M&A in a bull market - Calibre Mining's Darren Hall on maintaining perspective

Maintain perspective in this gold bull market, warned Darren Hall, president and CEO of Calibre Mining. 

Last week Hall spoke to Kitco Mining at the Gold Forum Americas/XPL-DEV 2024 in Colorado.

Calibre Mining (TSX: CXB) is a Canadian-listed, Americas-focused, mid-tier gold producer with development and exploration projects across Newfoundland and Labrador, Canada, as well as Nevada, Washington, and Nicaragua. Calibre operates the Limon Mine in Nicaragua and recently finalized the acquisition of the Valentine Gold Mine in Newfoundland and Labrador, with initial gold production expected in the first half of 2025.

For 2024, Calibre's gold production guidance is between 275,000 and 300,000 ounces. Once Valentine becomes operational, production is expected to rise to 500,000 ounces annually.

Hall stressed the importance of diversifying the company’s asset base to mitigate the risks associated with relying solely on production from Nicaragua. The acquisition and development of Valentine in a stable jurisdiction like Newfoundland significantly bolster the company’s profile.

Calibre’s growth strategy has often been compared to B2Gold, which also began with assets in Nicaragua and grew through strategic acquisitions to become a million-ounce-per-year producer. While there are similarities, Hall emphasized that Calibre's success is driven by strong management, a dedicated team, and a focus on organic growth and exploration, particularly in Nicaragua and Nevada. The company’s strong balance sheet has allowed it to fund projects like Valentine while continuing exploration.

With gold prices around $2,600 per ounce, Hall acknowledged that the additional cash flow provides more financial flexibility but stressed that it doesn’t alter Calibre’s strategy. The company remains focused on organic growth, with exploration at the forefront of its future plans. Despite gold hitting several all-time highs in 2024, Hall urged miners to maintain perspective when making deals.

“Higher metal prices don’t make for more intelligent decisions,” Hall cautioned. “You’ve got to take a long-term view on any transaction. Is it durable? I’d take a conservative view on metal prices with respect to acquisitions and investment decisions, and then bank the upside when it comes, rather than require higher metal prices to support the decision.”

When evaluating projects, Hall noted that if you “torture the asset long enough, it’ll confess to any answer you want,” warning that committing under such conditions leads to unrealistic expectations.

Coverage of the Gold Forum Americas/XPL-DEV 2024 is sponsored by Metalla Royalty.

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