Calibre releases expected gold production data CALIBRE RELEASES MULTI-YEAR PRODUCTION AND COST OUTLOOK, INCLUDING INITIAL LIBERTAD COMPLEX PRELIMINARY ECONOMIC ASSESSMENT
Calibre Mining Corp. has provided its initial multiyear outlook, which includes the initial Libertad complex preliminary economic assessment (PEA).
The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. All figures are expressed in United States dollars.
LIBERTAD COMPLEX: PEA HIGHLIGHTS
2021 to 2023 annual average
Gold production: 120,000 ounces
All-In Sustaining Costs1 ("AISC"): $906 per ounce
After-tax, free cash flow: $69 million (at $1,800 gold)
2021 to 2025 cumulative, after-tax free cash flow
$216 million at $1,500 gold
$319 million at $1,800 gold
Of the Mineral Resources reviewed for this plan, ~60% of the Indicated Mineral Resources and ~40% of the Inferred Mineral Resources were included in the PEA. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
Additional technical studies (drilling, engineering, and mine design) are required to better understand the Mineral Resources excluded from the PEA
Exploration
No drilling results or data after December 31, 2018 are included
Other than Jabali and Panteon Underground have more current drilling results and a mid-2020 effective date
Near-mine and infill drilling programs designed to provide additional mill feed
2021 to 2025 milling capacity ~1,500,000 average annual tonnes of surplus mill capacity (installed, permitted and paid for) Underpins potential for significant organic production growth in the near-term
LIMON COMPLEX (OPEN PIT MATERIAL ONLY): 10-YEAR OUTLOOK
Average annual Gold production: 50,000 {୿ –} 70,000 ounces
AISC1: $900 - $1,100 per ounce
Open Pit Probable Mineral Reserves (as at December 31, 2019)
1.4 million tonnes grading 4.25 g/t gold containing 195,000 ounces mined in 2020-2023
Additional Open Pit Mineral Resources (as at December 31, 2019) have the potential to extend mine life through 2031
Open Pit Indicated Mineral Resources exclusive of Mineral Reserves
0.5 million tonnes grading 4.29 g/t gold containing 62,000 ounces
Open Pit Inferred Mineral Resources
3.8 million tonnes grading 5.49 g/t gold containing 679,000 ounces
20,000-meter infill drilling program underway at Limon Open Pits
Anticipating majority of Inferred Mineral Resources will be upgraded to Indicated Mineral Resources when year-end 2020 reserves and resources are announced
Russell Ball, Chief Executive Officer of Calibre stated: "Since completing the acquisition of Limon and Libertad just ten months ago, we have made a number of changes that position us to deliver significant value through the implementation of our 'hub-and-spoke' operating philosophy. With the increased investment in near-mine exploration and infill drilling, the recent restart of operations at Jabali underground, receipt of the development permit for Pavon Norte and additional Limon ore available, we have a number of opportunities in front of us to utilize more of the surplus mill capacity at our Libertad Complex."
"The initial Libertad PEA provides a 'snapshot' into our view of the next three years based on the drilling data and mineral inventory we acquired from B2Gold last October. We expect to provide an updated 'snapshot' of the multi-year outlook for both Limon and Libertad in the second quarter of 2021."
TABLE 1 {ᐹ –} LIBERTAD COMPLEX: PEA FINANCIAL SENSITIVITY MODEL ($ MILLION, AFTER-TAX)
The financial models in the PEA were prepared by SLR Consulting (Canada) Ltd. (formerly Roscoe Postle Associates Inc.) using a base case gold price of $1,500 per ounce. The PEA includes metal price sensitivities detailed in the technical report which is expected to be published on www.sedar.com in early September.
Metal Price Sensitivities (2021 - 2025)
Gold Price Assumption ($/ounce) $ 1,500 $ 1,800 $ 2,000
Cumulative after-tax free cash flow $216 $319 $386
NPV5% $196 $290 $353
TABLE 2 - LIBERTAD COMPLEX: PEA PRODUCTION AND COST OUTLOOK
2021 2022 2023 2024 2025 Total
Milled (tonnes) 804,000 977,000 1,165,000 413,000 254,000 3,613,000
Grade (g/t) 5.18 4.06 3.39 6.35 4.99 4.42
Gold Production (ounces) 122,000 118,000 118,000 79,000 38,000 476,000
Total Cash Costs1 ($/ounce) $748 $788 $768 $614 $798 $736
AISC1 ($/ounce) $1,019 $851 $857 $614 $798 $847
The PEA is based on Indicated and Inferred Mineral Resources from the following:
Libertad: Jabali Antena open pit, Jabali underground and San Antonio open pit;
Limon (trucked to Libertad Complex): Veta Nueva underground and Santa Pancha Complex (including Panteon) underground; and
Pavon (trucked to Libertad Complex): Pavon Norte and Pavon Central open pits.
COSTS
The PEA costs are based on historical unit costs and productivities and do not consider current supply chain management opportunities. The reported AISC1 includes development, G&A, mining, processing, and ore transportation costs. The PEA is preliminary in nature, that it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized. Further, Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
LIMON COMPLEX: OPPORTUNITIES
The implementation of our 'hub-and-spoke' operating philosophy has been a key driver in advancing opportunities to positively impact the mine life and Net Asset Value at the Libertad and Limon complexes. Integrating Limon's 0.5 million and Libertad's 2.2 million tonne per annum milling capacity, allows us to maximize value by transporting and processing ore from numerous satellite deposits.
The outlook at the Limon Complex provides a conservative snapshot of the production and cost profiles for only the open pit Mineral Reserves, with the potential for more mine life based on additional Mineral Resources. These Mineral Resource estimates do not consider any exploration drilling results after 2018, except for the Panteon Underground deposit which is part of the Santa Pancha underground mine.
Based on the Mineral Reserves and expected conversion of the Mineral Resources, the outlook for the Limon Complex is expected to process 500,000 tonnes of mill feed and deliver between 50,000 and 70,000 ounces of gold production a year at AISC1 of between $900 and $1,100 per ounce for the next 10 years (beginning in 2021).
The Limon Complex is assumed to process mill feed mined from the Limon open pits and this provides the opportunity to transport mill feed from the underground operations at Santa Pancha (including Panteon) and Veta Nueva to the Libertad Complex for processing.
LIBERTAD COMPLEX: OPPORTUNITIES
In October 2019, Calibre completed the purchase of the Limon and Libertad gold mines, the Pavon gold project and additional mineral concessions in Nicaragua from B2Gold Corp. At that time, the focus was on Limon and the recent discovery at Limon Central, while the consensus view was that Libertad had less than a year of remaining mill feed and was approaching closure and reclamation. By implementing our 'hub-and-spoke' operating philosophy and by developing the Pavon gold project, the Libertad Complex processing life has been significantly extended and is now expected to be a major source of free cash flow over the next five years.
The PEA presents what we believe is a conservative approach to Mineral Resource inclusion, with no allowance for future exploration success which could contribute additional feed to the Libertad Complex. The PEA reflects average annual gold production of 100,000 ounces at AISC1 of $846 per ounce for the five-year period from 2021 to 2025.
The cumulative, five-year after tax cashflow is estimated at $216 million ($1,500 gold) and $319 million ($1,800 gold). The scenario is based on an average mill throughput rate of 0.7 million tonnes per annum, leaving approximately 1.5 million tonnes of surplus annual mill capacity as a significant opportunity for organic growth via further conversion of Mineral Resources, exploration success, artisanal ore purchases or toll milling.