Calibre Mining (CXB.TO) has provided an updated resource and reserve estimate on its La Libertad and El Limon mines in Nicaragua. The company announced a total reserve increase from just under 300,000 ounces of gold to approximately 864,000 ounces of gold. On top of that, the average reserve grade has increased to 4.49 g/t gold which apparently is the highest gold grade on record and indicates Calibre hasn’t just lowered the cutoff grades to boost the amount of ounces in the ground.

While the total reserves of 864,000 ounces of gold are impressive, let’s not forget the indicated resource (including the reserves) came in pretty strong as well with 1.53 million ounces of gold although the average grade of 3.03 g/t seems to indicate the average grade of the indicated resources that aren’t part of the reserves is substantially lower than the current reserve grade (a quick calculation indicates an average grade of 2.1 g/t) so Calibre will likely have to do some more work to further upgrade the residual indicated resources (and the 1.3 million ounces in the inferred resource category).

Now the mines are generating a generous amount of free cash flow, Calibre Mining can for sure fund its ongoing 60,000 meter 2021 drill program using the cash flows from both mines, so it’s not unreasonable to expect even higher reserves and resources by the end of this year.

With a projected output of 170-180,000 ounces of gold at an AISC of $1040-1140/oz, Calibre Mining should be generating plenty of free cash flow this year.


Disclosure: The author has no position in Calibre Mining. Please read our disclaimer.

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