RE:Analyst UpdateA little more on the Scotiabank rating... Latest Research (April 16, 2024):OUR TAKE: Positive. Calibre Mining announced the completion of its C$115M equity financing (~68.5M shares at C$1.68/share including 15% over-allotment option) alongside a US$60M gold prepayment agreement for delivery of ~10% of Calibre’s expected production over the next twelve months (27.6 koz Au at an average of $2,239/oz). Separately, the company reported its Q1/24 preliminary production results having produced 61.8 koz Au, which met our prior estimate of 63.6 koz. CXB is on track to deliver on its 275-300 koz guidance for 2024, with production weighted towards the second half of the year as higher-grade zones are mined, including mining of the Guapinol pit at the Eastern Borosi mine in Nicaragua. We view the financing as positive for CXB shares as both the equity raise and the gold prepay enable the company to benefit from elevated spot pricing and remove a financing overhang from potential budget increases in the development of the Valentine gold project. Following model updates, our C$2.25 PT and SP rating are maintained after updating our valuation to 50% 0.70x NAV5% and 50% 6.0x 2025E CFPS (from 5.0x 2025E CFPS previously).
(Also note that Scotiabank is still using an average gold price of $2,018 in its 2024 projections, $1,950 in its 2025 projections, and $1,800 in its 2026 projections. A little unrealistic in my opinion...)