Calibre Releases Multi-Year Production and Cost Outlook, including Initial Libertad Complex Preliminary Economic Assessment

Calibre Mining Corp. is pleased to announce its initial multi-year outlook (the “Plan”), which includes the initial Libertad Complex Preliminary Economic Assessment (“PEA”).  

The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized.  All figures are expressed in United States dollars. 

LIBERTAD COMPLEX:  PEA HIGHLIGHTS                        

• 2021 to 2023 annual average
  • Gold production:  120,000 ounces
  • All-In Sustaining Costs¹ (“AISC”):  $906 per ounce
  • After-tax, free cash flow:  $69 million (at $1,800 gold)
     
• 2021 to 2025 cumulative, after-tax free cash flow
  • $216 million at $1,500 gold
  • $319 million at $1,800 gold
     
• Of the Mineral Resources reviewed for this plan, ~60% of the Indicated Mineral Resources and ~40% of the Inferred Mineral Resources were included in the PEA. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. 
  • Additional technical studies (drilling, engineering, and mine design) are required to better understand the Mineral Resources excluded from the PEA
     
• Exploration
  • No drilling results or data after December 31, 2018 are included
    • Other than Jabali and Panteon Underground have more current drilling results and a mid-2020 effective date
  • Near-mine and infill drilling programs designed to provide additional mill feed
     
• 2021 to 2025 milling capacity
  • ~1,500,000 average annual tonnes of surplus mill capacity (installed, permitted and paid for)
  • Underpins potential for significant organic production growth in the near-term    

LIMON COMPLEX (OPEN PIT MATERIAL ONLY):  10-YEAR OUTLOOK

• Average annual
  • Gold production:  50,000 – 70,000 ounces
  • AISC¹:  $900 – $1,100 per ounce
     
• Open Pit Probable Mineral Reserves (as at December 31, 2019)
  • 1.4 million tonnes grading 4.25 g/t gold containing 195,000 ounces mined in 2020-2023
     
• Additional Open Pit Mineral Resources (as at December 31, 2019) have the potential to extend mine life through 2031
  • Open Pit Indicated Mineral Resources exclusive of Mineral Reserves
    • 0.5 million tonnes grading 4.29 g/t gold containing 62,000 ounces
       
  • Open Pit Inferred Mineral Resources
    • 3.8 million tonnes grading 5.49 g/t gold containing 679,000 ounces
       
• 20,000-meter infill drilling program underway at Limon Open Pits
  • Anticipating majority of Inferred Mineral Resources will be upgraded to Indicated Mineral Resources when year-end 2020 reserves and resources are announced

Russell Ball, Chief Executive Officer of Calibre stated: “Since completing the acquisition of Limon and Libertad just ten months ago, we have made a number of changes that position us to deliver significant value through the implementation of our ‘hub-and-spoke’ operating philosophy.  With the increased investment in near-mine exploration and infill drilling, the recent restart of operations at Jabali underground, receipt of the development permit for Pavon Norte and additional Limon ore available, we have a number of opportunities in front of us to utilize more of the surplus mill capacity at our Libertad Complex.”

“The initial Libertad PEA provides a ‘snapshot’ into our view of the next three years based on the drilling data and mineral inventory we acquired from B2Gold last October.  We expect to provide an updated ‘snapshot’ of the multi-year outlook for both Limon and Libertad in the second quarter of 2021.”

TABLE 1 – LIBERTAD COMPLEX:  PEA FINANCIAL SENSITIVITY MODEL ($ MILLION, AFTER-TAX)

The financial models in the PEA were prepared by SLR Consulting (Canada) Ltd. (formerly Roscoe Postle Associates Inc.) using a base case gold price of $1,500 per ounce.  The PEA includes metal price sensitivities detailed in the technical report which is expected to be published on www.sedar.com in early September.

TABLE 2 – LIBERTAD COMPLEX: PEA PRODUCTION AND COST OUTLOOK

The PEA is based on Indicated and Inferred Mineral Resources from the following:

• Libertad:  Jabali Antena open pit, Jabali underground and San Antonio open pit;
• Limon (trucked to Libertad Complex): Veta Nueva underground and Santa Pancha Complex (including Panteon) underground; and
• Pavon (trucked to Libertad Complex): Pavon Norte and Pavon Central open pits.

COSTS

The PEA costs are based on historical unit costs and productivities and do not consider current supply chain management opportunities. The reported AISC¹ includes development, G&A, mining, processing, and ore transportation costs.

The PEA is preliminary in nature, that it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized. Further, Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. 

LIMON COMPLEX: OPPORTUNITIES

The implementation of our ‘hub-and-spoke’ operating philosophy has been a key driver in advancing opportunities to positively impact the mine life and Net Asset Value at the Libertad and Limon complexes.  Integrating Limon’s 0.5 million and Libertad’s 2.2 million tonne per annum milling capacity, allows us to maximize value by transporting and processing ore from numerous satellite deposits.

The outlook at the Limon Complex provides a conservative snapshot of the production and cost profiles for only the open pit Mineral Reserves, with the potential for more mine life based on additional Mineral Resources.  These Mineral Resource estimates do not consider any exploration drilling results after 2018, except for the Panteon Underground deposit which is part of the Santa Pancha underground mine.

Based on the Mineral Reserves and expected conversion of the Mineral Resources, the outlook for the Limon Complex is expected to process 500,000 tonnes of mill feed and deliver between 50,000 and 70,000 ounces of gold production a year at AISC¹ of between $900 and $1,100 per ounce for the next 10 years (beginning in 2021).

The Limon Complex is assumed to process mill feed mined from the Limon open pits and this provides the opportunity to transport mill feed from the underground operations at Santa Pancha (including Panteon) and Veta Nueva to the Libertad Complex for processing.

LIBERTAD COMPLEX: OPPORTUNITIES

In October 2019, Calibre completed the purchase of the Limon and Libertad gold mines, the Pavon gold project and additional mineral concessions in Nicaragua from B2Gold Corp. At that time, the focus was on Limon and the recent discovery at Limon Central, while the consensus view was that Libertad had less than a year of remaining mill feed and was approaching closure and reclamation.  By implementing our ‘hub-and-spoke’ operating philosophy and by developing the Pavon gold project, the Libertad Complex processing life has been significantly extended and is now expected to be a major source of free cash flow over the next five years.

The PEA presents what we believe is a conservative approach to Mineral Resource inclusion, with no allowance for future exploration success which could contribute additional feed to the Libertad Complex. The PEA reflects average annual gold production of 100,000 ounces at AISC¹ of $846 per ounce for the five-year period from 2021 to 2025.

The cumulative, five-year after tax cashflow is estimated at $216 million ($1,500 gold) and $319 million ($1,800 gold). The scenario is based on an average mill throughput rate of 0.7 million tonnes per annum, leaving approximately 1.5 million tonnes of surplus annual mill capacity as a significant opportunity for organic growth via further conversion of Mineral Resources, exploration success, artisanal ore purchases or toll milling.

Technical Report and Qualified Person

A Technical Report prepared in accordance with NI 43-101 for the La Libertad Preliminary Economic Assessment will be filed on SEDAR (www.sedar.com) within 45 days of this news release. Readers are encouraged to read the Technical Report in its entirety, including all qualifications, assumptions and exclusions that relate to the Mineral Resource. The Technical Report is intended to be read as a whole, and sections should not be read or relied upon out of context.

This news release has been reviewed and approved by Grant A. Malensek, P.Eng./P.Geo. of SLR Consulting (Canada) Ltd. (formerly Roscoe Postle Associates Inc.), an “Independent Qualified Person” under NI 43-101 Standard for Disclosure for Mineral Projects.

Darren Hall, MAusIMM, SVP & Chief Operating Officer, Calibre Mining Corp. is a “Qualified Person” as set out under NI 43-101 has reviewed and approved the scientific and technical information in this press release.

ON BEHALF OF THE BOARD

“Russell Ball”

Russell Ball, Chief Executive Officer

For further information, please contact:

Ryan King
Vice President, Corporate Development & IR
T: 604.628.1010
E: calibre@calibremining.com
W: www.calibremining.com