Calibre Mining Corp. (TSX: CXB; OTCQX: CXBMF) is off to a great start in 2021. The company reported revenue of $82 million for Q1, which resulted in a net income of $16.6 million or $0.05 per share.
Regular readers of EQUEDIA have followed how the new management group at CXB arranged to purchase these mining operations from B2Gold, implemented a “hub-and-spoke” production strategy, successfully worked through a temporary production interruption due to COVID, and now are seeing the benefit of strong gold production as gold continues to strengthen.
So, what’s next?
A more careful look at several recently released analyst updates shows a concentration of target prices in the $3.50 – $4.00 range. These target prices were derived using the standard method of evaluation via a mix of Net Asset Value and Cash Flow analysis.
It is clear that analysts recognize that more and more investors will become attracted to CXB as they continue to deliver strong operating results each quarter. Successful ongoing near-mine exploration and district exploration programs show that the gold mineralization contained in this district-scale gold system is holding together pretty well through expanded drilling programs. As a result, CXB was able to define the largest mineral reserve since 2010, with the highest grade on record at 4.49g/t gold.
Currently, CXB has seen a 200% increase in mineral reserves to 864,000 ounces since year-end 2019. This shows that management is able to grow reserves organically – an important consideration as it is necessary to replace gold mined with newfound reserves. CXB is delivering on this aspect of its strategy and finding more gold to add to current reserves. This is a sign of a strong company with a bright future.
Regular readers will also be aware of the “spare” mill capacity. Additional gold found at satellite deposits can quickly become mill feed. In short, CXB is ideally positioned to turn gold into cash without delay.
As we get deeper into this current period of higher gold prices, some companies will experience production delays due to the unavailability of equipment. We can all remember, in the past, when extreme equipment delivery delays negatively impacted the construction of new gold mines. CXB is in the rare position of being able to simply utilize spare capacity to increase gold production.
In summary, CXB is on a path for future growth. One of the analysts summed it up this way:
“We see potential for Calibre to grow organically into a 200-300Koz/yr. gold producer from its land holdings and operations in Nicaragua.”(1)
(1) For a full copy of the analyst report contact Beacon Securities.
There is one more important and perhaps overlooked aspect of CXB. The company has partnered with mining giant, Rio Tinto, to look for copper/gold porphyry deposits on the Borosi concessions in the northeastern part of the country.
Copper has been on an absolute tear as of late, so shareholders of CXB have the added bonus of having positive upside to an “elephant hunt” with an excellent partner.
CXB is leading by example.
Investors gravitate to “market leaders,” and they recognize the age-old adage of effort/result/reward when they see it.
This is why CXB has such good sponsorship in the mining markets.
-John Top, the technical trader
Disclosure: CXB is an advertiser and we own shares and options.