Week Ending Roundup.
TD Update from Thursday morning.
Event We have updated our forecast to include Calibre's C$100mm bought deal financing. Impact: MIXED This financing will serve to shore up the balance sheet as Calibre develops its newly acquired Valentine project in Newfoundland. We are expecting a full update on the Valentine development in the coming weeks (the first major update since the acquisition) and are using this opportunity to increase our capital cost estimates to reflect recent industry cost pressures as well as potential scope changes. Incorporating the increased cost estimates and this financing, our NAV/sh estimate has declined to C$2.09 from C$2.23 previously.
C$100mm bought deal financing. The underwriters have agreed to purchase 59.6mm shares of Calibre at C$1.68/share, with the option to purchase an additional 8.94mm shares for total potential gross proceeds of C$115mm. The total offering would increase Calibre's share count by ~9%.
The Valentine project was acquired though the Marathon Gold acquisition, which closed on Jan. 24, 2024. The project is expected to be commissioned in H1/2025. Overall project completion stood at 50% at the end of Q3/23.
We have increased our capex estimate to C$620mm (C$430mm remaining as of end Q3/23) which represents an increase of 34% compared to Marathon's Dec. 2022 technical report estimate of C$463mm, and up ~11% from our previous estimate of C$555mm. In addition to cost pressures we are seeing from industry peers (particularly in North America), we believe there will be minor scope changes as Calibre utilizes its stronger balance sheet to de-risk the project and increase exploration spending.
Balance sheet and liquidity: As of Q4/23, we estimate that Calibre (pro-forma) had approximately C$150mm cash, C$245mm restricted cash (Sprott credit facility), with C$355mm remaining capex at Valentine. We estimate total debt of ~C$356mm. We believe the additional gross proceeds of C$100mm will allow the company to continue drawing on the Sprott debt facility and provide a buffer as they complete the Valentine development.
TD Investment Conclusion We are maintaining our BUY recommendation and C$2.50 target price.
Northern Miner Article.
https://www.northernminer.com/news/calibre-raising-100m-to-advance-projects-in-canada-us-and-nicaragua/1003865227/
Aside from the above the financing to complete the project is positive. Upside, assuming Au levels remain high with interest rate cuts may be in the cards? Sorry to see a few disgruntled shareholders who pop up like mushrooms when events they think are negative and looking for some support or chance to complain. Sorry to disappoint and the demand for CXB shares remains strong from brokers who see the valuation being accretive to their positions with small rerating's this week. I'm in for a few more on the dip and done.Looking ahead into May for the Q report with some news events along the way.