Calibre tables Valentine gold mine update, Q1 results

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Calibre Mining Corp. [CXB-TSX, CXBMF-OTC] has released an updated capital cost estimate for the Valentine Gold Project in Newfoundland, an asset it acquired via the recent acquisition of Marathon Gold Corp.

“Our project optimization and derisking efforts, combined with accelerating a portion of the Phase 2 expansion capital, results in an initial capital cost of $653 million, a $145 million increase over Marathon Gold’s Q3 2023 update,’’ Calibre said in a press release.

“With $279 million cost to complete as of April 30, 2024, and approximately $400 million of cash and restricted cash, we are fully funded,’’ Calibre said. However, Calibre went on to say that the updated cost estimate is consistent with its pre-acquisition due diligence and three primary components.

They include Marathon’s schedule and cost underestimation of $70 million, Calibre’s project optimization and derisking of $40 million and Calibre advancing operations and phase 2.0 expansion capital of $35 million.

With overall construction progress now 64% complete, Valentine is expected to rank as the largest gold mine in Atlantic Canada with an average gold production profile of 195,000 ounces of gold annually for the first 12 years. The project has estimated proven and probable reserves of 2.7 million ounces of gold.

First gold production is scheduled for the second quarter of 2025.

On Wednesday, Calibre shares rose 2.3% or 17 $0.05 to $2.19 on volume of $2.19 million. The shares trade in a 52-week range of $2.19 and 15.5 cents.

Calibre is an Americas-focused mid-tier gold producer with a pipeline of development and exploration assets across Newfoundland and Labrador in Canada, Nevada and Washington in the U.S.A. and Nicaragua.

The acquisition of Marathon Gold and its Valentine gold project was designed to create a high-growth, cash-flow-focused, mid-tier gold producer in the Americas with expected annual production of 500,000 ounces by 2026.

Prior to the acquisition, Marathon announced the sale of an additional 1.5% net smelter return royalty on its Valentine Gold Project in Newfoundland to Franco Nevada Mining Corp. [FNV-TSX, NYSE] for US$45 million. As a result, Franco-Nevada will hold a 3.0% NSR on the project.

Meanwhile, Calibre reported its first quarter, 2024 results with adjusted earnings per share of $0.01 ($5.58 million) on production of 61,767 ounces. Revenue in the quarter was $131.9 million.

“Calibre has had an exciting start to the year as we remain on track to achieve our fifth consecutive year of increased full year production guidance of 275,000 to 300,000 ounces,’’ said Calibre President and CEO Darren Hall.

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