Gold just hit a record high of $2,511 and is expected to push even higher, creating substantial opportunity for stocks, such as Calibre Mining Corp. (TSX: CXB) (OTCQX: CXBMF), Barrick Gold (NYSE: GOLD) (TSX: ABX), Royal Gold Inc. (NASDAQ: RGLD), Franco Nevada (NYSE: FNV) (TSX: FNV), and Newmont Corp. (NYSE: NEM) (TSX: NGT). Forcing gold higher is safe-haven buying ahead of U.S. inflation data this week, which could shed even more light on potential interest rate cuts. That’s in addition to explosively heightened tensions coming from the Middle East.
“(Gold) remains supported by geopolitical risks and anticipated Federal Reserve rate cuts amid heightened tensions involving Iran, Israel, and Ukraine,” said derivatives platform Saxo Bank’s Strategy team, as quoted by BullionVault.com. In addition, analysts at Citi have a $3,000 price target on gold over the next 18 months, especially with Middle East tension and the Federal Reserve. Bank of America has said gold could also test $3,000 in the next 12 to 18 months.
Look at Calibre Mining Corp. (TSX: CXB) (OTCQX: CXBMF), For Example
Calibre Mining Corp.’s Darren Hall, President and Chief Executive Officer of Calibre, stated: “Calibre continues to generate strong operating cash flow, while the fully funded Valentine Gold Mine progresses to construction completion. With the recent approvals for the Volcan open pit and subsequent ore deliveries into the Libertad mill we, as planned, expect a stronger H2 and remain on track to deliver into our 2024 gold production guidance of 275,000 – 300,000 ounces.
During the quarter we made excellent progress advancing the construction of the Valentine Gold Mine with SAG mill, ball mill and primary crusher installation well underway. Pleasingly the team have recently surpassed 2 million hours worked without a lost time injury. A key development recently announced was the receipt of the Federal Environment approval and issuance of Provincial mine and surface leases for development of the Berry deposit and associated infrastructure. With this approval we now have all the major approvals for the current life of mine plan, providing certainty as well as flexibility to optimize for near term cash flow.
We have extensive exploration drilling underway across all our assets. Previously disclosed results at the Valentine Gold Mine indicate robust growth potential below and adjacent to existing Mineral Resources. Consequently, we have expanded the current drill program with 100,000 metres of additional drilling as we begin to unlock the incredible opportunity of resource expansion and discovery potential across the 32 kilometre long Valentine Lake Shear Zone.”
Q2 2024 Highlights
– Construction of the multi-million-ounce Valentine Gold Mine surpasses 77% construction as of July 31, 2024, with a cost to complete of C$211 million and remains on track for gold production in Q2 2025;
– Operations leadership team employed;
– Onsite assay lab construction completed and operating;
– Primary crusher installation underway;
– Primary conveyor from crusher to grinding building onsite;
– Reclaim tunnel and coarse ore stockpile construction progressing;
– SAG mill and ball mill installation underway;
– CIL leaching tanks construction well underway; and
– Tailings Management Facility progressing, embankment liner at 96%;
– Received Federal Environmental approval for the development of the Berry open pit at the Valentine Gold Mine, with this, the major approvals are in place for the three-pit mine plan;
– Continuous gold mineralization discovery at the Valentine Gold Mine reinforces the vast upside potential;
– Commenced the largest pure exploration drilling campaign in Valentine’s history following up on recent results and providing new discovery opportunities along multiple kilometres of identified shear zones;
– Valentine Gold Mine achieves 2 million hours worked with no lost time injury a significant milestone;
– Achieved another significant milestone with receipt of the Environmental approval for operation of the Volcan Gold deposit in Nicaragua and within a month delivered first ore to the Libertad mill located 5km away, demonstrating the value of the Company’s hub and spoke operating strategy as it organically grows gold production;
– Consolidated production is expected to be weighted to the second half of 2024 with Q4 2024 anticipated to be the strongest quarter of the year while Total Cash Cost (“TCC”) and All-In Sustaining Costs (“AISC”) are forecast to be lower;
– Gold and silver drill results from Eastern Borosi (“EBP”) reinforce the significant mineral endowment and potential for discovery and resource expansion within the 176 km2 EBP land package;
– Included in the S&P/TSX Composite Index, reflecting Calibre’s growth and value generation for shareholders;
– Consolidated gold sales of 58,345 ounces grossing $137.3 million in revenue at an average realized gold price1 of $2,302/oz;
– Consolidated TCC1 of $1,264/oz; Nicaragua $1,232/oz and Nevada $1,435/oz;
– Consolidated AISC1 of $1,533/oz; Nicaragua $1,407/oz and Nevada $1,766/oz; and
– Cash and restricted cash of $127.6 million and $125.0 million, respectively, as at June 30, 2024.
YTD 2024 Highlights
– Consolidated gold sales of 120,122 ounces grossing $269.2 million in revenue, at an average realized gold price1 of $2,194/oz;
– Consolidated TCC1 of $1,302/oz; Nicaragua $1,276/oz and Nevada $1,468/oz;
– Consolidated AISC1 of $1,545/oz; Nicaragua $1,441/oz and Nevada $1,685/oz; and
– Cash provided by operating activities of $106.6 million including the proceeds from the gold prepay net of the deferred revenue recognized in Q2 2024.
CONSOLIDATED RESULTS: Q2 and YTD 2024
CONSOLIDATED Q2 and YTD 2024 FINANCIAL REVIEW
TCC and AISC for Q2 2024 were $1,264 per ounce and $1,533 per ounce, respectively. The higher cash costs and AISC were due to lower gold production and sales tied to the sequencing of mining different orebodies with lower ore grades, along with higher tonnes moved and higher strip ratios. Q2 2024 gold production was impacted by the geotechnical issue at Limon Norte. The ore tonnes that were not mined in Q2 from Limon Norte are expected to be mined in the second half of 2024.
Net Income
The net income per share in Q2 2024 was $0.03 for both basic and diluted shares (Q2 2023: $0.07 for both basic and diluted). YTD 2024 net income per share was $0.02 for both basic and diluted shares (YTD 2023: $0.11 for basic shares and $0.10 for diluted shares). As a result of the Marathon Gold transaction and C$115 million bought deal financing, the shares outstanding in 2024 increased resulting in the lower net income per share metric.
2024 GUIDANCE
Calibre’s 2024 guidance reflects, what is expected to be, the fifth consecutive year of annual production growth. Given its proven track record, Calibre will continue to reinvest into exploration and growth with over 160,000 metres of drilling and development of new satellite deposits across its asset portfolio expected in 2024.
Consolidated production is expected to be weighted to the second half of 2024 with Q4 2024 anticipated to be the strongest quarter of the year while TCC and AISC are forecasted to be lower. Production in H2 2024 and Q4 2024 will benefit from the open pit Volcan mine expected to reach commercial production in Q3 2024, higher production from Guapinol and higher Limon and Tigra open pit ore production. Growth capital includes underground development at Panteon Norte, Volcan mine development, waste stripping and land acquisition.
Since acquiring the Nicaraguan assets from B2Gold in October 2019, the Nevada assets from Fiore Gold in 2022, and the Newfoundland and Labrador assets from Marathon Gold in 2024, Calibre has consistently reinvested in mine development and exploration programs. These investments have led to the discovery of new deposits and growth in both production and Reserves. This progress positions Calibre to fulfill its commitments and enhance profitability as it expands its operations in Canada with the Valentine Gold Mine anticipated to deliver first gold during Q2 2025.
The Company’s mineral endowment includes 4.1 million ounces of Reserves, 8.6 million ounces of Measured and Indicated Resources (inclusive of Reserves), and 3.6 million ounces of Inferred Resources, as detailed in the press release dated March 12, 2024.
Q2 and YTD 2024 FINANCIAL RESULTS AND CONFERENCE CALL DETAILS
Second quarter and YTD 2024 financial results will be released after market close on Monday, August 12, 2024, and management will be hosting a conference call on Tuesday, August 13, 2024, to discuss the results and outlook in more detail.
Date: Tuesday, August 13, 2024
Time: 10:00 am ET
Webcast Link: https://edge.media-server.com/mmc/p/vmftefqy
Instructions for obtaining conference call dial-in number:
1) All parties must register at the link below to participate in Calibre’s Q2 and YTD 2024 conference call.
2) Register by clicking https://dpregister.com/sreg/10189865/fcb2dee667 and completing the online registration form.
3) Once registered you will receive the dial-in numbers and PIN number for input at the time of the call.
The live webcast and registration link can be accessed here and at www.calibremining.com under the Events and Media section under the investors tab. The live audio webcast will be archived and available for replay for 12 months after the event at www.calibremining.com. Presentation slides that will accompany the conference call will be made available in the investors section of the Calibre website under Presentations prior to the conference call.
Other related developments from around the markets include:
Barrick Gold announced the declaration of a dividend of $0.10 per share for the second quarter of 2024. The dividend is consistent with the Company’s Performance Dividend Policy announced at the start of 2022. The Q2 2024 dividend will be paid on September 16, 2024 to shareholders of record at the close of business on August 30, 2024. In addition to the dividend, Barrick repurchased 2.95 million shares during the second quarter under the $1 billion share buyback program that was announced in February 2024.
Royal Gold reported net income of $81.2 million, or $1.23 per share, for the quarter ended June 30, 2024, on revenue of $174.1 million and operating cash flow of $113.5 million. Adjusted net income was $82.6 million, or $1.25 per share. “The second quarter of 2024 was an excellent quarter for Royal Gold, with near-record revenue, and increased operating cash flow and earnings. After minor adjustments, earnings for the quarter were a quarterly record,” commented Bill Heissenbuttel, President and CEO of Royal Gold. “Our portfolio performed well and benefited from the record high quarterly gold price, and we took advantage of the strong results to continue to pay down our debt. Including a further repayment in July, we have repaid $225 million of debt so far in 2024 and have now returned to a net cash position with total available liquidity of approximately $1 billion.”
Franco Nevada announced that its wholly-owned subsidiary, Franco-Nevada (Barbados) Corporation has acquired a gold stream from SolGold plc with reference to production from the Cascabel project located in Ecuador. FNB has partnered with Osisko Gold Royalties Ltd.’s subsidiary, Osisko Bermuda Limited, to provide a syndicated financing package on a 70%/30% basis. FNB will provide a total of $525 million and Osisko a total of $225 million of funding for a total $750 million. FNB will provide $70 million and Osisko $30 million for a total of $100 million in pre-construction funding available as three equal sized staged payments. The first tranche will be funded at closing with two further tranches, subject to development milestones.
Newmont announced second quarter 2024 results and declared a second quarter dividend of $0.25 per share. “Newmont delivered a solid second quarter, producing 2.1 million gold equivalent ounces and generating $594 million in free cash flow,” said Tom Palmer, Newmont’s President and Chief Executive Officer. “We continued to advance our divestiture program and, to date, have announced $527 million in proceeds this year. With this momentum, we completed $250 million in share repurchases and repaid $250 million in debt. As we head into the second half of the year, we remain confident in our ability to continue executing on shareholder returns, meet our full year guidance and deliver on our commitments.”
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