Calibre Mining Corp.

Hello and welcome to the Caliber Mining Corp 2024 Quarter 1 Conference Call and Valentine Goldmine Update. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. And to withdraw from the queue, please press star then queue. As a reminder, this conference is being recorded. I would now like to hand the call to Ryan King. 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, 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 the Q1 2024 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 Svlet, Senior Vice President and Chief Financial Officer, And Tom Gallo, Senior Vice President of Growth. We will be providing comments on our first quarter 2024 results and Valentine Goldmine update following yesterday's news releases. We will discuss capital costs and project updates, after which we'll be happy to take questions. The slide deck we will be referencing is available on our website at calibremining.com under the events section. You can also click on the webcast to join the live presentation. With that, I'll turn the call over to Derek.

Thanks, Ryan. Moving to slide three. Good morning, and thank you for taking the time to join us today. Firstly, I would like to thank all Calibre employees and business partners for their continued efforts and focus during what has been a very busy quarter. First, I want to acknowledge and I'm proud to make particular mention of the Valentine team for their outstanding safety performance, which was recognised on Monday when the Canadian Institute of Mining, Medallion and Petroleum awarded the team with the prestigious John T. Ryan National Safety Award. A significant achievement and well done to the entire team. Moving to Q1, consistent with H1 expectations, the company delivered 61,700 ounces of gold in the first quarter. With higher tons mined and processed, costs were as anticipated, higher than full-year expectations. Additionally, with the team in Nicaragua making good progress in the open pits, we are 20% ahead on total material movement, which is a little double-edged as it results in higher Q1 spend but de-risked production in H2. As we have consistently foreshadowed, Gold production is H2 weighted, and I'm confident in reaffirming our four-year guidance. Turning to slide four, our vision at Caliber has always been to establish a quality mid-tier gold producer by generating strong operating cash flows to fund organic growth while seeking accretive opportunities to diversify and grow. We have consistently delivered into this vision, never more so than now, with the acquisition of the Valentine Gold Mine in Newfoundland and Labrador. With first gold scheduled in Q2 2025, Ballantyne will establish Calibre as a quality mid-tier gold producer in the Americas, providing a compelling re-rate opportunity for all shareholders. I'm pleased to report the construction of our fully funded Ballantyne Goldmine is 64% complete, and we have progressed detailed engineering to 98%. Additionally, the team has completed the tailings management facility starter dam, received engineer of record sign-off and commenced liner placement, which is a significant milestone in the project development. Delivered critical path items, including mills and motors to Newfoundland. We recently enclosed the mill building. We've connected site to permanent hydroelectric power. We've awarded all major outstanding construction contracts. employed an experienced and highly motivated operations leadership team, and awarded a contract for and advanced pre-commissioning and commissioning activities. These project optimization and de-risking efforts, combined with accelerating operational and a portion of Phase 2 capital expansion, results in an initial capital cost of $653 million Canadian dollars, $145 million Canadian increased over Marathon Gold's Q3 2023 update. With $279 million Canadian in initial project capital remaining to be spent and $400 million Canadian in cash and restricted cash, the bill is fully funded. Moving to slide five, the $145 million Canadian is consistent with our pre-acquisition due diligence and incorporates underestimated costs, inflationary impacts, and capital advance by caliber to de-risk delivery and to support future operations. The increase versus marathons Q3 2023 estimate primarily consists of three components. Schedule and cost estimation of approximately $70 million, which relates to improved quantity, cost, and time estimates with engineering now at 98%, progressed from 60%, which was the basis of the Q3 2023 estimate. Secondly, $40 million attributable to Calibre's project optimisation and de-risking efforts, which focus on ensuring that the facility as designed delivers its full potential as we transition from construction to operations. This investment includes pre-commissioning and commissioning planning and activities, mill and site modifications, access road upgrades, and importantly, advancing deployment of the operations team. Finally, Calibre is advancing operational and phase two capital expansion of 35 NIA, which is more opportunistic in nature and includes investment in infrastructure that will positively impact operations. This includes commencing construction of permanent mobile equipment maintenance facilities, process plant effluent, treatment plant, and accommodation upgrades. A more strategic component of this investment advances a portion of the Phase 2 expansion capital. In the feasibility study, Phase 2 is the planned plant expansion in years 3 and 4, which increases throughput to 4 million tonnes per year. We are early in the analysis, but given the current SAG ball circuit design, we believe there may be opportunity to increase throughput in advance of a plant expansion. A key component to enable any increased throughput would be to ensure the capacity in the CIL circuit and therefore we have included additional tankage as anticipated in the Phase 2 design. We've commenced a scoping study to review process plant expansion options focused on assessing comminution circuit alternatives It's early in the analysis, but I'm encouraged that there are combinations of secondary crushing and grinding options which may present even higher return options than the feasibility study envisaged phase two. Which is a good segue into exploration, as having an appreciation of the potential scope of the district will influence scale when assessing processing expansion opportunities. The Valentine Gold Mine and surrounding property offers a robust resource base and discovery opportunities from an extremely prospective array of exploration targets with similar geology to the Prolific Valhalla and Timmins camps in the Abitibi Gold Belt. I'll now pass it to Tom to provide additional color on Valentine's exciting exploration potential.

Thanks, Darren. Turning to slide six. The 250-kilometer square Valentine land package offers us a considerable resource base from which to grow. The discovery potential, in our view, is high, with an underexplored orogenic setting. The 2024 exploration program will include resource expansion and discovery drilling, backed by a robust geoscience initiative, similar to what we've employed in our other jurisdictions, and will focus on high-definition property-wide geophysics and LIDAR survey, enhanced prospecting, and a comprehensive till sampling program. Several targets which have never been drilled but are a high priority for Caliber include Eastern Arm, Northwest Contact, Western Peninsula, and Marathon Northeast. In addition to the regional potential, it is important to highlight the recently completed ore control drilling at Leprechaun which bolsters our confidence in model performance. The results substantiate the mineral reserve estimate in the first five benches the drilling indicating an increase in ore tons of 15% and overall gold ounces of 12%. Additionally, high-grade gold mineralization was discovered on the southwest edge of the pit, highlighting strong resource expansion potential given the limited drilling along the Valentine Lake shear zone toward the Frank deposit. Phase I diamond drilling has now been completed. We are scheduled to follow up along the Frank Leprechaun corridor with a more detailed program in the fall. Overall, early-stage drill-ready targets packed by surface anomalies, which have never been drilled, combined with near-mine expansion potential, demonstrate the robust nature of this mineral system. The Valentine Lake Shear Zone and Northwest Contact Shear Zone combine for up to 64 kilometers of high-potential opportunity, with over 5 million ounces of gold hosted. As we quickly increase our knowledge base throughout the field season, and with incoming drill hole assays, I would anticipate this could lead to a much larger drill program in the future. With that, I'll turn it back over to Darren.

Thanks, Tom. Moving to slide seven. With construction at 64% and detailed engineering at 98%, Calibre is well positioned to responsibly deliver the fully funded Valentine gold mine. With first goal scheduled in Q2 2025, the delivery of Valentine presents a paradigm shift for Caliber as we transition to a quality mid-tier gold producer, which will unlock significant value for all stakeholders. With that, we're happy to take questions, and I'll pass it back to the operator.

Thank you very much. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, you may press star then two. As a reminder, that's star then one to ask a question.

We will pause momentarily to assemble our roster. Today's first question comes from Ingrid Rico with Stifel.

Please go ahead.

Hi, good morning, Darren and team. Thank you for taking my questions. I'll probably start with just sort of on the capital. You gave us the update on a lot of the major contracts have been awarded. So, Darren, what's sort of outstanding on the critical path right now? What should we be looking for over the next six months?

Yeah, hi Ingrid, good morning. Firstly, thanks for initiating coverage there in Q1. It is appreciated and acknowledged. Thanks. It's well done. In terms of outstanding major items, as you kind of mentioned, we're well progressed on the engineering. We're three quarters built. The mills, motors are on site. In terms of major deliverables, it's probably in relation to the conveyors, which come late in the summer. But, again, there's plenty of time for those deliveries, so I don't see them as really critical paths. The major contracts in terms of the SMP, so structural, mechanical and piping, was being issued. Electrical instrumentation is... We've got a letter of intent and we're in the final stages of issuing that contract. Bringing together those groups of people and scheduling that out through the summit of all things together is probably a critical path, so it's not so much delivery of, It's more about assembling the Meccano set, if you will. And that's where the team are focused on now, is that it's now into truly the execution of bolting things together. The major civil works are done with snivelling de-risk from a geotechnical perspective. The mill building is now enclosed. So now it's really that fine detail about bolting all the things together and the coordination of a significant number of people who do all come together during the construction season here in the summer.

So I think it's more around execution of those works than it is critical path in terms of delivery of bits and bobs.

Excellent. And on the operation readiness, you've talked about having now the leadership team, but how is the sort of recruitment process going? What are sort of the targets over the next few months to get fully staffed for operations?

Yeah, thanks, Ingrid. And I guess if I cycle back in time to when we closed the transaction, probably one of the concerns I had was assembling the leadership team. And we've had excellent take-up over the last three months. And again, we had a good core of people to bolt on with Daniel and Mike at sites. But now if we think about the 10 most senior people in the operation, all of those positions have currently been employed. So if we think of mine managers, mill managers, process managers, construction managers into the operations phase, business manager, health and safety, all of those positions are now filled. And we've done that over the last couple of months, which is unnervingly pleasing given the apparent shortage of labour in Canada. So I think that attracting people into the province has been easier than anticipated and all of the top ten or nine of the top ten are actually have actually or are relocating to Grand Falls of Windsor and central Newfoundland as well so they'll be living local and commuting in so that's a great thing we know we've got a significant resource base in Newfoundland to hire from in terms of operators and millwrights and mechanics and those sort of things so hiring into that space There is a dearth of talent there and there's obviously a significant number of people who work turnarounds who are wanting to come back. So I think the challenge we'll probably have on a labour perspective is some disappointment that we won't be able to provide everyone with the job they want. So I'm feeling actually very confident in that space. I'll be back on site here in another week for a couple of weeks as we kind of assemble the team and do a little bit of Calibre 101, bring them all together and and make sure they've got what they need to be able to deliver into the expectations here in Q1. But we've seen great pickup with the project team. And I think importantly, having a group like RCC come in as well on the pre-commissioning and commissioning to ensure that those two groups come together is a critical component as well. So a long-winded answer to a pretty short question there, Ingrid, but... I'm very pleased with the progress we've made on hiring. I'm very pleased with the quality of people we've got. And also very motivated in the fact that the relocation to Newfoundland and taking up the opportunity to live in a great place. So yeah, feeling more and more comfortable with every day that goes forward.

That's great to hear and thank you for all that sort of update. If I may ask just one last question. on mining. I wanted to ask on Barrie. I understand that the federal permit is still outstanding. Can you sort of tell us a little bit of what's the latest on that and when are you expecting to receive it? And I guess based on your sort of baseline schedule, when do you need to start mining, Barrie?

Okay. Yeah, no, good questions. And Barrie, you know, The original intent, I think, was that Barrie was going to start mining either late this year or very early in 2025. We're confident in the permitting process. You know, it's been through the provincial EA review and they've got early release from memory. I think that was in October of 2023. It then came across to the federal piece. The federal group, which again, I'll see if I can get the acronym correct. I think it's IAAC, which is Impact Assessment Agency of Canada. They completed their public comment period here in end of March, which is a very good sign as well. because it kind of foreshadows their intention to approve. So, no, I think it's all kind of going as planned. I mean, we haven't seen any significant public comment from our external parties as part of the federal review. I think the federal government are working through some issues with respect to process, because I believe there was a comment made by the Supreme Court that they thought the process was overreaching right, which is, you know, which is great. I mean, I'd rather be overreached by a regulator and make sure that we're doing the right things to ensure that, you know, our stakeholders are protected, but I don't anticipate that to materially slow down the approval process. So, and this relates to all projects in Canada, right? It's not just us. So, no, I'm still confident in, but now to say, well, you know, there's always risk and, you know, we're kind of worried we tend to be a little conservative in the approach, which is probably not a bad way to be. So when we did the re-baselining, and as we've continued discussions with our senior debt folks as well, is that I said, look, let's just take it out of the discussion context and we'll push very out from a commencement until early Q3 of 2025. And then it's an opportunity to drag it forward if we see the opportunity and produce a little bit more metal a little earlier, which is never a bad thing. So, yeah, I'm not concerned about it, but it absolutely is a focus to ensure that we deliver into expectations. But we've de-risked the schedule by taking it out of contention, so that way it's a positive when it comes back in as opposed to pushing it out.

Great. Thank you, Darren.

Sorry, actually, just as a layer on that, as I think out loud, as being a being kind of a more technical person as well, Ingrid, is that, you know, we think about the 2025 production schedule and, you know, berry was one component of the three and, you know, basically pushing the production, producing berry out, de-risks that production profile. But, you know, with leprechaun and marathon producing as planned, you know, that's significantly, I won't say de-risks, but delivers into the expectations. And from memory, and again, It's been a while since I've cut little shapes out of big shapes in mine site. But I think we're looking at probably two to two and a half million tons of inventory in stockpile at the end of 2025. So, you know, given those sorts of things you're likely to see on startup, we've got more than adequate capacity to offset any of those bips and bobs that come up.

Well, I appreciate that. Thank you, Ryan, for passing along that question. I was looking for some of that sort of color last night. Thank you.

Appreciate it. Thanks, Ingrid. Appreciate your support.

Thank you. The next question is from Don DeMarco with National Bank Financial. Please go ahead.

Thank you, operator. And, yeah, good morning, Darren and team. Congratulations on all the de-risking with this Valentine update. So first question, by increasing the throughput to 3 million tonnes per year, and I get it that this probably still has to be subject to its own de-risking and improving, but how would you expect that to change the production profile versus the feasibility study in the first few years?

Yeah, Don, 3 million tonnes, that sounds like a good number. You know, again, that's part of what we're working through right now, right, is that is that the design work that was done initially with sag ball you know is very very solid it's good quality product good work um you know as we go through some of the looking at the analysis for that you know grinding off grinding crushing optimization in 2025 you know i think there will be potential to exceed what would be that two and a half million ton when that happens I can't necessarily say categorically right now, but I think there is good potential. That's part of the reason why we advanced the phase two capital into this construction build. It's not required to, but adding that 30% increase in tankage positions us well to be able to realize any potential that comes from increased throughput. Yeah, no, we'll work it through as we get closer. And I think that, you know, an important part of what we're looking at now is, you know, for a set of eyes, if you will, looking at the Phase 2 expansion and what that really looks like. I think that as envisaged, it's solid and it's good. But, you know, I think that given the configuration of the crushing and the grinding circuit, there's going to be options to look at, you know, maybe it's a secondary stage crusher and tertiary stage milling, or maybe it's a... a pebble crusher after the sag, and increase combination capacity and push those tons as well earlier. So we'll work it through, and as we have a higher degree of confidence, we'll start to talk more openly about it. But as I see it right now, I'm pretty confident in what we see, and anything we do to it will obviously improve the positioning of Valentine as we transition into production here in 2025. Okay. Okay.

Okay, well, good to see that upside there. And we'll look for more color as you get closer to that. So you got the contract with RCC for commissioning and pre-commissioning and commissioning. Can you tell us a little bit about this? I mean, maybe the scope of work or your experience working with these guys or some of the other, the work they've done in the past and so on?

Yeah, absolutely. It's not typical. of companies our size or projects this size to have a group like RCC involved. Yeah, they're a quality outfit. We've got Tim McKay and he's assembling a team or assembled a team to be able to support us. And the real focus here is to bridge what is the project team who are focused on scope, schedule and budget on getting to the delivery room. And then we've got an operations team who want to pick the child up once it's delivered and raise it into a responsible adult. Yet this group of people are really ensuring that that transition and handover happens well. And, you know, operators are great at operating clients, but putting in place the processes by which you're going to operate to ensure that you can realise the full potential of the asset is not always a strong point, particularly as they're hiring teams of people. So really, as I see it, that's what the focus of this group is, is to help us. And it's a material cost. I mean, we're talking the pre-commissioning, commissioning activities are... in the order of, in Canadian dollars, probably around $9 to $10 million. I mean, it's a significant commitment we're making, but it significantly de-risks the medium-longer term. The last exposure I had with this group of people was actually at Boddington. They did the pre-commissioning commission works at Boddington in Australia when we delivered that asset. So, yeah, it's a very experienced group of people. This is what they do for a living. They're not engineers. They don't do... They're not a vain and do process optimization and those sort of things. It's not that sort of group. All they do is this. This is their bread and butter. So a good group of people. Great to have them on board. And, you know, we've got a great projects team to deliver the asset. We've got a great operations team to be able to run the asset. And I think that adding this third leg to the stool will make for a very stable chair.

Okay. It's good to see there's that de-risking there then. And maybe just a final question. Is this discovery along the southwest edge of the leprechaun pit? You know, we've seen some press leaves, some intercepts are looking encouraging. But does this have potential to be mined early in the mine life if it continues to be proven out and it's converted to reserves and so on?

Well, I think there's a couple of parts to this, and I'll maybe throw it over to Tom if there's anything I've missed. But, you know, some of what was identified in that Valentine's Day release is that will be mined as a consequence of, because it's inside of the pit. It wasn't actually identified as, well, two parts. Some of it was identified as inferred, which we've improved the confidence to a measured indicator category. Some of it was never identified. So it's considered as waste. So that waste now becomes ore. So, you know, we don't actually process measured indicator in 2P. We process whatever ore presents out of the ground. So that means that'll end up in as available waste. grist for the mill, as it were. But as it kind of bleeds off there to the southwest towards Frank, I think that, you know, Tom and the exploration guys are very encouraged by what they see in terms of the ability to expand into. Tom, is there anything you'd layer in there? Because actually Tom's not in the room here. He's actually in Nicaragua this week.

Yeah, no, I think you covered it. I mean, I think it is important to understand that, you know, we will have ounces sort of you know, by default come into the mine plan because they were not captured previously. And so they'll, you know, do things like lower the strip ratio in places or just add bonus ounces. And that's part of why we saw that increase in, in tonnage, um, and subsequently overall ounces in that, in that great control, because the tonnage actually comes from things that were not categorized to the Southwest. You know, once you get outside the bounds of the pit, um, You know, there's still considerable work that needs to be done from a drilling perspective. Definitely encouraged with what we've seen visually. Don't have all the assays in to speak about yet from our first phase of diamond drilling that was completed in Q1. But, of course, this is a very visual ore body, so we can see, you know, where the mineralization should be. We do have indications on surface as well of that same mineralization continuing fairly... regularly down to frank where we where we did that drilling so again there's there's some follow-up work to do there but it's very consistent on from from what has been you know what we've known and uh to be the let's call it marathon style qtp quartz tourmaline pyrite in the trondamite um mineralization right and i followed this story as an analyst back since 2017 so it's it's very consistent from from from what we've what we've been familiar with

Okay, well, thanks for that, Tom and Darren. And that's all for me. Good luck with the rest of the build.

Okay, thanks, Tom. Appreciate your support and coverage.

Thank you very much. This concludes our question and answer session. I would now like to turn the call back over to President and CEO Darren Hall for closing remarks.

Thanks, MJ. I'd like to thank all of our shareholders for their continued support. And in particular, your participation and questions this morning, it is appreciated. Thank you for taking the time. I know it's a busy time of the year for everyone. As always, Ryan and I and the leadership team are available if you have any further questions. Take care. Have a safe and enjoyable day. And back to you, MJ.

Thank you very much. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect and have a nice day.