Post by
Ridgeback on Aug 13, 2024 8:27am
TD UPDATE
THE TD COWEN INSIGHT Q2/24 results were in line with expectations. CXB has maintained guidance and expects a stronger second half as ore from the Volcan open-pit comes online in Nicaragua. Its key development project, Valentine in Newfoundland, remains on track and fully funded.
Impact: NEUTRAL Q2/24 adjusted EPS of $0.02 was largely in line with our estimate and consensus of $0.03. CFPS was $0.06 vs. our estimate of $0.05 (excluding gold prepay).
Total cash costs: Total cash costs (including royalties) were $1,264/oz, below our estimate of $1,308/oz, on slightly higher-than-forecast grade. We expect costs to decline through the year, with sequential production growth in Nicaragua and Nevada.
Guidance unchanged, with steady improvement expected through 2024: Calibre has maintained its guidance of 275-300koz (TD: 280koz) of gold production at total cash costs of $1,075-$1,175/oz (TD: $1,169/oz). H1 production represents 42% of the annual guidance midpoint. Last week, Calibre announced that it began delivering ore from its Volcan open pit to the Libertad mill approximately 5km away. We expect that Volcan will be a key source of production growth in H2/24.
Valentine remains on track for first gold production in Q2/25. Construction was 77% complete as of July 31 (June 30: 73%), with detailed engineering at 98%. Construction of the SAG, ball mill, and primary crusher is ongoing. As expected, the company received its Federal Environmental approval to develop the Berry deposit.
Balance sheet remains fully funded: Calibre held $128mm of cash and $125mm of restricted cash as of Q2/24, which is more than sufficient to fund the remaining C $211mm of capex at Valentine. We expect that cash flow from operations will also continue to bolster the balance sheet and provide financial flexibility as the company completes Valentine.
We are maintaining our BUY recommendation and C$3.00 target price. We continue to believe Calibre is well-positioned to deliver Valentine to production and create value through the drill bit. Our NAV has declined slightly to C$2.90 (from C$2.97) due to corporate adjustments.