Calibre Mining Corp.

Good day and welcome to the Caliber Mining Corp Q1 2025 conference call. 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 1 on your telephone keypad. To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to Ryan King. Please go ahead.

Thank you, operator. Well, 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 2. 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 first quarter and year-end 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 Schumer, SVP and Chief Operating Officer, Daniela Dimitrov, SVP and Chief Financial Officer, and Tom Gallo, Senior Vice President Grove. We will be providing comments on our first quarter 2025 production and cost results and an update on the Valentine Goldmine, after which we will 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. And with that, I'll turn the call over to Darren.

Thanks, Ryan. Moving to slide three. Good morning, everyone, and thank you for joining the call. I'd like to thank our employees and business partners for their continued commitment to quality performance, which was demonstrated by another quarter with no significant community issues, no material environmental events, and a lost time injury frequency rate of less than 0.65 events per million exposure hours. Before getting into the quarter, I would like to thank Calibis shareholders for approving the merger with Equinox Gold. Through an enhanced scale, a diversified asset base and new high quality Canadian production, this merger is well positioned to deliver greater value than either company could have achieved independently. I value the confidence you placed in the team and we remain committed to operational excellence and execution as we take this next strategic step in value creation. Q1 marked a strong start to the year, delivering 71,000 ounces of gold at below budget costs, positioning the company well to achieve the upper end of 2025 production guidance of 230,000 to 280,000 ounces before any production from Valentine. In addition to delivering Valentine, Atlantic Canada's largest gold mine, this year will be noteworthy for exploration with a 200,000 meter company-wide drilling program underway, the largest in Calibus history. We're excited about the recent discovery drilling at Valentine's Frank Zone, and continued success at Le Mans VTM Corridor, which both have the potential to meaningfully increase mineral resources. Moving to slide four and Valentine. I appreciate the efforts and dedication of the entire team in responsibly progressing Valentine as it enters its final stages of construction. However, it hasn't been without challenges, with first gold now expected by the end of Q3. The delay was due to lower than planned productivity and minus scope growth, which has resulted in a $110 million Canadian increase to the initial project capital since our October 2024 update of $744 million. Approximately 75% of the capital increase is attributable to the scheduled extension and 25% related to scope, growth and quantity. It is important to note that at the end of April, initial project capital remains fully funded with $280 million Canadian in cash and $101 million Canadian remaining to be incurred. Accommodation of factors, which can be simplified to lower than planned productivity, is the reason for the delay and resulting increase. Firstly, approximately 75% of the increase is related to labour and indirect costs associated with performance of our two primary contractors resulting in schedule slip. Our commitment to our provincial benefits agreements obligates a company to develop local partnerships and employ locally. While this has long-term benefits for the region and for Calibre as we move into operations, it has been problematic in completing specialised mechanical and electrical aspects of the build, which require specific skills for relatively short durations. Our commitment to the local benefits agreements and not firing off island required us to provide additional oversight and more critically training. This has been particularly evident where teams transitioned from what were traditional scopes, such as high voltage power line work to more complex industrial systems. This resulted in lower than planned productivity factors and therefore increased numbers which were not adequately reflected in our October estimates. The balance of the increase relates to unidentified scope items and incomplete design packages For example, scope growth occurred in small bore piping, electrical caving, and some instrumentation, all of which added time and cost. However, without the productivity issues, I believe the scope changes would have been adequately covered within the previously allowed contingency. To ensure we deliver our Q3 commitments, we have taken specific actions, not the least of including productivity factors, revised productivity factors into the schedule and timing and costs, but importantly, strengthened contractor oversight and embedded experienced personnel directly into critical scopes, and increased capacity within our owner's team, including the addition of Pierre Lagarde, a seasoned construction professional as project director, specifically focused on the process part to contract manage the final scopes of work. With mass construction materially complete, The focus is on final electrical, piping and instrumentation activities within the plant. The primary crusher has been commissioned with the core source stockpile building well underway and ready to receive material by the end of May. The revised timeline allows additional time for completion of critical system installations and delivery of efficient commissioning process which positions us well for a successful ramp-up and long-term strong operational performance. We've successfully completed balance high and minor mill staffing in preparation for commissioning and ramp-up activities. Importantly, key roles all have commissioning experience, which is critical to a smooth ramp-up and long-term performance. Commissioning activities are progressing well, including no-load motor runs and control system validations, All conveyors have been belted and ready for operation. The system is ready for water introduction to commence plant commissioning. The control room team is working through finalized control narratives and conducting phantom simulations to enhance confidence in proper plant sequencing. Preliminary testing indicates that all systems are communicating effectively with vendor-supplied control. Fallen sag mills and motors have been turned over to the commissioning team for start-up activities, and the primary crusher that has been commissioned is ready to crush and deliver rock to the core store stockpile, which we anticipate in the next month. Moving to slide six. While mining has specifically focused on delivering waste for construction, we have over 400,000 tonnes of mill ore stockpile, which will grow materially through the next quarter. These final steps position us well for safe and efficient transition to first-door and full operations. Moving to slide seven. With a vote in favor, Calibre and Equinox will merge to create Canada's second largest gold-producing company with a diversified Americas portfolio anchored by two high-quality and long-life Canadian gold mines. This strategic consolidation of companies will focus on operational excellence and execution generating greater shareholder value collectively than either company could have independently delivered. New Equinox Gold has the potential to produce over 1.2 million ounces of gold annually when the Greenstone Mine and Valentine Mine operating at capacity. This merger presents significant opportunities to unlock the value of the combined asset base, potentially leading to a substantial equity re-rating. I look forward to working with the combined team to continue our track record of superior execution and delivering on our commitments. With that, we're happy to take questions.