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spk00: good day and thank you for standing by welcome to the caliber mining corp second quarter 2022 earnings results and conference call at this time all participants are in a listen-only mode after the speaker's presentation there will be a question and answer session to ask a question during the session you will need to press star 1 1 to raise your hand please be advised that today's conference is being recorded i would not like to hand the conference over to your speaker today ryan king Senior VP, Corporate Development and Investor Relations. Please go ahead.
spk03: Thank you, Operator. Well, good morning, everyone. Thank you for taking the time to join the call this morning. Before we get started, 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 2021 annual MD&A and AIF available on our website as well as on CDAR. And finally, all figures are in U.S. dollars unless otherwise stated. Present today with me on the call are Darren Hall, President and Chief Executive Officer, David Swett, Senior Vice President and Chief Financial Officer, and Tom Gallo, Senior Vice President, Growth. We will be providing comments on our second quarter and year-to-date results. exploration programs and our outlook for the remainder of 2022, after which we'll be happy to take questions. The slide deck we'll be referencing is available on our website at calibremining.com under the event section. You can also click on the webcast to join the live presentation. And with that, I'll turn the call over to Darren.
spk06: Thanks, Ryan. Moving to slide three. Good morning and thank you for taking the time to join us today. I'd like to start by thanking all of our employees and business partners for their continued focus, which resulted in another record production quarter, which pleasingly was led with our safest quarter ever. As of the end of Q2, our year-to-date injury rate is 55% lower than our full year 2021 rate, clearly demonstrating the team's focus on improving performance. The team delivered a record 59,783 ounces for the quarter, for 112,270 ounces year-to-date, positioning us favorably with respect to budget at mid-year. Despite industry-wide inflationary pressures, our year-to-date all-in sustaining cost of 1244 per ounce is favorable to budget and within guidance. With our solid H1 performance and continued increase in grades in Nicaragua, which will support higher production and lower cash costs in H2, we're well-positioned to reaffirm our commitment deliver on full-year 2022 guidance. We have completed 120 of our budgeted 170-kilometer exploration drill programs, which has led to new discoveries and resource growth opportunities. I'm encouraged by the success in Nevada with drilling at Pan and Gold Rock delineating higher grades and potential to expand resources and increase reserves. During the quarter, we announced the exciting discovery at Pantheon North within the LeMond Complex. which coupled with our VTEM results provide us a new understanding of mineralization controls along kilometers of potential strike length. Tom will discuss our exploration progress across the portfolio in more detail shortly. The company is in great financial shape with $92 million in cash and continues to strengthen Treasury after investment into exploration and mine development. And I'll pass it over to David to discuss our second quarter financials.
spk04: Thanks, Darren. Turning to slide four, as Darren mentioned, we had a strong quarter with respect to production and liquidity management with a record $92 million in cash at quarter end. We experienced higher production costs in Q2 over Q1, largely due to diesel and a lesser extent other consumable price escalation. However, In Q4 2021, our supply chain team fixed our 2022 volumes and prices for cyanide and grinding media with the objective to minimize supply chain risks and price volatility. As a result, our operations have experienced an estimated annual inflation rate of approximately 7.5% through June 30th, well below what we're seeing for industry average and a little more than half of the cash cost increase from Q1 to Q2 is tied to inflation. Aside from price impacts, planned increased waste stripping at Penn during this quarter increased consolidated cash costs by approximately $30 per ounce. The remaining cash cost per ounce difference was largely related to the acquisition of Fiore in Q1 with the Nevada cost being integrated into the consolidated caliber results for 79 days in Q1 versus a full Q2. We remain well within our full 2022 production and cost guidance and favorable to our year-to-date budget, supported by petroleum prices falling 20% in July from June high. Regarding liquidity management and our June 30th cash balance, We have been successful in crystallizing many of the Fiori acquisition synergies, which include obtaining a refund in Q2 of $5.2 million for the Pan-Shirty Bond Collateral, with a further $1.3 million released in early July. A second positive cash impact from Q1 to Q2 was the higher cash flow from operations after investing activities. The increase in margins due to higher process grades and gold prices more than offset an increase of $7 million in capital investments quarter over quarter. Finally, the timing of the June close versus our weekly payables release positively impacted June 30 cash balances by approximately $6 million. One point I will highlight in our financial statements or our Q2 financial statements, aside from our cash balance, is an exploration expense credit of $1.1 million, reflecting the capitalization of the Q1 VTEM survey. Now, looking towards the second half of 2022, progress at our high-grade Pavon Central and Eastern Borossi mines are ahead of schedule, which positions management to advance equipment purchases originally planned for 2023 and commence earthworks in the second half of this year. As mentioned earlier this year and discussed during this call, we continue to see solid cash margins over the course of 2022, and the company will continue to preserve significant liquidity should accretive investment opportunities present. I will now hand the call over to Dharam to provide an exploration update.
spk02: Thanks, David. Moving to slide five. In 2022, we've shifted our focus from conversion and confidence drilling to expansion and discovery drilling with a multi-rig 85,000-meter program active across our Nicaraguan portfolio. As a result, we have made a new discovery of Bonanza mineralization at Pantheon North within the Limon complex. and have identified numerous priority drill targets across our regional concession package. At Pantheon North, located one kilometer northwest of existing operations, we continue to intercept consistent high-grade zones, thus far across approximately 500 meters of strike and over 250 meters of depth extent. We have three drills turning here targeting mineral continuity to depth, and we expect these high-grade results to make a positive impact to our R&R statement for our El Limón complex which has produced more than 3 million ounces of gold over its history. A recently completed airborne VTAM geophysical survey at Le Monde demonstrates a significant opportunity along strike of the known Pantheon and Santa Pancha vein trends for over six kilometers beyond currently drilled areas. There are five rigs active at Le Monde as we continue to drill test these newly developed targets. At La Libertad, we see the potential for new mineral resources, particularly at Volcan, near surface discovery. Exploration work has demonstrated the potential for open pit style mineralization located within five kilometers of the Libertad Mill. Drilling is underway with three rigs on priority targets, with focus now shifting to Cosmatillo and Santa Julia along strike of Vulcan. At both Eastern Barossi and Pavone, our focus remains on delineating mineralized extensions to our anticipated new mining horizons. Currently, exploration drill programs are ongoing with two rigs at EPP, testing extension to known resources with newly identified mineralization located both southwest and northeast of our planned Rispos de Oro project, which is on track for development in 2023. At Pavon Central, where the six and a half gram reserve grade is more than double the grade mine from Pavon Norte, we recently received the key environmental permit for continued advancement and development for open pit mining. Both projects will contribute to Caliber's plan to grow production driven by grade from the kind of Moving to slide six, our Nevada properties located in the prolific Battle Mountain Eureka Gold Trend provide caliber with considerable exploration potential across a 222-kilometer-square land back. We are encouraged by our Nevada drill programs thus far in 2022, and we see an excellent case for mine length extension at Pan, resource growth and project de-risking at Gold Rock, and opportunities for further optimization at both projects. Exploration efforts from our multi-rigged 50,000 meter program at Pan continue to demonstrate strong potential to expand and upgrade resources as we infill and step out a long strike between past and active mining areas. The dynamite, Pegasus, black stallion and dune targets remain high priority given the continued drill success. The results to date have affirmed our view that mine life extension at Pan is a key driver of value. Turning to slide seven, Gold Rock, which sits on a prospective 78-kilometer square land package located just south of the Pan Mine, is a federally approved advanced stage project, which provides us the opportunity to double Nevada production. The ongoing 35,000-meter drill program has revealed high-grade intercepts over significant widths across the primary project area, while at the same time has provided us enough data points to support a robust geometallurgical predictive model. Encouraging metallurgical results demonstrate that the mineralization is amenable to keep leaching with favorable recoveries and leach cycles and ongoing drill results have shown higher grades than already published resources. We continue to advance infill drilling and technical studies to support state permitting initiatives, which have commenced this quarter. Given the new detailed gain from this year's drill program, we anticipate a made in reserve declaration for end of year 2022. With that, I'll hand the call back over to Darren to conclude the presentation.
spk06: Thanks, Tom. Moving to slide eight. We remain committed to and transparent in improving all aspects of our business, including our social, environmental, and governance programs, which are detailed in our recently released annual sustainability report. We continue to strengthen the business with our demonstrated ability to consistently deliver on expectations quarter over quarter, permit new mines, and grow production, which has enabled the company to release our three-year grade-driven outlook in June, which organically grows production to 300,000 ounces per annum in 2024. It's worthwhile noting that the outlook does not consider the encouraging results which Tom mentioned earlier, including the resource growth at Pan, the Bonanza Gray discovery at Pantheon North, nor Gold Rock. With a clean balance sheet, continued strong cash flow from operations, we can self-fund our growth strategy throughout the Americas, which will result in significant value creation for all of our shareholders. With that, we're happy to take questions. Back to you, operator.
spk00: Thank you. And as a reminder, to ask a question, please press star 1-1. Please stand by while we compile the Q&A roster. And our first question. We'll come from Justin Stevens from PI Financial. Your line is open.
spk05: Hey, team. Good to see the solid operating results and obviously good to see guidance reaffirmed for the year. Not everyone's been able to do that, so I want to congratulate you guys on being able to pull that one off so far. First question for me, I was wondering, what do you guys see as the critical path to getting mining up and running at Pavon Central? Is it just the clearing and stripping that will sort of be the constraint?
spk06: Yeah, thanks, Justin. I mean, at Pavon Central, we received a permit on June 8th. We've commenced the early works as some road building, some relocation of infrastructure and facilities, power lines and things which we're working on now. We've let contracts to commence that, so we're comfortable that we're on schedule to be able to commence the early works mining by end of year and with all production coming in and potentially even late this year or very early in 2023. So everything's on plan and on schedule there.
spk05: Great. And as you mentioned, you've had some pretty good exploration success at Pantheon lately. Given the high grades there, do you see the Pantheon material perhaps getting prioritized over Santa Pancha mining in the coming years? And do you expect any significant differences in terms of mining the Pantheon scopes versus Santa Pancha?
spk06: No, I think it's more of the same. And again, depending on how Pantheon North plays out, I don't think it necessarily needs to be an either or. Both those things could happen concurrently. So what it would likely be reflected in is additional material being hauled to Libertad and where that material came from, whether it came from one of the open pits or the underground were agnostic too. So I think it would result in an absolute volume increase at an average high grade. Right, which is good to see.
spk05: And on that, I mean, based on the numbers from Q2, it looks like you still have quite a bit of headroom at the Libertad mill. depending on sort of, you know, how it's run. I think you could easily get, you know, 2,000, 3,000 tons a day more in through that mill. Yeah, there's absolute, sorry. Yeah, and that's, I'd say, even without running at the second oxygen circuit, which I'm assuming is still down.
spk06: Yeah, no, there's plenty of capacity at Libertad, you know, As it stands, we've still got in excess of a million tons of capacity at Libertad, so that's a long way from being a bottleneck, which, again, keeping in context, there's twice the capacity at Le Mans. So you can see the torque that exists there from incremental throughput at a higher grade or even at more modest grades from, say, a Volcan or something like that would very accretively add to cash flow. So, yeah, lots of capacity at Libertad, lots of opportunity for... to improve that multi-year outlook.
spk05: Right, and I guess on that, that was going to be my next question. Obviously, you know, you've only recently put it out, but given the exploration success that you've had, once you've got sort of updated reserves and resources, which I'm assuming will be year-end, do you think you'll sort of continue the trend of trying to produce an updated multi-year outlook to give an idea sort of where things are headed?
spk06: Yeah, no, I think as we've done for the last three years now, as we've had confidence in and we've had the support for, we're pretty transparent in providing that information. I mean, we may be a shade conservative in terms of making sure that we're very confident in our ability to be able to deliver on those expectations. We don't want to set expectations that are beyond our knowledge base, but as appropriate. we'll start to reflect what we know in that guidance going forward or that outlook going forward. So let's see how the balance of the year rolls out, how Pantheon plays out in terms of a reserve resource update. And we'll look at that entire portfolio. We've got some very encouraging results in Nicaragua, but we're also seeing some very positive results out of Pan as well. So the opportunity to be able to keep track in front of the train there at Pan and extend mine life is pretty positive. Also running the feasibility work at Gold Rock to de-risk that project, you know, puts us in a position to maybe more intelligently talk about how that fits into the portfolio in the next couple of years as well. So, yeah, no, exciting times. And again, as we have information, we'll definitely get in front, but, you know, we'll ensure that it's all supported with reserves before we start to make broad statements.
spk05: Yeah, for sure. I know it's, I think, the right way to be tackling it. But, yeah, that's it for me. Congrats on a good quarter. Looking forward to seeing what the back half of the year holds.
spk06: Okay. Appreciate it. And congratulations on the wedding on the weekend.
spk05: Yeah, thanks, Darren.
spk00: Thank you. And I am showing no further questions from our phone lines. I'd now like to turn the conference back over to Darren Hall for any closing remarks.
spk06: I would like to thank all of our shareholders for their continued support and everyone's participation on the call today and the questions. So thanks, Justin. And as always, Ryan and I and the leadership team are available if you have any further questions. So take care, and I'll pass it back to the operator.
spk00: Thank you. This concludes today's conference call. Thank you for your participation, and you may now disconnect. Everyone, have a wonderful day.
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