Calibre Gets Upgrade from SPEC Buy to BUY with Higher Price Target
Investors Confidently Re-Rate Shares
The original premise for the sale of the B2 Gold’s operating mines in Nicaragua to Calibre Mining Corp. (TSX: CXB and OTCQX: CXBMF) was to allow a seasoned operating management group the opportunity to unlock value by implementing a strategy to increase production and to organically grow reserves.
The recent quarterly production numbers for CXB clearly show that this process is well underway.
As an example, Canaccord Genuity, a global full-service investment bank that specializes in growth companies, recently reported:
“Q1/20 demonstrated that trucking ore from Pavon to the Libertad mill works in practice and that the Libertad mill is flexible enough to manage different ore types and sources. It also demonstrated that a more integrated shipping strategy of ore from El Limon to La Libertad could boost consolidated production in the future.”
And:
“We are increasing our rating to BUY from SPEC BUY due to strong production and cash growth in Q1. We are also increasing our target to C$1.90 from C$1.50 target price for Calibre Mining following adjustments to our Q1/20 financial estimates incorporating pre released production results.”
It is a credit to the operating group that two significant milestones were achieved in a step-like fashion.
Step 1 involved the smooth transition of the operational hand-over from B2 Gold to CXB.
Step 2, just completed, shows that production could be expanded by employing the “Hub & Spoke” approach for the satellite gold deposits.
Investors will recall another “Hub & Spoke” gold operation in Eastern Canada, Atlantic Gold. The company was taken over by Australian based St. Barbara for C$802 million in 2019. This take-over demonstrated that “Hub & Spoke” gold deposits, once proven to operate successfully, were on the radar as potential targets for mid-cap gold companies looking to grow their businesses.
So what’s next for CXB?
Management is fully engaged in implementing a full restart as soon as conditions permit.
In the meantime, CXB is advancing its technical studies, social investment programs, and permitting activities at the Pavon Project.
Prior to the shutdown of operations, CXB demonstrated good continuity of a new, high-grade resource at Panteon, part of the El Limon gold deposit.
Several near-surface drill holes showed strong gold grades. A resumption of activity at the mine would no doubt include a resumption of drilling.
The stage is set for more success, and investors are starting to take notice.
If you missed our original report on CXB, you can find it here: Calibre Mining: The Billion-Dollar Buyout Team is Back
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