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https://www.calibremining.com/assets/exploration-projects/rio-tinto-option/
So Rio Tinto already have an earn in agreement in Nicaragua with Calibre - see above (well worth a close read)... its chicken feed for them, but an early toehold in a country that has some serious metallurgical deposits of all kinds...
Im not sure where this copper play talk has come from. I dont remember seeing it mentioned anywhere in the past 10 years at CNR as being a serious option.. but.. assuming RT or someone like them wanted to take an interest, what could that look like for CNR? Could they raise the vast majority of the equity required for a plant at La India by an earn in agreement i.e full CAPEX for a 100koz plant of $125M, Debt to Equity of 70/30, means CNR needs around $35-40M which at todays SP could be very dilutive. If that could be $10-15M equity with $20M from an earn in agreement, that would obviously be much better for shareholders (MC and JM included).
Any thoughts on what an earn in agreement might look like here? Could we see an earn in agreement with RT, followed by a toll mill agreement from Calibre (who have been deliberately delaying things to keep CNR price down to make it cheaper for RT to get on board / scoop up more of the company via an earn in on the cheap - Calibre then agree a toll mill deal , rerating the company after the deal is done, and its a win win all round? makes you wonder..
And has the BFS been deliberately delayed to allow for some of these machiavellian schemes to come to fruition before the banks can line up for the debt etc ? MC has gone very quiet in the past few weeks, makes me wonder if the NDA has silenced him a bit..
I do agree though, I think CNR might need a smallish fund raise in the meantime to get them through this "orphan" period - perhaps a raise at 30 - 35p? An opportunity to buy the dip if ever I saw one...
regards,
T123
I thought La India project WAS a world class deposit already... ? :-( Or after 12 years exploring and drilling it, are they still waiting to find out? Very bad PR comms in my opinion.. makes CNR look like an early stage explorer.. not a company on the cusp of building a mill for 100-150k pa production..
regards,
T123
Also feels like gold is trying to break the 1975 resistance levels today.. I think its says a lot for the resilience of gold prices just now that its remaining at these levels, despite threat of interest rate rises.. perhaps down to inversion of the yield curve - a lot of people are quite fearful of recession / stagflation and what that will mean for the tech/growth stocks - feels like a reversion to value stocks like the miners could finally be happening.. Gold went to 1900 on the threat of inflation in 2009-2011, one wonders what it will do now from 2022-2024 when inflation is no longer just a threat, its very very real, despite all the FED "dont worry, its only transitory" garbage they were spouting last year..
regards
T123
https://www.calibremining.com/news/calibre-mining-delivers-record-q1-gold-production-4144/
regards
T123
If the warrant holders know what they know about the FS results etc, then yes Im sure they would be prepared to purchase 3M warrants at 25p before they lapse! And if they DONT take up the warrants at 25p before they expire, I think that would also tell a story.. you would hope those guys would have enough confidence in the project by now to think it was a worthwhile investment / top up price to perhaps reduce their averages..
Would provide a very useful £775k of working capital for the company at the right time as well I should think.. may reduce the size of any necessary placing before financing etc..
regards,
T123
The big question for me is, what changed between that video from 19th March when the FS was 2 weeks away, and 29th March when the results came out and it was now due H1.. What arose to change MC's mind - Is there a question over final payment for FS.. perhaps a delay as a placing is now required to pay the final bill? Is there a delay to the modelling due to changing factors, oil prices, inflation etc? I dont believe MC would deliberately lie at Master Investor in front of Jim Mellon.. so something changed in last two weeks of March, question is.. what? And was it good or bad?
regards,
T123
Hi EL, yes that was my thinking too.. possibly a limit buy at 32p thats been worked for the past couple of weeks, hence the recent rise.. if so, the timing of a buy like that just ahead of the DFS release this week could be very telling..
Come on MC, if ever we needed a couple of rabbits out of that magic hat of yours its now.. DFS + Calibre Toll mill agreement, then capex financing with max debt and gold loans, min equity dilution..
regards,
T123
500k trade just gone through at 32p.. I suppose it depends on how long its taken to work a trade that size with the limited volumes here, but was it a buy or a sell? If it was a sell, it perhaps explains the cap on the SP at 34p highs recently.. might allow it to take the lid off it a bit now that its gone through. Esp with news due.. I can still sell fair chunks of shares at 33p, so its not affected demand here too badly at all..
In any case, its an interesting sign of volume picking up here ahead of (hopefully) the DFS being released later this week..
regards,
T123
AF - i havent heard of any opposition locally. He has always said 3 months and $1M capex spend to get a toll deal actually up and running from the time the contract has been signed. I think its Calibre playing hard ball to be honest, or perhaps they feel that the reward for them in terms of profit isnt worth the hassle. At 1000tpd max trucking rate, it would be 40koz pa of gold and at 50/50 profit sharing, they might feel that its not worth it.. i guess there could be scheduling issues with ore processing at la libertad for their own hub and spoke model etc.. if it was 50/50, the net proceeds for Calibre after costs would be $20M a year I think? Perhaps thats not enough to interest them.. $20M a year for Condor on the other hand is a game changer.. :-(
The other option is that MC wants to wait and toll mill the mestiza open pit as its shallow, high grade and can be trucked in isolation from the main plant build area - so wouldnt cause any logistical issues of doing both in parallel - Construction + Toll Mill ops. But perhaps waiting on DFS and mine plan for mestiza before that can be agreed.
In an ideal world? Announce DFS, Start toll mill of mestiza with calibre for 2 years at 1000tpd for 40koz pa, get project finance with proven income stream, agree EPCM contract and start construction. When plant comes online in H1 2024, shift any remaining mestiza trucking operations from Calibre to the main La India plant and process high grade ore themselves..
I still think something has to give after the DFS is released - with gold at $2000, this project has to become just too tasty to resist, even despite the risk of the jurisdiction.. plenty of mining happens in much worse places..
regards,
T123
Gold price is at $1956 currently.. given the recent interest rate announcements, gold is really showing its strength now..
With $900 all in costs per ounce, Condor would be making $1000 per oz EBITDA if it was producing right now.. all those delays for permitting are starting to hurt.. :-(
regards,
T123
AF - yes the lack of any interest is baffling. No institutional investment at all, just retail trades. Makes you wonder.. Also, I guess we are in a closed period prior to the DFS RNS so no director buying allowed at these levels either.. when you consider that FMS did DD and took shares at 50p and even directors paid 42p in last placing.. 33p is an absolute steal.. I bet JM is champing at the bit to buy more and reduce his average.. it should be at least double that right now with a project at this stage, even with the risk from a "frontier" market. More has been spent on drilling and studies than the current market cap.. and the potential for this to be a reliable 150-200koz gold cash machine for an owner is unbelievable...
Its like everything - I think the more unloved this share is, the more it will rocket from the slightest positive news - Toll mining for me would be the big one as it turns it into a producer within 3 months.. not 18-24 months if we wait for mine build..
regards
T123
Some expected DFS numbers from the latest presentation: LA INDIA – Feasibility Study – TARGETING 12 MONTHS PAYBACK for CAPEX - Due by 31st March 2022 - (only 5 trading days away :)
Base Case 100,000 oz gold p.a from 3 permitted pits using SAG Mill already purchased with a capacity 2,300tpd/0.8Mtpa. Expected Capex US$125M and ~US$900/oz Au All In Sustaining Costs
What does that mean? 100koz of gold per year.. Assuming a steady gold price of $2k per ounce and costs of $900 per ounce - Approx $200M revenues vs $90M dollar costs = $110M EBITDA per year, or $1Billion dollars over initial 9 year LOM.
Upside potential? Increase to 120k oz per year with a larger motor, $240M Revenues, $108M costs, $132M EBITDA..
Want further upside? Add in already discovered underground ounces for 150koz per year, $300M Revenues, $135M costs, $165M EBITDA with an extra $35M capex spend required, funded out of initial cashflow.
The target is to begin production in H1 2024.. If gold was to increase to $3k per ounce by that time, assuming AISC costs stayed level, the figures could be
100koz = $210M EBITDA pa
120koz = $252M EDITDA pa
150koz = $315M EBITDA pa
For a company with a $50M market cap with no cashflow at the moment, the growth they could see in 2 years time would be phenomenal..
regards
T123
Not unless MC or JM has a golden share in the company which could veto any takeover offer - and if Calibre know this then what would be the point of a bid, as it would just drive up the SP and would fail anyway as MC would block any cheeky offers that were too low.. MC has enough financial savvy not to allow a takeover on the cheap after 10 years hard work for him here..
But surely if he does, it must be in the companies reports somewhere? Ive never seen it..
regards
T123
Could this be the start of a bigger movement? Cash rich companies finally starting to see value in other assets rather than overpriced tech stocks?
https://www.cnbc.com/2022/03/15/theater-chain-amc-uses-funds-raised-during-meme-craze-to-buy-a-gold-miner.html
Very interesting - hope it catches on.
regards
T123
Calibre seem to be using the cashflow from the 2 nicaraguan mines to fund acquisitions outside the country (perhaps in "safer" jurisdictions.. like Fiore in nevada etc.). I do wonder if they would consider buying Condor and putting more eggs in the one basket so to speak - ie if nicaragua were to become an issue, it would cut off a lot of their income stream.. It strikes me that a much lower risk for them would be to buy La India and use it as a satellite pit for their existing plants with the spare capacity.. its an easy 1Moz open pit permitted gold district that could then be expanded to 5Moz - I think the difference being that they wouldnt want the sunk capex cost of a new $125-160M plant.. I saw an interesting interview with Clive Johnson of B2Gold who thought that M+A and consolidation was on the way this year for gold miners, but that company CEO's were being unrealistic in terms of project valuations.. he suggested an alternative way to do this would be to essentially make hostile takeover bids, by approaching shareholders directly either with an all cash or cash + shares offer and force a shareholder vote to try to wrest control of the company from these "unrealistic" CEO's.. Raises an interesting question for us here - if Calibre made a hostile takeover approach at say "only" 50 or 60p per share, how many would accept? Im pretty sure Jim Mellon, MC and others wouldnt, but given they only have a combined 22% of the company, could they be "outvoted" by impatient shareholders?
regards
T123
Could also get a bit of a bounce off 1) rising gold prices even in the face of rapidly rising interest rates from US/UK (tells you that they dont expect it to work to curb the inflation levels for quite a while yet, but we could have told them that months ago) 2) Master Investor roadshow tomorrow which MC is presenting at.. should give an update on BFS /Project progress etc after his few weeks spent in Nicaragua.. hopefully drumming up some interest for the news flow to come this year..
regards
T123