March 11, 2024
How the Valentine Gold Mine Acquisition Positions Calibre for a Growth-Filled Future
Earlier this year, Calibre finalized acquisition of the Valentine Gold Mine in Newfoundland and Labrador, Canada, with initial gold production anticipated in the first half of 2025. Upon full ramp-up, the mine is expected to contribute up to 195,000 ounces of gold per year.
The move made waves across the industry, propelling Calibre to mid-tier gold producer status, and cementing its reputation as a growth-focused industry leader.
Recently Ryan King, Calibre’s Senior VP of Corporate Development and Investor Relations, sat down to chat about Calibre’s first mining foray in Canada, and what it means for the future of the company – and its shareholders.
It’s an exciting time, says King. “On a daily basis, I interact with many new investors, large mutual funds, hedge funds, and institutions,” he says. “And it’s all about educating people on why this is such a positive move.” For starters, it diversifies Calibre’s assets further into another safe, Tier 1 jurisdiction, where valuations trend higher. The re-rate opportunity is significant.
"This transaction builds on our commitment, adding a high-quality gold asset in the final stages of construction with strong exploration upside in one of the top mining jurisdictions in the world." – Calibre President & CEO Darren Hall
The lead-up to Valentine: Calibre’s history of strategic growth
King has more good reasons to be confident; namely Calibre’s track record of success, and its leadership team.
The company first became a producer in 2019, when “Calibre 1.0” – then an exploration company – struck a win-win deal with B2Gold to acquire the company’s assets in Central America. “Calibre had been exploring in Nicaragua for more than 10 years, so it was a jurisdiction the company was familiar with from an environmental, regulatory, and mine-legislation perspective,” says King.
This acquisition also brought together the team currently at the helm, including King, President & CEO Darren Hall, Chairman Blayne Johnson and Lead Director Doug Forster. Hall turned his sharp operational eye on the business, identifying new opportunities for efficiency. The result was the Company’s now-signature hub-and-spoke model in Nicaragua, trucking ore from satellite mines to be processed at either the smaller Limon or larger Libertad processing facility – which unlocked significant shareholder value.
“Using this hub-and-spoke approach, we kept many local people employed, and enabled the Libertad facility to continue running. By responsibly adding new satellite ore sources, Calibre was able to consistently deliver annual production growth, which led to higher operating cash flow and the ability to reinvest back into the assets,” says King. “Moving forward, Darren tasked us with applying this model to new opportunities.” Each subsequent year, the team delivered.
Over time, this yielded consistent results – unlocking significant shareholder value and driving approximately 25% compound annual production growth. It also helped build significant investor confidence, giving the company a platform from which to grow. Which it did, through the addition of Pan Gold Mine in Nevada, a 200-plus-sq. km land package in the multimillion-ounce Battle Mountain Eureka Trend.
“With our producing mines in Nicaragua and Nevada generating strong operating cash flow, we were able to reinvest in the business, which led to a 370 per cent increase in Mineral Reserves, after producing over 700,000 ounces since Q4 of 2019. And we continue to deliver on market expectations,” says King.
“At our current size, and with our anticipated growth profile for 2025 and beyond, we’d begun to attract significant institutional investors,” he adds. This year, for instance, the company is guiding 275,000–300,000-ounces of production. “But we didn’t stop there. We set our sights on building a multibillion dollar company.”
"This transformative merger creates a projected 400,000–500,000 oz. gold producer and offers our shareholders diversification and exposure to high-quality, long-life production in a Tier 1 jurisdiction." –Calibre Chairman Blayne Johnson
The next step: Bringing the Valentine Gold Mine into the fold
The team started looking for a new asset – one either in production, or that could be in production within the next 12 to 18 months. “We focused on opportunities that had been materially de-risked, significantly, from a mineral resource and reserve perspective, as well as from economic-viability, permitting and social perspectives,” says King.
The search landed them on the Valentine Gold Mine, an asset halfway through construction in central-western Newfoundland and Labrador, Canada. Targeted to begin producing in the first half of 2025, the Mineral Resource harbours an estimated five million ounces in all categories.
It had a decade’s worth of exploration and development work under its belt, and was fully funded and permitted, with earthworks essentially complete – presenting a very compelling opportunity for growth. In every metric we could see an accretive transaction,” says King.
A growth-filled future on the horizon
As with any large acquisition, it was no small feat to complete and secure shareholders’ approval – but the deal was finalized in late January of this year.
So what does the Valentine Gold Mine acquisition change for Calibre as an organization? “It’s completely transformational from an investor perspective, but from a cultural perspective, not so much,” says King. “We have an established approach, which Darren set out right from the get-go, and that will evolve into Canada.”
This includes defining clear responsibilities, accountabilities, and authorities to deliver value sustainably and responsibly, incorporating environmental, social and governance considerations into all decision-making, and working closely with community stakeholders to share benefits locally.
Since becoming a producer we have delivered market expectations for 17 quarters, while building a strong and respected social license to operate, notes King: “If you asked stakeholders or communities within Nicaragua about Calibre, I think you'd get a very positive perception of how we do business; employing locally and ensuring environmental stewardship and responsibilities,” he adds. “So it’s about bringing those cultural aspects into Canada and integrating it with the Canadian team.”
To learn more about the Valentine Gold Mine, and the future of Calibre, read our latest news and investor presentation.