Calibre reports positive maiden resource for Panteon deposit at Limon

Calibre Mining (TSX: CXB; US-OTC: CXBMF) has reported the first resource estimate for the Panteon deposit at its Limon mine in Nicaragua.

The high-grade vein is about 150 metres from the company’s producing Santa Pancha underground mine.

Panteon has 90,000 indicated tonnes grading 9.88 grams gold per tonne for 29,000 contained oz. gold and another 303,000 inferred tonnes averaging 6.79 grams gold per tonne for 66,000 ounces.

The resource estimate was based on 122 diamond drill holes (72,672 metres), including 12 holes (12,265 metres) Calibre drilled in late 2019 and early 2020.

The mineral resource extends to a vertical depth of about 230 metres from surface, and the company believes there is potential for the deposit to remain open at depth. That’s because the deepest hole – a historic hole drilled by Noranda Mines, a previous operator – intersected 3.25 grams gold over 2 metres at a down-hole depth starting from 422 metres.

Processing facilities at the Limon gold mine in Nicaragua. Credit: B2Gold.

Panteon is hosted within a low-sulphidation bonanza-style epithermal vein system typical of Nicaragua’s Limon district. Between 1965 and 1992, high-grade gold mineralization was mined along a 1,000-metre section of the vein system to vertical depths ranging from a depth of 100 to 135 metres.

Historical access to the Panteon deposit was provided by a shaft that provides ventilation for the Santa Pancha underground mine. Mine planning is underway to mine material from Panteon in the fourth quarter of 2020.

This summer, Calibre expects to focus on resource expansion opportunities at Panteon, the main Limon vein system, and other targets in the district. In May, the company increased its drill program by 30% for the year from 47,000 metres to 60,000 metres. Four drills will focus on Limon, four on Libertad and two at Pavon.

Calibre acquired the El Limon and La Libertad mines and Pavon gold project from B2Gold (TSX: BTO; NYSE-AM: BTG) in 2019 for $100 million in cash and shares – turning the company from an exploration and development company to a gold producer.

Prior to the outbreak of COVID-19, the company forecast 2020 production of 140,000 to 150,000 oz. at all-in sustaining costs (AISCs) of US$1,020 to US$1,060 per ounce. But the company suspended production at both mines in late March and withdrew its guidance for the year.

Farooq Hamed of Raymond James initiated coverage of the company on June 4, noting that Calibre “is on the cusp of another significant change as it is in the early stages of transitioning the two separate standalone mines into an integrated complex (the hub and spoke strategy), which we believe gives CXB the potential to grow production significantly from its existing resource and infrastructure base without the need for significant amounts of capital.”

The mining analyst estimates that by transitioning the two mines into a single complex, Calibre “can unlock 2.7 million tonnes per annum of processing capacity across its operations, allowing ores from El Limon, Pavon and other properties that have limited or no milling capacity to be hauled to and processed at La Libertad that has excess milling capacity.”

“The benefits of the hub and spoke strategy include: pulling forward of production from El Limon and other assets (NAV optimization), eliminating capital requirements to expand or build milling capacity, extending the life of La Libertad and deferring closure costs, and potentially lowering the bar to make regional exploration targets economic.”

In addition, Hamed said that the El Limon and El Libertad concessions have potential for resource growth, and pointed out that the company has three separate joint-venture agreements with Rio Tinto (NYSE: RIO; LSE: RIO), Iamgold (TSX: IMG), and Rosita Mining on its 876-sq.-km Borosi concessions in northeastern Nicaragua.

He has a strong buy rating on the company and a target price of $2.25 per share.

At press time in Toronto, Calibre was trading at $1.36 per share within a 52-week trading range of 47¢ and $1.46. The company has 328 million common shares outstanding for a $446-million market capitalization.