings about the King Dollar.
Rick Ackerman is sure convinced the strong dollar is going to derail the Fed plans and lead to a deflationary implosion. We’ll see how it all plays out, but these are definitely a treacherous market waters to be navigating.
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Rampant Dollar About to Undo the Fed’s Best Plans
By Rick Ackerman – May 1, 2022
The Fed’s Biggest Rate Hike in 22 Years | Making Money With Matt McCall
Stansberry Research – May 4, 2022
“The Federal Reserve just raised interest rates by half a percentage point – or 50 basis points. It was an expected move, but still the largest one we’ve seen since the tech bubble of 2000. In this short and sweet special edition of Making Money With Matt McCall, Matt talks about what today’s news means for your portfolio. He’ll also fill you in on some of the most important points to come out of Fed Chair Jerome Powell’s press conference.”
Installed a bidet in our ensuite a few months back, cut way down on the toilet paper.
Well… that’s one way to cut down on buying excessive amounts of TP.
Man, remember that craziness 2 years back where toilet paper and cleaning supplies became the most valuable commodities at any store. Wild times!
Kill two turds with one stone that bidet. Comfort convenience and save on TP.
+2
Mike Konnert – The Money Printing Will Get Crazier, They’ll Just Change The Name
I Love Prosperity w/ Jake Ducey – 05/04/2022
“In this video, Mike Konnert (CEO of Vizsla Silver and key partner of Inventa Capital) says the money printing will continue, inflation will continue, but they will just change the name and keep going. As the dust settles, money will move into gold, silver, commodities and more. Mike says he believes it’s possible there is another market crash before things resume. Mike breaks down why he has invested heavily into mining stocks and why he thinks silver is the place to be.”
Cathie Wood’s Worst Nightmare Comes True
Rob Lenihan – The Street – April 30, 2022
“Teladoc’s spectacular losses are focusing attention on the renowned investor.”
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Tom Goodwin @tomfgoodwin 4:41 AM · Apr 20, 2022·Twitter Web App
Stay at home stocks performance in the last year
Peloton -77%
Teladoc -65%
Chegg – 65%
Roku -67%
Netflix -50%
Docusign -53%
Just Eat -65%
Zoom -65%
“Who could have seen this coming?”
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“Peloton, saw its shares drop 48.35% from Dec.31’s figure of $35.76 a share to $18.47 on April 28.”
“Netflix posted the first decline in annual subscriber growth in more than a decade earlier this month. Shares fell about 67% since Dec.31 to $199.52 on April 28.”
“Cathie Wood’s flagship Ark Investment Management (ARKK) – Get ARK Innovation ETF Report is Teladoc’s top institutional holder, owning 12.1% of the virtual healthcare services company’s shares as of March 30. Teladoc, which is Ark’s third-largest holding, cratered after it posted a first-quarter net loss of $6.7 billion, or a loss of $41.58 a share and slashed its guidance.”
https://www.thestreet.com/technology/cathie-woods-worst-nightmare-comes-true-with-ailing-teladoc
Doc should’ve known that this BS regime wasn’t going to aggressively raise interest rates, especially in an an election year.
The dollar fell to an interesting support today and is still holding above it tonight. I will be surprised if it doesn’t break down very soon.
https://stockcharts.com/h-sc/ui?s=%24USD&p=D&yr=1&mn=5&dy=0&id=p89833555117&a=1104207215
And it gaps up near a full point today.
Even if it pulls back, it will simply constitute a buying opportunity, and nothing about that will change until the Fed or BoJ relent.
There are several reasons for the dollar’s relative strength lately, not just Fed policy. It sure can continue but there WILL be corrections (not just “pullbacks”) along the way. Regardless, you can rest assured that it will continue to lose purchasing power in the real world.
Don’t forget that it was at today’s level back in early January 2017 when gold was around $1,150. If the dollar index was a worthwhile measure of the dollar’s value, gold would be $1,150 today. It is also worth noting that the dollar had TWICE as much real value when it hit its all-time low of 71.33 in April 2008 than it does today. We know this because gold was around $900 back then and has doubled since.
Brixton had its biggest volume since last November on Tuesday but if we only compare it to volumes at major lows, it was the biggest volume in its history. Of course that would only matter if Tuesday turns out to be a major low.
https://stockcharts.com/h-sc/ui?s=BBB.V&p=D&yr=1&mn=11&dy=13&id=p43178195343&a=948101665
I’ve accumulated quite a bit of BBB, Brixton.
CDNX, TSX.v index at a low? IMHO I hope so, haha…
Mathew had been right about violent swings in HYMC. I’ve been trading it down & just sold 2000 shares pre- market at 1.83
Gold back above $1900, Silver back above $23, and Oil back above $110 to kick off the day.
That didn’t last long.
G. Savage could be right that the intermediate low is coming in the next week. Gold is going to have to pretty much crash to make a lower low from here in the next handful of days.
One thing is 100% clear at this point though–the miners and silver aren’t going to survive a stock market crash in absolute terms. they may well bottom before the conventional markets, but that isn’t much consolation.
That’s not 100% clear at all. You’re reading a lot into one day which is bad enough but the fact that it’s one day following the Fed decision makes it worse. There’s a long history of Fed day trading action reversing in the days that follow. On top of that, this sector’s weekly technicals were already threatening enough to explain a good portion of today’s selling and gold and silver’s opening gaps and reversals added plenty to it.
There have already been many very weak stock market days this year during which the miners not only held up but did very well. It has been better than usual in fact since even silver, the silver miners and juniors had days when they shrugged off a bad stock market. That is not typical.
The week isn’t over but for now, this is still just a backtest of the early March breakout.
https://stockcharts.com/h-sc/ui?s=GDX&p=W&yr=3&mn=7&dy=0&id=p00270316571&a=1120525921
The broader commodity complex (GCC) made a moonshot over the last year and is incredibly extended above the 200 week MA, yet it currently appears to be in a textbook pennant consolidation and really hasn’t given back anything.
Silver OTOH didn’t partake at all in this moonshot over the last year and actually lost significant value over that time vs GCC, to the point now where it is just about back to the 2018 lows vs GCC. Put simply, it is one of the worst performing assets over the last 15 years, and if it breaks below the 2018 low vs GCC it will cement it. A bounce in the ratio has got to be near at hand, but the nature and severity of the selloff in relative value has to have you questioning it’s supposed role as a monetary metal or even as a so-called inflation hedge.
I am still an ultra bull on silver believe it or not. But the damage in relative value over the last year has to at least suggest the possibility that it could still be years before silver takes off.
Good points Greenspansconscience on the lagging performance of Silver, in comparison to other commodities, and it’s similar when looking at it comparing it to Gold. Gold went up and made a new all-time high in 2020, and nearly hit that same level again in March, but Silver would need to double to get back to all time highs and hasn’t come close to that the last few years.
I’m still very bullish on Silver for this metals cycle, and still believe that when it starts to move, it will be much faster than many are expecting, and it will eventually play catch up to the moves we’ve seen in the yellow metal and most of the base metals. When those moves do play out, and they’ll likely be starting later this year, then people want to have already established their positions in the Silver miners. Right now, while the silver mining stocks are so unloved is that time to fortify low cost-basis positions…. not when Silver start ripping higher week after week.
Sadly, waiting until Silver has already ripped higher is exactly what most investors will end up doing and what they do every time. We saw it in 2016, we saw it in the Q1 Runs of 2017, 2018, and 2019. We saw it from 2019 into the summer of 2020, and we saw it in the very brief SilverSqueeze of Jan/Feb 2021. Most investors in any sector that is out of favor will miss the initial moves which are the easiest gains, because they actually don’t like “buying low.” Then when momentum starts, they start chasing things higher after the stocks are up 2x 3x 5x, or worse, watch it all happen from the sidelines and say “wow! I can’t believe how far those silver stocks just moved up.” We saw that exact same pattern play out with Lithium stocks, Copper stocks, Palladium stocks, and most recently in Uranium stocks. It’s the same every time, and that same pattern will play out in Silver stocks over the next 1-2 years. I have little doubt Silver will break through the $30 ceiling later this year and should be well into the mid $30s and $40s by 2023, and challenging that $49 A.T.H.
The problem is is that silver and mining stocks still trade like conventional stocks. You literally get all of the downside and more, and hardly any of the upside except for very very brief spurts lasting 6 months or less. The market takes the Fed at their word for some reason and never ever calls their bluff.
Since 2016 is seems the pattern is–spike for 6 months and then sell off for two years making lower lows and lower highs.
The metals caught none of the benefit of QE, at least in relative terms. The fact that most silver miners are still below their 2016 peaks is embarrassing. Ive been optimistically arguing that they would finally break above that level sometime in 2023. The fact that some here think that is too bearish is frankly hilarious. At this point, I will be thanking god if that plays out in 2023.
Yep, the updrafts are not long the 8 months in 2016 from Jan – August, or the Q1 Runs (coming out of December tax loss selling in Jan/Feb/and sometimes into early Mar) in 2017, 2018, and 2019, and then the run from Fall 2019 – Feb 2020, and then from March 2020 – Aug 2020.
That is why longer term buy and hold in this sector has been a bad strategy for over a decade, and these stocks are best to position trade for the big moves higher and make hay while the sun is shining.
AXU has been trading like 2012-13, maybe worse. If it continues to break down, I sincerely think it is presaging a crash in the market.
I’m less worried about AXU and it is caught in a sentiment downdraft, and as previously mentioned, was punished for being behind schedule getting ramped up into commercial production (said almost every developer that moved into being a producer), and people didn’t like the recent capital raise as result. However, all the high-grade silver ounces are still in the ground, the production is ramping up, and despite the misplaced and old belief that the silver stream with WPM is a problem… it isn’t. That stream is baked into their AISC at just under $12, which gives them very fat margins with Silver at $23.
Alexco is one of the easiest layup 3-5 baggers in the silver producers space on my radar, and then once it moves up that far, the same people doubting AXU will be singing it praises as best in class. Just the fact that is Canada’s sole primary silver producer will eventually fetch it a nice premium over it’s peers, as will it’s very high grades. The current environment is investors chance to “buy low”, but few will seize it.
Markets Are At Risk Of Another Major Deleveraging Event
Jesse Felder – The Felder Report – May 4, 2022
https://thefelderreport.com/2022/05/04/markets-are-at-risk-of-another-deleveraging-event/
Look at the size of today’s outside candles. It doesn’t get much uglier.
So much for rising rates being good for the metals. They are trading right along with the stock market . They basically captured none of the upside conventional markets have enjoyed for the last 6 years, yet they appear to be getting all of the downside (and more if you are unlucky enough to own silver miners).
How this could end before the Fed expressly relents on QT and rate increases is hard to envision.
Let’s pray the G.Savages call for an intermediate cycle low in gold next week plays out. I would like to see gold hold onto it’s 50 WMA on a closing basis next week, but intraweek it’s possible it could go a lot lower.
In order to break the cycle trendline, which is a typical prerequisite before an intermediate cycle low can be struck, it’s going to have to trade below $1840 this week or about $1845 next week. But let’s be real here, if the stock market continues to crash, I see know reason silver and the mining stocks won’t be joining the party.
You could cynically state that the miners are only ever worth owning once the Fed initiates the next round of QE. Until then, they will almost certainly get killed along with the rest of the market.
How many times have we been through this Fed cycle with them attempting to raise rates and then relenting when the market starts to crash? At what point do the metals and miners call them on their BS and actually start discounting QE to infinity? Well, it’s definitely not now.
I’m expecting a large gap down tomorrow morning to kick off the next leg down in the miners. If today turn’s out to be a bear trap, we will only know in hindsight.
Final comment before I sign off for a while. There doesn’t appear to be any major MA support for silver between here and the lower weekly bollinger band at $21.53. We could see that level get hit soon. And if it hits the lower BB, I think its probably going to tag its 200 WMA too, which is currently at $20.23. Beyond that level, there is the 400 WMA at $18.44, which could be hit on a violent enough sell off.
At this point I am expecting a continued plunge up until the Fed expressly reverses course–and god only knows what will be enough to trigger that. If the metals can somehow buck that trend, then great.
It’s the same old same old–liquidity crash, QE announcement, spike in metals and mining prices for 6 months or less, sell off for 2 years, rinse and repeat. The absolute quantity of currency doesn’t seem to matter.
GDX 4 hour chart….so far a C point of abc down formed…..it formed bar 1 of TD9 count down…earliest low is next tuesday…..note low vol so far….good for bounce idea…this bounce up was exact .24% up from low…..bearish engulfing candle on all time frames…we are approaching significant low …exact timing has a chance early next week…that would be ideal….but anything can happen…rumors of war sour all equity initially….should have been a plumber?
Turn Tables: https://tinyurl.com/yc794bru
Larry: Moved Monday back to ‘Possible’.
thanks BDC…that chart of yours is odd for me but it does show me more as i stare at it…by the way…Saturation just means that the forecasted up or down move has matured to where it could be expected??
larry
Thanks Larry. I hope this helps:
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“Turn Tables” were previously called “Price Quality Tables”. They are tables that focus on position and vector rather than the ‘quantity’ (dollars and cents) which charts use. Turns (tops, bottoms) for entire sectors or individual stocks can often be determined accurately in a timely manner.
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Saturation refers to the ‘Saturation Level’ of seven distinct factors used, and is derived from price alone (nothing else, e.g. not volume etc.). When 4 or more factors reach 100% Saturation that total number is displayed, with logical coloration. Parentheses are added to levels (6) and (7) for emphasis.
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The rules based Saturation System is automatic.* However, the dark colors, nearly all without MaxSat (Maximum Saturation) numbers, are my own addition, being strongly rules based, but still subjective. They indicate that a trend will continue for at least another day. Turns are sometimes immediately preceded by these.
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A powerful aspect is the white space! Note how turns are followed by at least two days of empty cells (trending away from top or bottom). Better timing for buying and selling is available for traders, and even investors. Questions and comments are welcome.
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*I currently enter data manually: https://tinyurl.com/yc794bru
ok…BDC…i saved these posts and will review further this weekend…..are you a math guy?…the way you are describing this method, you know,that is all…it matters not at all…i did notice on my nat gas trading the first quarter most of your calls were good…but one gap up surprised…no system is 100%….
True, the best we can do is shoot for 100%. The underlying function utilized was created by a true math wizard in the 1990s, which I came upon luckily three years ago. Beta testing was completed over this past year. Please ask followup questions. They help to explain things better.
P.S. Pre-market now, UNG-BOIL-KOLD all have reached MaxSat (7) levels. If they open lower/higher than yesterday, and stay there, these will be displayed: “.(7).” with periods fore and aft. This will very likely mean a trend change, which will be noted with dark grey when confirmed. The NFP (Non-Farm Payrolls) report is at 08:30 today.
The above has been displayed, on spec, and may revert to ‘normal’ (trend change confirmation required).
Current UNG (14:20 Friday): https://postimg.cc/F7gzK5xr
May go lower today. High retest expected Monday.
‘Possible’ rating kept until confirmed then.
It was nice to get the update from Calibre on how they had planned in advance for higher inflationary pressures and locked in a number of contracts in advance to mitigate some of the rising prices, and also that their AISC of $1,199 and average realized selling price of $1897 per ounce still gave them healthy margins. Also it was encouraging to hear that they expect even better numbers in the second half of 2022 as their grades will be increasing at a few different mines and then in 2023 when Pavon Central and Eastern Borosi come online, the grades will be substantially higher at 6.5 g/t and 6.8 g/t respectively.
There also seems to be room for expansion and improvement at the Pan Mine in Nicaragua, and it is nice to see both that project and the nearby Gold Rock project getting a healthy amount of drilling this year to keep expanding and better understanding the resources there, after their acquisition of Fiore.