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Calibre Mining

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September 16, 2024 at 11:00 AM (MDT)|Broadmoor Hotel & Resort

Darren Hall

President and CEO

Darren Hall has over 35 years of experience in the mining industry with a track record of increasing production, reducing costs, improving capital effectiveness, and promoting health, safety and business excellence. Mr.Hall has previously served as Chief Operating Officer of Kirkland Lake Gold, which acquired Newmarket Gold, where he also served as the Chief Operating Officer. Prior to Newmarket Gold, Mr.Hall worked for Newmont Mining Corporation where he held roles of increasing responsibility throughout the organization for almost 30 years. Mr.Hall graduated with a Bachelor of Mining Engineering (Hons) from the Western Australia School of Mines in Kalgoorlie

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Us today is Darren Hall. He is the president and CEO of the company and with that, please take it away, Darren. Yeah, thanks Brian and thanks everyone for joining us this morning. First, I'll reach out to the organizers of the show and thanks very much for taking the time to put it on as, as always a, a quality product. And we we're privileged to be here and it's great to get everyone together and talk about the business. So I will point people to the forward looking slide. We, we will talk about things today that are forward looking so as a necessary evil will be a quiz at the end on this one. I'll spend a little bit of time for those that aren't familiar and go through, you know, what is caliber, where have we come from? You know, when we, when we transitioned the business from an Explorer prospect generator in 2019, with the acquisition of Beta gold's assets in Nicaragua, we went out in the summer and raised $100 million at 60 cents for that. And the purpose was to create a quality mid-tier gold producer and over the last four years or five, actually coming up for five years in October 15th coming up is, is that what have we done with the product? We've grown reserves in Nicaragua from what was around 200,000 ounces to over a million ounces and year on year. We've been able to replace those ounces. We've grown production 30% compounded annually year on year to where we are today. And importantly, what we've done is in building new mines. We've also and replacing reserves. We've been able to build our cash position. So we went from ostensibly at the end of 2019 $4 million net of obligations to be to gold to at the end of last year, having $86 million in cash after the private placement into Valentine Gold. So I think we've demonstrated over the last five years, our ability to operate and perform in Nicaragua, which has been again a great place for us to be happy to be. and it's demonstrated, you know, it's given us the ability to do that next transformational transaction, which was acquiring Marathon here in Q four of last year for the Valentine Gold Project, which again, those that are familiar, it's a, it's a, it's a very nice project. It's a 200,000 ounces a year at roughly in the feasibility, $1000 an ounce. It's a quality project in a fantastic jurisdiction with significant upside potential. So as we look forward to the future, and we see the rerate opportunity that comes from people, recognizing the value that comes out of Nicaragua and the confidence that we've seen year on year and quarter on quarter and delivering into expectations, the unlocking the value that will come from Valentine being in an appropriate set of hands that can deliver the value from that asset and projecting us into a quality mid tier with guiding 450 to 500,000 ounces over the next two years in 2025 and 2026 there's a significant opportunity that exists for caliber shareholders. and we can pick a metric and you all have your favorites. But on any metric, we pick, we see us as a, as a great opportunity for investment into for those three reasons. So let's talk about what Valentine is, right? So introducing it, it, it very much diversifies our production exposure and whether you're 100% in Nevada or you're 100% in Nicaragua or you're 100% in Newfoundland. Having the opportunity to have that diversification and production risk is a very good thing and we're, we're very pleased to be in Canada. It's a great place to be. But as I've talked about before, no jurisdiction is a panacea. They all have their exposures, they all have their pluses and minuses and having that diversity is a, is a great place. To be as Jason alluded to earlier, right, a big value proposition for us is the fact that as we look forward to birthing Valentine that in excess of 50% of our mining NAV is gonna be coming from Canada, which is a great place to be, right. It very much changes the product that is caliber, demonstrated ability to deliver into our existing assets, Newfoundland coming on board. Now, let's talk about what Valentine looks like as a build, right? For those that are familiar with Valentine. Again, it's it's when we acquired the asset, it was about 50% built. And importantly, the owners of the asset didn't have an adequate level of engineering to be able to understand what the costs were. What have we done since we've had the asset. We're now at 98 98 98 99% engineered as of today, we're in excess of 80% built. We've secured all the long lead time items, they're on site. We're erecting, the building is enclosed. Mill, building is enclosed last week. The tailing storage facilities. Stage one and two is complete. So we'll now project onto, we'll start commencement on stage three, which provides for year three and four capacity. So, you know, significantly de risks from what we've seen in other assets that have created tension from a schedule perspective or a build perspective, right? So all of the major components are on site. We are now focused on bolting those things together to be able to deliver into gold production. Here in Q two of 2025 we've got an operating team in place. We actually had an analyst visit last week and I was joking with Brian, as I came up, I was gonna pass the baton to, to Brian Ingrid and Ovace to give the presentation because they were in Valentine here just two weeks ago. So talk to them offline and find out their perspective cos I can tell you, but importantly, their perspectives that they bring are very valuable because they get to see a lot of things that I don't see. And I think they walked away feeling very comfortable with where things were at. But we put a team in place that can operate those assets and importantly, in the labor constrained market that I hear about in Canada. We've had people relocate to Central Newfoundland, they've uprooted family, they've moved there, they're committed to the asset. There's nothing wrong with fly and fly out. It's a good opportunity or a good model for some instances. But when we have people that are making those commitments, it shows they're committed to the assets. It's a quality team. And now we now we're going through the organization and building the next level of support in the mid, in the mid ranks of, you know, the supervisors and superintendent levels. So we're well poised that once we complete the build and we'll be mechanically complete, substantively, mechanically complete in December of this year to be able to deliver into gold production in Q two of 2025. You know, we're in very, we're in a very, very good situation. I'll go on to, you know, s now, let's talk about, you know, where the build. Now, once we deliver the project, it's gonna be, can we deliver into the commitments that have been made from a production and a cost perspective? So there have been some issues raised historically about grade at Valentine because some of the work that was done in earlier stages of the project was had gaps in it. That was those gaps were resolved in the updated feasibility study that marathon issued in the Q four of 2022 but not to rest on that over the last year. What we've done is progressed infill drilling and a nine by 9 m spacing to be able to confirm that the grades are there that we can be comfortable in. Key, right? We can deliver a mill, we can deliver tons through the mill. But if the grades not there, we won't deliver into cash flow expectations. We've comforted ourselves, but we did prior to the acquisition as part of the DD, the grade was there. We, we've also now confirmed through nine by 9 m spacing which is effectively blast hole level drilling at an RC level that the grade is there, right. So we issued the, the leprechaun results infield drilling. It's a three pit plan for those that aren't familiar. It's a leprechaun, bury a marathon and I'll talk more about that as we go forth from an exploration perspective. But leprechaun was discovered in 2012 be marathon was discovered in 2016. That was the formulation of the initial plan that marathon had progressed as a two pit plan as part of developing the plan and permitting they did infield drilling which discovered Berry in between those two pits. So well, that's a good lead into the exploration we'll get into in in just a second. But leprechaun has demonstrated the fact that we can reproduce the grades. And importantly, what we've actually seen is a and is an increase in tonnage over what was foreshadowed in the reserve model. So from the oil control drilling, we saw 15% more tons netting out 12% more ounces. Recently, two weeks ago, we released the infill drilling up results for marathon. And what we've seen is a significant increase in grade over what was anticipated 40 plus percent is that indicative of what the deposit's going to deliver? We hope so. But what we are comforted in is is that the any grade risk or any perceptions of grade risk that exist, we can now quash and say that, you know, we're well beyond those, talk about leprechaun as we did the infill drilling, we saw that there was some unidentified mineralization that trended to the southwest, right, extending into the Frank zone. We've subsequently followed up on that in the process of following up on that. We've released some results subsequent to that drilling which shows that, that that mineralization continues. And we believe that there's significant potential to expand leprechaun to the southwest and into the Frank zone. So talk about, you know, what's next from an exploration perspective. And you know, so we talk about leprechaun in the South Marathon in the towards the north, that segment of the Valentine Lake shear zone, which is the primary controlling structure for mineralization. It represents six kilometers of a 32 kilometer trend. There's also the the flip side to that trend on the northern side which is unexplored. So what we've seen is in this, in this greenfields development is a significant is a very small portion of what the exposure is or the potential is, has been touched by previous incarnations. And I think that differentiates this build as well. This is very much a green fields rather than a brown fields opportunity. And you know, as we go forth, you know, we're starting to see indications of and what I'll point out here is is that, you know, leprechaun and marathon were both discovered because they outcropped its surface. There's two pho there's three photos here. The photo on the left is exposure at Marathon, which is where the geologist saw the opportunity and then followed up with drilling the photo on the right there is the leprechaun pond and you can see on the kind of the midway through this the photo there, there's some outcrops that was the leprechaun outcrops that encouraged geologists to go drill marathon. Sorry Ferry was a blind discovery. So to me, the most important pre photo or graph in this entire presentation is the one at the bottom and what it's showing, it's showing the tool cover over the primary mineralization which is quartz to marine pyrite is the host is, is that everything that's been found on this property state excluding Berry was because it outcropped through surface and there's no reason going forward or no reason that that be the case. So our program early in the year was focused on prospect generation working out where we wanted to drill next and it was identifying along the share zone where we saw hits of QTP and then we'll follow up with diamond drilling. We've seen very good and very encouraging results from that early part of the program. And recently we've increased our diamond drilling program by an additional 100,000 m commencing in July of this year, right. So we see great opportunity for resource growth as we go forth. And it's important as we go into this stage of development that we don't get distracted by the upside that comes from exploration. But you know, as we become more comfortable with our ability to be able to birth, Valentine, put an operating team in place that can deliver into those commitments. We can now start to look at what's next and it figures into, you know, as we uncover this mining camp because it will be right. What attracted us to this deposit was Valentine is an incredibly attractive deposit in its own, right? But the potential is significant, we need to understand what that scope and scale looks like. So as we start to do more life of mind, facilities planning beyond what was included in the feasibility study, we can get permits ahead of them ahead of time and we can start to understand where we want to place facilities because you know, so many assets in early stage of development have placed things in places where they wish they hadn't. So we're trying to understand that and importantly, as we start to look at what's next from a build perspective, those that are familiar will know that the Valentine gold mine was a 2.5 million ton build and year three and four expanded to 4 million ton. We see there's an opportunity with the existing infrastructure to be able to optimize that and early indications. Yet we continue the scoping level work. But I think there's an opportunity maybe take that to 5 to 5.5 million tons. And the reason for that is not optimizing operational efficiencies. It's about in the design. The bottleneck for the design is the S A and the ball mill. And if we date ourselves and think about what, how do we used to operate these facilities before S A mills become in vogue, it was typically primary crushing, secondary crushing into ball mills. So what we're looking at is let's insert secondary crushing, post-primary pre S A and that'll fine up the size going into the SAGS allow for more efficient use of tho that capital infrastructure and potentially put us in that 5 to 5.5 million ton. So we see great opportunity across the jurisdiction as we continue to become more and more confident in our ability to deliver into Valentine. Again, I won't repeat this. This is probably the opening slide in terms of where have we come from? How have we got there? demonstrated ability to, we're a relatively young company, right? We've been an explorer for 15 years. We've been an operator for five. But the pedigree of the team, we've been able to assimilate over the last five years is significant most recently with the addition of Daniella Dimitrov as, as CFO bringing caliber of those sort of people into our organization is significant as we position ourselves to be the next quality mid-tier producer, those that are familiar with Nicaragua, understand what it is. It's like Amazon Prime and reverse is by the way I consider it right. We've got two facilities we're trying to leverage off the installed capacity. The beta gold have put in place over the decades rather than go and blow capital. Let's look at how we best utilize capital. We've demonstrated our ability to take anything within Nicaragua into a facility in Nicaragua and be economic. We have a significant land position in Nicaragua. We have roughly about 14% of the land mass in Nicaragua under our claims. It's a very prospective region. And again, like Valentine, the assets have been oh sorry, like Valentine, a significant portion of the assets that have been or the production that's been discovered in Nicaragua because it daylighted its surface and geologically, there's no reason that be the case. Most of them were discovered because of A S MS were out there. They did, they've mined into, they got to the limit of their capacity, the industrials came in and then chased it down, right? As we've seen it at Lemon and the VM Corridor we've currently added, I think in excess of 300,000 ounces into reserve over the last couple of years as we continue to chase along that northern corridor, which is inside the Lemon District, which has been in constant production since the 19 forties and has produced close to 5 million ounces, right? So these are enduring districts, you need to be committed to exploration. That was the opportunity that presented us when we acquired the assets, these assets, if you can remember back were the formulation of what B two gold is today. They generated the cash which allowed them to go out and do those very accretive transactions to be able to build B two gold into the assets. They are today with that, there wasn't the commitment into exploration, that was the opportunity that presented ourselves. So, you know, Nicco was a great place to be. It's been very enduring, it continues to do and we see great opportunity there from an exploration perspective. And importantly, in the medium longer-term, we still have a million tons of surplus capacity that we can leverage off. So the talk to free cash flow generation is significant. And as we morph our exploration programs from conversion and confidence to be able to demonstrate the fact that we can maintain that reserve base in the next couple of years, right, we can now start to look further a field. And I think that as we continue to explore and find those assets, I think we'll start to see some very interesting results in over the next few months, Nevada is a cash flowing aspiration asset. It's a great asset. The team do a fantastic job of delivering into expectations there at a very low grade 2 to 1 through pressure heap bleach. The talk to free cash flow generation is significant from a grade perspective. We've seen indications of positivity in grade. So as we continue to understand where that goal came from and what it looks like. I think we're in the, in a great jurisdiction for what could be something very exciting as we go forth as well. So we haven't, we love all of our Children, Nicaragua, Nevada and Newfoundland and they all have different things they can bring to the puzzle, but consolidated, it puts us in a great position as we look forward to the future to be the next quality mid-tier producer. Oh Pocket, they're running. Yeah, that does take it completely at the end of the time. So please join me in. Thanking Darren. Thanks.


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