RE:RE:RE:Well that was a kind of a non event
karead wrote: Agreed. And if the price of gold stays where it is, Q2 will be FAR better.
The market is probably looking at the 2023 guidance on AISC and seeing Q1 higher than guidance, however the company guidance was for 2023 in aggregate, not Q1. Reason for that? A couple I think.
You can see in the MD&A that Libertad mill grades were pretty low at 3.22 gpt in spite of milling high grade from Pavon Central (77,437 tonnes of much higher grade) in Q1. Overall reserve grade of everything that will feed into Libertad in the medium term (classified reserves) is 5.18 gpt. So why the low grade in Q1?
Well in the MD&A there are a few hints:
(Libertad milled) Ore deliveries from Limon in the quarter totalled 110,817 tonnes at an average grade of 1.72 g/t compared to Q1 2022 tonnes of 96,555 at an average grade of 3.28 g/t. and the start of operations at the Pozo Bono pit (25,801 tonnes) Open pit operations during Q1 2023 had a ramp up in both the La Tigra and Pavon Central open pits 110,817 tonnes at 1.72 gpt from Limon is 31% of everything milled at Libertad in Q1. Given the reserves at Limon are 5.5 gpt, the 1.72 gpt material is almost certainly development rock that they could justify shipping to Libertad and milling as it will generate positive cash flow, even if it's not super profitable. No sense letting it go to waste.
Meanwhile the Limon mill head grade aws 4.79 gpt. Pavon Central delivered similar grades to Libertad.
So basically, they milled a bunch of lower profit but cash flow positive development rock through Libertad in Q1, resulting in a lower milled grade and higher AISC.
If we assume Pavon Central is designed for 1,000 tpd (I don't know that for fact, just guessing based on the NR that said Pavon reached 1,000 tpd, so I assume that was the eventual target), then it should deliver 15% more very high grade tonnage in Q2 vs Q1. Eastern Borosi will also start to produce (though probably not at high rates in Q2). Low grade development rock being milled at Libertad will likely also drop off heavily in Q2 and the rest of the year. If we assume that in Q2 or Q3 the company is actually milling Libertard at reserve grade of 5.18 gpt
https://www.calibremining.com/assets/reserves-resources/
that represents
58% more ounces produced out of Libertad on the same cost basis. This is kind of fuzzy math since tonnage milled will drop and the fixed cost aspect isn't accurately reflected on simple gpt vs gpt math, but the bottom line is AISC will drop significantly in the coming quarters with a corresponding increase in profitability; and of course, they're most likely going to hit their AISC guidance in aggregate for 2023, because of all of the above and their track record.
Finally, I have seen some other miners (like Eldorado) attain an averaged realized sale price for their gold in Q1 of $1,932 vs $1,891 for Calibre. If Calibre had realized El Dorado's gold price, earnings would have been just under $0.06 CAD per share in Q1, which was the average consensus analyst earnings. Bit of unfortunate timing I guess on when the sales were done, but water under the bridge.