Calibre Mining Corp (TSE: CXB) (OTCMKTS: CXBMF) downgraded its production guidance for 2024 after production missed expectations in the third quarter.
Announced during a quarterly update, Calibre now anticipates its full year guidance to fall within the range of 230,000 ounces and 240,000 ounces.
Consolidated gold sales for Q3 reached 46,076 ounces, with 36,427 ounces coming from Nicaragua and 9,649 ounces from Nevada. The total cash cost (TCC) for the quarter averaged USD$1,580 per ounce, with Nicaragua at USD$1,615 per ounce and Nevada at USD$1,451 per ounce. The all-in sustaining cost (AISC) for Q3 averaged USD$1,946 per ounce, with Nicaragua reporting USD$1,880 per ounce and Nevada USD$1,813 per ounce.
Furthermore, year-to-date (YTD) gold sales totalled 166,200 ounces, with 140,646 ounces sold in Nicaragua and 25,554 ounces in Nevada. The YTD TCC averaged USD$1,379 per ounce, with Nicaragua at USD$1,364 per ounce and Nevada at USD$1,463 per ounce. The YTD AISC averaged USD$1,656 per ounce, with Nicaragua at USD$1,554 per ounce and Nevada at USD$1,734 per ounce.
Nicaragua’s production was lower than expected due to changes in mine sequencing at Limon Norte, discussed in Q2. Additionally, the Volcan open pit delivered less ore than budgeted. In response, full-year production now expected to fall 20,000 ounces below target due to extensive historical artisanal mining. Infill drilling has since confirmed the deposit model, and ore tonnes and grade from Volcan are now in line with expectations. In Nevada, lower stacked ore tonnes have reduced annual metal production by approximately 5,000 ounces.
Valentine project passed 81% completion by Sept 30
Nicaragua’s Q4 mine plans are set to deliver significantly higher ore tonnes, with production expected to reach 60,000 to 70,000 ounces. Despite increasing ore haulage to Libertad by 30 per cent, reaching 3,000 tonnes per day in Q4, the company expects stockpiles to grow by approximately 30,000 ounces by year-end, available for processing in 2025.
Reflecting year-to-date performance, full-year spending is anticipated to remain within budget, though lower sales volumes will result in higher total cash costs and AISC for 2024. The company has revised its consolidated TCC forecast to USD$1,300 to USD$1,350 per ounce and its consolidated AISC to USD$1,550 to USD$1,600 per ounce.
At the Valentine project, construction surpassed 81 per cent completion as of September 30, 2024. The tailings management facility is complete and ready to receive water, and the tanks for the CIL leaching area are nearing completion.
The company said that construction of the reclaim tunnel and coarse ore stockpile is progressing. Additionally, the primary crusher installation is well advanced, and work on the overland conveyer has begun. Pre-commissioning activities are also underway. By September 30, 2024, Calibre had incurred costs of CAD$547 million for the project. The estimated initial project capital has risen to approximately CAD$744 million. This has left a remaining cost of CAD$197 million to complete, which includes about CAD$20 million in contingency.
Q3 gold production decrease owed to higher artisanal mining activity
Most of the capital increase stems from contractor underperformance. This has ended up requiring additional manpower, temporary camp accommodation, and extended time for certain activities.
Around 30 per cent of the increase is due to underestimations in construction materials and the scope of site infrastructure. Despite these challenges, Calibre had built in time contingencies and remains confident in delivering first gold by Q2 2025.
Darren Hall, president and CEO of Calibre, attributed the Q3 production shortfall to higher-than-expected historical artisanal mining activity at the Volcan open pit and mine sequencing at Limon. The problem, evidently, is already fixed, however. Ore tonnage and grades at Volcan have aligned with expectations and the deposit model has been confirmed by infill drilling.
“We are guiding to finish 2024 approximately 18 per cent below the midpoint of our original production guidance, the 30,000 ounce stockpile positions us well for a strong close to the year and a solid start to 2025,” said Hall.
However, Hall said that construction of the multi-million-ounce Valentine Gold Mine is progressing well. It reached 81 per cent completion by the end of September. Some cost pressures arose mainly due to contractor performance, which lead to increased manpower and costs. These problems have been addressed.
The project is confidently moving toward mechanical and electrical completion by early Q1 2025. Calibre has CAD$300 million in cash and CAD$197 million remaining to complete the project. The build is fully funded and remains on schedule to produce its first gold in Q2 2025. This marks a crucial step in Calibre’s plan to expand and diversify its production in Canada.
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