Calibre rises on record gold output

The quarter generated $214.5 million in cash while 90% of production came from its Libertad and Limon mines in Nicaragua, Calibre said Monday. The remainder, or 7,070 oz. came from the Pan mine in central Nevada. The year-on-year quarterly record was, however, 6% lower than Calibre’s fourth-quarter output total of 76,269 ounces.

Its production total of 71,539 oz. is about 6.3% higher than previously estimated by Haywood Securities analyst Marcus Giannini, he said in a note on Monday, adding that it “underscores the strength of the company’s asset base.”

Equinox Merger milestone   

Calibre’s $2.56-billion merger with Equinox Gold (TSX: EQX; NYSE-A: EQX) is expected to close this quarter to form the country’s second-largest gold producer, a milestone that is to overshadow the slight production start delay at Calibre’s Valentine mine in Newfoundland, Giannini said. 

The company continues to advance the Valentine project in Newfoundland with first processed ore expected in the third quarter, CEO Darren Hall said in a release. Ramp up to nameplate annual capacity of 2.5 million tonnes is to follow.

“Valentine is positioned to become a long-life, cornerstone asset in Canada, initially delivering approximately 200,000 oz. of gold annually with significant exploration upside,” Hall said.

Calibre shares gained 1.9% to $3.22 apiece by mid-Monday for a market capitalization of $2.74 billion. Its shares traded in a 52-week range of $1.73 to $3.33.

New Equinox output

The post-merger company, to be called New Equinox, could produce more than 1.2 million oz. of gold annually after Valentine and the Greenstone mine in northern Ontario reach full capacity, Hall said.

Including Greenstone, which reached commercial production last November, Equinox currently holds seven operating mines in the United States, Mexico and Brazil.