Calibre Mining Corp.

Good day and thank you for standing by. Welcome to Calibrate Mining Corp's third quarter 2023 financial 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'll need to press star 1-1 on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today,

ryan king senior vice president corporate development and investor license please go ahead 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 and certainties 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 the Q3 2023 MD&A and Consolidated Financial Statements 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 Splett, Senior Vice President and Chief Financial Officer, and Tom Gallo, Senior Vice President of Growth. We'll be providing comments on our third quarter and year-to-date 2023 results, after which we'll be happy to take questions. The slide deck we'll be referencing is available on our website at CaliberMining.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.

Thanks, Ryan. Moving to slide three. Good morning and thank you for taking the time to join us today. I'll start by thanking all Caliber employees and business partners for their continued support, which resulted in our fourth consecutive record-breaking quarter. I'm very pleased with the team's performance, which included responsibly delivering record gold sales in excess of 73,000 ounces, a 50% increase year over year, at a total cash cost of $1,007 per ounce, and an all-in sustaining cost of $1,115 per ounce. Year-to-date, the company has delivered a record-adjusted net income of $74 million and earnings per share of 16 cents. The company continues to deliver strong free cash flow with $16.3 million this quarter. Our cash position grew 26% over Q2 to a record $97 million. With year-to-date performance favorable budget, we remain in a strong position to deliver into the upper end of our full year of production guidance. During the quarter, we announced numerous favorable expiration results. and a maiden mineral resource at Balkan, which is located less than 10 kilometers from the Libertad Mill, all of which continues to demonstrate our ability to expand existing and discover new resources. During the year, the team has successfully delivered both the Bavon Central and Eastern Borussia open pit mines into production, which marked significant milestones that further demonstrate our ability to not only fulfill our full year commitments, but also to grow our business organically. Turning to slide four, since the acquisition of the Le Mans and Libertad operations in late 2019, our exploration programs have resulted in a 280% reserve growth after producing 750,000 ounces of gold. Recently, we've seen success across the Le Mans property, most notably along the Pantheon-Vitam coal corridor. Following Pantheon's discovery in 2020 and subsequent developments and production in 2021, we identified the high-grade Pantheon North deposit and VTEM Gold Corridor, which continue to reveal high-grade potential long strike. I anticipate that the success we've seen along the VTEM Corridor this year will positively impact our year-end mineral resource estimates. During the quarter, we announced drill results from the high-grade Atrapasada Underground, located two kilometers west of the Limon plant, which further demonstrates the overall resource expansion and discovery potential of the enduring Limon District, which has produced in excess of 4 million ounces since its inception. Moving to slide five, since 2019, we have demonstrated the effectiveness of our operating strategy, responsibly obtaining permits and developing satellite deposits to responsibly grow production while utilizing the existing processing infrastructure at Libertad. A recent testament to this is the initial open pit mineral resource at Volcan, which is located less than five kilometers from the Libertad plant. In addition, our resource expansion drill program within the Libertad complex unveiled high-grade gold mineralization just 100 meters below the existing underground development at the Hoverley underground mine, confirming its expansion potential. Additionally, Scout Drilling has identified new target areas located within 10 kilometers of the Libertad Mill, presenting opportunities for further discovery and resource growth. I look forward to talking about ongoing results as we continue to advance our drill programs across the assets. Turning to slide six. As we continue to self-fund exploration and development whilst concurrently increasing our cash reserves, I'm confident that Caliber continues to present tremendous opportunities. for all of our shareholders. Our commitment to responsible, sustainable, and transparent operations ensures long-term prosperity for all of our stakeholders. With that, we're happy to take questions. I'll now pass it back to you, operator.

Thank you. As a reminder, to ask a question, you'll need to press star 11 on your telephone. To withdraw your question, please press star 11 again. Please wait for your name to be announced. Please stand by while we compile a Q&A roster. One moment for our first question. Our first question comes from the line of Farouk Hamed with Raymond James. Your line is now open.

Great. Thanks very much. Good morning, everyone. Thanks for the call. Darren, I guess my first question was just related to, you know, kind of the outlook for the rest of the year. So you've had strong performance year to date, especially on the production side. and you know well set up and you said that you're you know aiming for the top end of your production guidance um maybe just as it relates to the fourth quarter do you continue to expect to see like a similar milling rate at libertad as you saw in q3 it seemed that it was quite quite high in q3 and and then secondarily um do you continue to expect a similar type of contribution from pavon central in q4 yeah thanks for rick and hope you're well um no

The runway we've established in Q3, I would anticipate to continue in Q4. And as you've kind of highlighted there, is that, you know, we would anticipate that current monorail is delivering to the high end of production guidance. And the deliveries from Pavon Central, we've been ramping up both from Pavon Central and Eastern Borussia during the course of the year. And we would anticipate similar deliveries to what we've seen in the latter part of Q3, which on average, you know, have been around, you know, 450 tonnes a day from... from Eastern Boise and around 1,000 tons a day from Pavon.

Okay. Well, that's quite good, and I think that bodes well for the fourth quarter and your guidance for the year. So thanks for that color. Darren, my second question is related to your announcement prior to the earnings release about the NCIB. that you guys have put up. My question really is can you provide some commentary on why you chose an NCIB or share buybacks as your vehicle for shareholder returns as opposed to something like a dividend?

Yeah, no, thanks, Brooke. And I guess it's not a decision in isolation. You know, as we've demonstrated over the last four years, I think we've generated significant shareholder returns from our organic investment into exploration and then subsequent development of the assets if we've demonstrated that we can take things from discovery to production in, you know, in really in months rather than years. Yeah, that remains our focus is to continue along that path. That's our number one priority in terms of use of funds. However, as we've demonstrated the ability to do that and can currently build cash, we're in the luxurious position of having that large cash field and so we with the board, had discussions around what's the best use of that? And one of the things we identified is that establishing an NCIV puts us in a position to be opportunistic if such an opportunity presents to be able to leverage off a blip in the share price, for example. It's not at the expense of or in preference to a dividend. It's just that having that vehicle in place allows us to be opportunistic, as we will with any investment. As you're aware, we're We're thoughtful, methodical, but remain agile to be able to deploy that cash of whatever provides the best shareholder return. And that's really the basis for it. So it doesn't preempt that we won't do other things. It just says that we're putting these things in place so that we can leverage off it when the opportunity presents.

Okay, no, that's very helpful and clear. So if we continue to see the success and build up of cash and free cash flow every quarter, we might... in addition to an NCIB, we might, in addition to that, see other shareholder returns. That's fair to characterize it that way?

Absolutely. Our single largest focus is to return value to shareholders, and we'll be opportunistic to seize whatever opportunities are presented to us to be able to do that. Absolutely. Perfect. Thanks for that.

And one last one from me, I promise. Just on your reserves at year end, and I know we're not at the end of the year yet, but maybe could you give us some color on do you expect to increase reserves or replace reserves at year end? And what are you thinking in terms of gold price that you're going to be using?

Yeah, no, good questions for again, you know, again, we've got a lot of drilling happening across all the properties. And as we've demonstrated, we've seen lots of exploration success and which kind of leads a good segue into where our programs have been morphing to during the course of the year. The focus over the last couple of years has been more competence and conversion to establish that reserve base. And as we've highlighted, we've had nearly a threefold increase in reserves after producing 750,000 ounces, which is a great position to put us in. Now, as we start to look at identifying mineral inventory and then subsequently progressing that through to resources, There's a little bit of work that needs to be done in the end of the year to be able to foreshadow what that looks like. But I would anticipate that reserves at consolidated at the end of the year will not be any less than what they were this year with the same gold price.

Great. That's great news. Thanks for that, Darren. That's it for me. I'll pass it on.

Appreciate it.

One moment for our next question, please. The next question comes from the line of Justin Stevens with PI Financial Corp. The line is now open.

Hey, Erin and team. Congrats on a pretty solid quarter. I'm making a habit of these, which is nice to see. Mostly, it's just a couple of ones from me. Obviously, you know, you've done pretty well in terms of your costs, sort of metrics here. know the the tracking on the high end of production relatively well in terms of those costs uh anything that's sort of been pushed out um from a cost perspective uh into the the back part of this year or into 24 here is it mostly been sort of pulling things forward on the development side like at eastern barosi yeah justin is that like a trick question man it's uh no no no appreciate your uh your support and questions there's been

There's been nothing that we've deferred from this year to next. It's more the contrary. We've been opportunistic with the success we've seen at Volcan to actually advance some of our growth capital spend related to land acquisition. So we're stacking the deck in our favor for securing our ability to deliver into expectations in the medium longer term. So yeah, definitely no deferrals. Quite the contrary. And you'll probably see that as you dig through the MD&A. You'll see some increased growth. It's been opportunistic. We've got the cash position. And we continue to build cash even after that further investment.

No, yeah, it's good to see. And that's actually a good segue to my next one. On Vulcan, obviously, nice to see sort of an initial result wrapped around that. And I think that the upside is... just from some of these near-mine targets of labor tide are pretty high. But other than, you know, acquiring service rates, what's sort of needed to be able to bring some of these, you know, either these new open pit targets in to the mine plan? And what's the sort of timeline we'd be looking at there?

Yeah, Justin, it's, you know, Volcan is relatively early in the development cycle. But I would anticipate us being in a position to do ground works out there in 2024. So what that would mean is that between now and then, we'd be going through the consultation and permitting process. So, you know, again, there's nothing we can see there from a permitting perspective that would be different than the other four or five significant permits we've delivered over the last four years and that, you know, within a 12-month period, we should be able to deliver into permits. So it's really about looking at where it sits into the development sequence and use of capital in terms of what we bring in where. And it's a first world problem to have, but as we've seen, you know, significant exploration success over the last, well, number of years, but in particular, further afield over the last six months, it's assessing what fits where into the program. So, no, no, it's a good problem to have in a very positive way. But, you know, Volcan is a very interesting opportunity and as you've highlighted, even though it may not have the bonanza grades that we see at Panteon Norte, for example, is that being very, very close to the mill, near-surface oxide, moderate strip ratios, it can become very accretive from a cash flow perspective, given the million tons of surplus capacity which remains at Libertad.

For sure. And just another one in terms of other targets here. Obviously, nice to see those results of the Habley Underground just over a week ago, I guess. Any plans? I mean, I think, you know, that little underground operation has enough track in front of the train for the near term here. But how are you sort of looking at maybe accessing, being able to drill a bit deeper below

uh you know uh with the existing sort of drill holes now and maybe densifying that drilling to to pull it in uh because obviously you know enough enough hits like that uh could could go quite a long ways to building some inventory there yeah no absolutely and again you know the focus of havali is is that uh the operations team have done a tremendous job at assuring up that asset over the last year and then with the exploration success we've seen We're now starting to talk about putting track in front of that train. I would anticipate that we would probably foreshadow the Hoverley Underground coming to conclusion sometime in 2024. I would expect with these results that we'll comfortably see another year or two added to it with what we know today, given that the intercepts we see are very close to existing development. We're talking about months to get to it, not years. from a development perspective.

Got it. And I mean, last one, obviously, I know you're still probably putting numbers together and the like, but given what we've seen in the exploration success, I think I'm pretty comfortable in assuming that your exploration budget is going to stay relatively high through 2024, just to be able to keep building out and following up on all these solid hits here. I'm assuming that's not too far off base?

No, absolutely, absolutely. As we've demonstrated that investing into our assets has created significant value for us and shareholders. So we'll continue along that approach. I think the most significant investment that we can make outside of maintaining our social license is in keeping track in front of the train, which comes from the drill bit. So no, we're absolutely committed to that. And if we ever found ourselves in a situation where we had to skimp on costs, that would be the last place we'd look to cut. Sounds great. That's it for me.

Thanks, guys.

Thank you. Thank you. I would now like to turn the conference back to the Mary Hall President and Chief Executive Officer for closing remarks.

Thank you, operator. I'd like to thank all of our shareholders for their continued support and everyone's participation in the call this morning and the questions we received. As always, Ryan and I and the entire leadership are available if you have any further questions as you read through the documentation. And with that, Take care. Have a wonderful day. And back to you, operator.

This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.