Calibre Mining (TSX: CXB) - I got big money callin' I'm just tryna play it smart (Transcript)

Morgan Leighton
May 5, 2020

There are plenty of exciting stories in the gold space right now, but this one is up there for us.

Calibre Mining is a TSX-listed 10-year gold explorer that has recently turned producer. The team at Calibre Mining arrived from Newmarket Gold, acquiring 2 Nicaraguan assets from gold major, B2Gold: El Limon, and La Libertad. The company has just announced its Q1/20 results and they are strong, with solid grades and plenty of cash flow.

At the beginning of 2020, Calibre Mining announced its guidance for the year was 140,000-150,000oz gold production, at an AISC US$1,000/oz figure.

Why did the company shift from long-term explorer to full-speed ahead producer? From years spent assessing and scrutinising gold assets, the management team came to a realisation: if they could obtain the right "suite" of assets, with good geological upside/potential, the right timing, and at the right price, they could make investors a lot of money.

When the gold market was in a downcycle, B2Gold moved it focus away from El Limon and La Libertad to focus on other advanced gold projects. These assets became non-core, and Calibre Mining was able to pounce on the opportunity. In 2018, after share price stagnation, the company decided to pivot away from its exploration past to replicate the management team's success at Newmont Gold. The company set about attempting to buy producing assets. It did a 10:1 consolidation, conducted a small raise of C$5M (largely from the board). Around 1-year later, Calibre Mining announced its intention to buy the duo of assets, in addition to a C$105M financing. The fact that Calibre Mining was successful, especially considering gold was in a down cycle at the time, is mightily impressive. The company paid US$40M in cash to B2Gold along with US$40M in shares. B2Gold now holds 34% of Calibre Mining. There is one remaining payment of US$15M due in April 2021. This is the only debt. Looks like a strong balance sheet. Calibre Mining has added two producing gold mines to its list of gold exploration assets. It looks like a great portfolio.

So, how is Nicaragua as a mining jurisdiction? King admits it's not well known, but he has good relationship with the Nicaraguan ministries of labour, mine and transport due to pre-existing relationships. King states that c. 98% of his workforce is comprised of locals. King speaks highly of Nicaragua's mining code. Mining is key to the country's economy. King has managed to transform the two assets into something much more impressive than they used to be? How? King has capitalised on the excellent infrastructure (particularly roads) and power services of Nicaragua. The two processing facilities have around 250-300km between them, but there are multiple ore sources spread around Limon, Libertad and Pavon. These ore sources combine with a total of 2.7Mt of installed capacity to create a cohesive, efficient model that allows Calibre to shift and move ores to where they will be most efficiently processed. This was reflected in the Q1 results: 20% of the Libertad Processing Facility's metal production came from sources that aren't on the Libertad property. King states he is proving the concept he set out with, and this has been reflected in an exponentially rising share price. From C$0.54 in mid-march, it has shot up to C$1.09 in just over a month. The market has latched onto the value proposition King is offering.

It appears Calibre Mining has managed to piece together some quite ordinary assets and is processing them in an incredibly efficient and intelligent fashion. Equinox Gold springs to mind. King states that investors are buying into increasing grades, which could have a transformative impact on economics. The company US$43M of cash.

We Discuss:

  1. Company Overview
  2. Transition from Explorer to Producer: How and Why?
  3. Business Plan and Corporate Structures
  4. Telling it Right: Share Price and Interaction with the Market
  5. Value for Money: Can They Keep it Going?
  6. Impact of COVID-19 and Measures Taken
  7. Nicaragua as Mining Jurisdiction
  8. The Bigger Picture: Targetting and Monetising the Assets
  9. The End Goal for Calibre Mining
  10. Cash Position and Possibilities at Hand

CLICK HERE to watch the full interview.

Matthew Gordon: Hey Ryan, how are you doing, Sir?

Ryan King: I'm excellent, Matt. Thanks for having me on the show.

Matthew Gordon: Yes, so where are you speaking from?

Ryan King: North Vancouver, locked down.

Matthew Gordon: Locked down with the family?

Ryan King: Locked down with the family, 3-year-old and 7-year old. And luckily we've had some nice weather in Vancouver but today is the first cloudy, rainy day so everyone is locked inside again.

Matthew Gordon: No, well at least the kids get to see you, that's pretty cool. Well, hey, well, thank you. Thanks for joining us.  A new story for us. We are excited. You've done a lot of good things very, very quickly and we're intrigued to understand a little bit more about the story behind that. But first, why don’t you kick off, give us that 1-minute overview and we will pick it up from there.

Ryan King: Sure. So, Calibre Mining is listed on the TSX. We were an exploration only company in central America for over 10-years. We have transitioned from exploration-only to producing from two processing facilities, multiple ore sources in Nicaragua, and as well, layered in exploration and development. So, we are a Gold producer. At the beginning of 2020, we announced that our guidance for the year was 140,000oz to 150,000 oz of production and around an All in Sustaining Costs of USD$1,000. So, it is exciting to make that transition that we did last year.

Matthew Gordon: Brilliant. Thank you for that. Now I want to talk about why you made that transition. Okay. Because you've got the ex-Newmarket marketing team there. You are spending 10-years on exploration - Nicaragua. You suddenly decided, let's kind of skip this process and we were going to get into production. Right. So that's a seismic shift in mentality, having spent 10-years at it. Was the exploration side too tough? Was it not giving you the results? I mean, obviously share price tells us a bit of a story, but what's the reality behind the decision to change?

Ryan King: So the reality was, and you just hit on this, is that the Newmarket Gold team, so if I take us back to 2015, it was Doug Forster, Blayne Johnson, Ray Threlkeld, Doug Hurst the founders of Newmarket that saw good geological upside on those assets and were very successful. We did the deal, I think Newmarket was trading around, it was originally a shell, but when we started, the deal was about USD$0.75c a share, we ended up selling the company for, or merging the company for about USD$5 a share. So, we acquired production, but grew the production and grew the resource base through the exploration potential we saw initially and were successful at that. Similarly, the way Calibre came about was the identification of these assets. Doug Forester, Blaine Johnson, always reviewing, looking for opportunities, because of the success of Newmarket.

They recognised that if we find the right suite of assets with good geological upside and potential, with the combination of the right timing and the right deal, we can make people a lot of money, and ourselves included, and we invest in all of our deals. So really the shift was the success, because of the success of Newmarket. Right? We recognised another opportunity. We had looked at hundreds of opportunities for Calibre to buy production, that have the opportunity to either grow the production or grow the resource base geologically. And we landed on doing a deal with B2Gold. So that was really the shift, it is the historical success we had with Newmarket, we were trying to replicate it.

Matthew Gordon: Okay. But you went out to market, raised USD$100M, which is not easy because you did this in the middle of last year. So, I get that the Newmarket team's reputation kind of went before them, but you must've known obviously what you were walking into. And I guess that then begs the question, why would it be to give that up?

Ryan King: Well, I'll tell you, we started discussing this, Blayne and Doug started to discuss this idea with the B2Gold executive senior team, 2-years ago. So, you know, B2Gold has been working towards a 1Moz a year Gold producer. It was a suite of Nicaraguan assets that started B2Gold back in 2009, 2010, you know, so these were very near and dear to them; they spawned B2Gold and were a very meaningful part of their production for many years. But 2013, 2014, B2Gold shifted, you know, instead of doing lots of exploration, which they were still doing, they shifted because the recognised an opportunity to acquire an advanced development stage, construction-ready projects and other production opportunities when the market was turning down for Gold. So, they made the right move.

And then these suite of assets in Nicaragua became non-core to them. It became, you know, from analysts models, less than 5% of their net asset value, less than 8% of their production. So, you know, their shift in focus went from Nicaragua to West Africa for Cola as some of their bigger operations. And that was the opportunity, you know.

I think it was not so much about the divestiture of these assets, but it was a win-win partnership because we could focus on these assets 120%, like B2Gold did back in 2009 and 2010, which allowed B2 to then to have a nice meaningful equity position, which they have over 30% of Calibre, and recognise the lift, the opportunity that if these guys are successful - okay, we get a bit of cash, but we get a big equity chunk as well. And if they are successful, which we think they will be you know, that creates the win-win opportunity for both us and B2Gold.

Matthew Gordon: Okay. So, the Newmarket team and yourself, your founders, can you tell me a little bit about the structure that you've created there to bring these two assets. So, La Limon and Libertad are relatively low-grade projects which you are developing into higher-grade projects. We will talk about that in a second, I'm sure, what structure did you build on day one for this project?

Ryan King: Yes, so, as I mentioned, Calibre had been an explorer company in Nicaragua for 10-years, over 10-years, and over 10-years you are issued in outstanding shares grows quite significantly and quickly. Right? We had had a few years of success and then went into the doldrums for a while, ended up having almost 400 million shares issued outstanding. So, it was 2018 where the team said, okay, let's pivot. Let's now look to try and replicate what we did with Newmarket and go out and buy production, but we'd need to fix the capital structure to do that.

We did a 10: 1 consolidation, right? We did 10:1 consolidation. We then advanced in our work to identify an opportunity to acquire production. And so, after the 10:1 rollback, we did a very small raise. We did raise about USD$5M at $0.45 cents, and largely that was the team that the board of directors, the founders: Doug, Blayne, Doug Hurst, Ray, Russell Ball, myself, put a lot of our own money into that round. Then we brought in some external investors. Sprott came in. Sprott Capital came in for a small bit of that, Rick Rule's group. And so that gave us the small amount of money to go out and start looking, to start identifying and doing due diligence to make the shift. And then almost a year later was when we identified the opportunity, or got to the point where we could announce the opportunity to buy the production and then do a very significant equity raise, as you just mentioned: 100Mat USD$0.60 cents. 

We wanted to price it right, because at that time, you may recall, pot was hot and Gold was not, type of thing, so it was difficult to say the least, in the middle of summer to go out and raise USD$100M, and you just mentioned this too, from assets that came from B2Gold, who are known as some of the best operators and some of the best explorers in the business. It came from B2Gold. So, there was a lot of trepidation. There was a lot of uncertainty about, you know, these assets have historically underperformed. Now Calibre, the ex-Newmarket team is buying them. So, there was a lot of questions.

So, the structure is, it was all equity. We didn't do any debt other than a little purchase price agreement that we agreed to with B2Gold. So yes, we have about a 320 million shares out now. After the raise, we raised a total of C$105M. We paid USD$40M and cash to B2Gold. We paid USD$40M in shares to B2Gold. We had a convertible debenture with B2, which we actually have now converted to common shares, so it brought them from 30% to 34%. And then we've got one remaining payment to B2Gold of USD$15M, which is due in April of 2021. So that's kind of the structure. Other than that, we have no debt.

Matthew Gordon: Well you, yes, sorry, did you mention you bought another USD$15M but that's been deferred until next year, okay. You did say that. You did say that. Okay, cool. I mean that is fascinating to me that you can segue; you can take a company which has sort of been paddling around the exploration pool for 10-years and then suddenly go boom, now's the time guys. And the market has reacted extremely positively to that. You know, from looking at your shares, again, weren’t doing too much in 2019 and towards the latter half when Gold started to go, and you were, I guess, getting into nearer-term production, so people started paying attention to you. The market dipped this year and you've had a quick recovery back to getting back to sort of where you were. Is that, I think that sort of tells a tale that the market is quite interested in your story and they buy what you are trying to create. Is that, would that be fair to say?

Ryan King: You know, I think for us it's kind of a ‘prove me’ story. You know, we bought production from and partnered with B2Gold. So, you know, these assets, historically; la Libertad and La Limon, the two producing assets with mines and mills on them that we bought and acquired and partnered with B2Gold on, have underperformed. You know, they had underperformed. They had not, you know, there were revisions of guidance down sometimes for production. There were cost guidance up. You know, and so the market was kind of like, yes, we know these assets and they haven't met our expectations for a couple of years. And so, to your point, yes, I mean, we did this deal. We acquired the production, you know, there was some history and hair on them and so it's part of our job as the new team with 120% focus, to come in and try and you know, let's say optimise some of the opportunities, maybe find some more ore, but with that 120% focus, we can maybe shift the narrative a little bit from what the external market thinks of these now with, hey, the Newmarket Gold team that sold their last company for $1Bn.

Matthew Gordon: Well, that's where it's getting at, because you know, I'm looking at the share price, the market has reacted, but the reality is there was a lot of hair on this and you have been shaving away at the edges in terms of driving the ASIC down, driving production up, you've had your first major quarter, and I guess we're looking forward to quite a good year and then obviously market reset and COVID comes along. But we will set that aside. I'm interested in how, you clearly understand the need to talk to the market and tell them what you are doing, because like I say with the hair on it and with the legacy issue, not legacy issue, the legacy of the company's performance, I can understand why the market wouldn't react to it, but it did. You've managed to do that. And I think, I always think that companies that underestimate the need to communicate to the market properly, do not take advantage of the situation. You know, because it's all well and good having a good team, good asset if you don't talk to the market… So, what were the kind of barriers that you were coming up against initially, but you know, in terms of what did people not understand? What did you then say to them?

Ryan King: Yes, that's a great question. I mean, when we look at these assets, we internally see a lot of exploration potential, but because they came from B2Gold, you know, there was a lot of uncertainty and hesitation that there's probably most of it's been found, you know, is it really exploration potential? You know, these assets historically have not hit their production numbers. So, what makes you guys think you can do it any better?  - You know, type of thing. And, you know, a little bit of jurisdictional uncertainty. You know, this is central America, Nicaragua, not known for its Gold production, has historically had social unrest issues so tell us a little bit about that. And you know, so there were these hurdles that we had to overcome and still are, don't get me wrong, this is, you know, we think this is early days. We've only had the keys to the assets for 6-months, right? So, it's been a relatively short period of time. You know, although we ramped up through our due diligence, but a relatively short period of time and we've really started to shift the narrative and in how we're looking at these assets rather than two standalone mines and mills.

What we're trying to get everyone to see is that is what we see is that amongst the landscape that is Nicaragua, we have two processing facilities. We have multiple ore sources and we can effectively, cost effectively, efficiently feed these mills to maximize production, maximize value near term, and have a focus on production with a margin. So that's where our view is shifting, and the mastermind behind this is our chief operating officer, Darren Hall, who was at a Newmarket with us. He was at Newmont for over 25-years. So, he rose the ranks over the years at Newmont because he identified opportunities, whether it be for maximizing some production, maximizing and utilization of processing facilities or whether it be some cost savings efforts. So, he's always walked through operations and you know, it's like anybody, if they walk through an operation that's new to it, they'll likely pick up on a few things that they think they could do to optimise it. And so, it was those fresh eyes that we brought to it, to say, hey, there's opportunities here. We can start to see them as we're working through the process. And then it's just communicating that to the market. But then building trust, you know, it's slowly but surely, quarter over quarter, drill result over drill result, building that confidence back up with us at the helm. And that takes time.

But to your point, yes. You know, the market with the price of Gold, which has been positively reacting to some of the stuff in the macro landscape has helped us, but at the same time we've been executing on what we said we were going to do. And so, it's, and so I think that's why you've seen this quick rerating and there's still lots of room, but quick rerating.

Matthew Gordon: So many questions, so many questions. First of all, I have got to ask this one; do you think the price that you paid for this: USD$40M cash, 40M of shares, you felt that was a good price? There's nothing you would change?

Ryan King: Nothing we would change. And actually, yes, so the total was USD$100M. Nothing, absolutely at all we would change and actually we think we got the timing right. And it's nice to have a win-win scenario because B2Gold has a big invested stake in Calibre with their 34%. So, it's yes, no, nothing at all.

Matthew Gordon: Right. Okay. So, and the second component of this, having helped the market understand what it is that you are trying to do, and seeing this, you know, quite reasonable, quite quick rise in share price up; around nearly a buck today. Do you think that you've got enough here to keep people interested before they move on to the next new shiny object? Are you going to be able to deliver this big plan of yours and you know, the cash that you've got, you are generating free cash in a high Gold market, in a bull market, nice money to be made, but you've just been hit with COVID-19, like everyone else. It's going to impact the numbers somewhat. Can you keep this show on the road?

Ryan King: Yes, that's a great question. And there's so many shiny objects out there. It's hard. You know, what we're seeing in the marketplace, and clearly the large cap Gold equities are really moving. Right. And then, you know, I think we will see this transition to the mid-caps and then even the junior Gold producers and we're starting to see early indications of that at that happening, clearly. So, for us, it, you know, it's heads down, bums up, grind away, try and execute the best that we can on our plan and exceed expectations.

So you know, whether people deviate and pick something else up or another shiny object comes about, that may be the case, and to your point, during this temporary suspension, during this pandemic, we're actually trying to utilise the time very efficiently and effectively in the sense that, you know, executing on some social programs to help future production and growth for the company. So, you know, utilising this time with technical studies and permitting that we're doing at the operations. And I think that we will execute on that. You know, even though it may be a very short period of time, a temporary suspension, but from start to finish, it probably takes, you know, 7 to 14-days to get the operation back up and running. And the nice thing for us is that we're really in a state of readiness to get back up and going very quickly because we have all the materials we need.

Matthew Gordon: Yes. And I'm seeing people giving you credit for that. I mean you announced on the 25th of March, suspension to operations, sensibly, as one showed. We've seen a lot of companies talk to us about being able to maintain business as usual and maintaining operational programs because of, well, however they decided to do that. You decided to suspend and not try to kind of muddle through. Why? Why was that?

Ryan King:  First and foremost, health and safety of the employees, the contractors and the families and the communities that we work in. I mean, that is a very key priority and one of our highest priorities in the organisation. I mean, look, we self-imposed our temporary suspension. It wasn't a rule, it wasn't something that came down from the government. We just said, look, with a limited testing capabilities, right within country, with the with the limited healthcare service providers and abilities in-country, we need to get in front of this. We need to be proactive. We need to be preventative. Given what we're seeing around the globe, you know, exponential increases in cases and deaths, we do not want to be part of that. So, we, in a controlled environment, were able to systematically, logically suspend operations, keep them in a state of readiness for when we do see the impetus to restart.

 But we did that, you know, as mentioned, from a health and safety perspective. And so, when we go through this and as we analyse how we restart what we're looking at doing is, you know, potentially bringing in test kits, you know, we're working through how do we do that? And, you know, potentially doing a drug and alcohol and a COVID-19 test at the gate, you know, that type of scenario so that we can feel comfortable so that our communities can feel comfortable that, hey, we're safe. We know that our employees can go to work and know that the company is doing everything they can to test and ensure the safety of our people.

Matthew Gordon: Okay, well, let's talk about the country because like that attitude. We were talking just this morning with another company with assets in Ecuador, doing a very large social program there. And you know, protecting the indigenous population is obviously critical. You know, it's very, very important and it's the right thing to do. But let's talk about Nicaragua, because not many people know too much about it from this side of the pond. I think people from North America feel comfortable with South America as an investment destination and mining and so forth. But what is it like, what's the mining code like? What are your relationships like on a provincial and a state level?

Ryan King: So, you know, Nicaragua, for a lot of people, as you just mentioned, is not well known. We have very good relationships. I think that, particularly with the ministries, the ministries of labour, the ministries of mine, the ministries of transport. And the reason we do is because most of the people, if not you know, 99% of the employees, the workforce, the country management for me to go, came and are now Calibre employees. So, we have, for example, all of the general managers stayed, all the senior geologists stayed on site. So, a very, very excellent knowledge base. And I think over 97% or 98% of our workforce is local Nicaragua. And so, a very well-educated workforce. And you know, our VP country manager, for example, he went to school with the Minister of Mines, you know, and he's been in the mining sector for +30-years.

And so, he's worked with him very regularly, built up a level of trust, and him with our, you know, as our liaison to the government, it's been very effective. And he, you know, he has lots of regular dialogue with the Minister, and the mining code is favourable to mining. I mean, it's appropriate so that, you know, you can efficiently get operations into production, but in a safe and environmentally friendly manner. And what they do in Nicaragua is very interesting: they allow 1% of any mineral concession for smaller miners to mine, and you can actually move them around with the government, you know. So, for example, they're very good at finding Gold, you know, we use them to help find more Gold. It's a nice geochemical tool to help understand, okay, what could this be? Another vein structure?  And then you can actually relocate these ASMs around concessions and then develop on a large scale, commercial basis, a new deposit.

And I'll give you an example: from start to finish, this Lamont complex that we have, there's a new high-grade vein structure that is now part of our open pit complex, which is called Limon Centra. B2Gold rediscovered that in 2017. They did quite a bit of drilling in 2018, they permitted the project and it took them probably 10 to 12 months from start of EIA to completion of EIA. So that is generally unheard of on a global scale; that timeframe from start to finish for an open pit mine. Now granted, they already had a mill and a tailings facility on the complex, but we are doing it right now. We're actually permitting one of our projects. It's called the Pavon. It's a development stage project. We've started the permitting process and Q4, we anticipate an EIA approval, an exploitation approval by Q4 of this year. I mean very favourable.

Matthew Gordon: Fantastic. That's what we're getting at; because it's investors talking about investing into, or thinking about investing into new territories, jurisdictions that are unknown to us, want us to look at the history of the country, you know, mining. I understand from my resources, very important part of income taxes and so forth for Nicaragua. So, and has well-established miners there and have been for some time. Okay. So, I just wanted to cover that off because people get a bit nervous when they're talking about things they don't know about.

I want to talk about the assets briefly, because they have segued, from what you inherited, into something else. When did you, again, make that decision and say, well actually I think we've got something better than I thought we had? And we've ended up with… how do you go about targeting that? How do you go about redistributing your spend, your drilling, or indeed your thinking about how you go about monetising it?

Ryan King: Yes, that really is the million-dollar question of how,

Matthew Gordon: Hopefully a bit more than that, right?

Ryan King: We hope so! I think it really started back in the summer of last year. And, and frankly, you know, for our team, you know, Doug Forester, Blaine Johnson, there was this, okay, there's opportunity here in the sense that there's good infrastructure, you know, Pan-American highways, excellent highways. There's great power and the country and the government have consistently invested in infrastructure. So that's been a huge benefit because that speaks to some favourable costs to transport things around the country. And so it was really Darren Hall, our chief operating officer that, you know, as he was doing his due diligence, remembering the experiences he had over his career and what had worked and what had not worked, and some of the things he was looking at is, you know, trying to break down some barriers in the sense that you've got one mine, it's called La Limon, one mill, which is 500,000tpd up in, let's call it the Northern part of the country. So, a smaller mill, but that sort of complex has produced over 3.5Moz of Gold and we currently have between 1.2Moz and 1.5Moz in Resource there. So, this is, I would say, a world-class, low sulphidation, epithermal vein district. Then you go down to the south to the La Libertad operation, which is a much larger mill. It's 2.2M/t per annum processing capacity, and B2Gold did a very good job investing in that. They built that mill. And so they did an incredible job. So, what he kind of looked at was, okay, you've got these two processing facilities, roughly 250 to 300 km between the two, but we have multiple different areas of ore sources, you know, some at Limon, some at Libertad summit, Pavon.

So, you know, now we've started to implement this, what we call the hub and spoke approach, so multiple ore sources, a total of 2.7M tons of installed capacity. So rather than look at them as, you know, 500,000 tons here a year and 2.2M p/a, we've got 2.7M t of available capacity to process ores. Let's try and efficiently maximize the value in the near term. And so, we know we've got a lot of resources at the Lamond complex. We have no reserves at Libertad, but we've got, you know, probably somewhere around 600,000 oz of inferred and indicated resources. So, you know, utilising the resources that we have, but then also maximizing the processing capacities that we have, rather than sinking new capital into expanding mills, let's look at hauling that material around the country.

And you know, really this started to come out in December of last year, and then, and then Q1, sorry, I should say that it was telegraphed in our Q4 conference call where we said, look, we're evaluating these opportunities because they look good. You know, the cost structure is good, the infrastructure is good, where we can haul ores 250 kms and process it at our Libertad mill. Because not only because it's got excess capacity, but because we're now implementing this new operating philosophy of multiple sources into process and capacities.

And, you know, I think we demonstrated that effectively in Q1: 20% of the Libertad processing facility’s metal production came from sources not on the Libertad property. So, Limon and Pavon; we're already starting to execute on that proof of concept. You know, we've had conversations with the ministry of transport, ministry of labour, and these trucks that were hauling ore around, they get lost in the noise. You know, this is a heavily trafficked Pan-American highway you've got to do obviously, or your public consultations with some of the tops and the tails of the communities. You know, it's that two to four km off of the main highway with some of the local communities, but absolutely no issues that we had in Q1.

And in March we got up to almost 410 a day, hauling ore from Limon down to Libertad, so we think there's opportunity to expand on that more.

Matthew Gordon:  I get the big idea, I get the philosophy and I get the logistics in terms of what you are putting together here. So, it's a nice big plan, but you've also managed to increase the grade. You've managed to reduce the cost. And those can be sometimes a factor of, obviously you are putting more ore through, you are getting more efficient with the process. It's your first full quarter so I would expect you to, you know, improve things dramatically from there. But I am interested in the bigger picture with what you are trying to do with the region asset because you are in Nicaragua, that's where the experience is, you've been there a long time, you are not going to go off and do M&A in any other country at the moment. You are focused on this. Is that fair to say? Or you are going to surprise us?

Ryan King: Well, I mean, yes, I mean, to be honest with you, we think there's a lot of value to be unearthed here. There is absolutely a lot of value. So, this is really heads down in execution, but in time, you know, do we want to become a multi-jurisdictional Gold producer? You know, potentially, yes. And look, if somebody were to approach us in say six months, nine months or a year and say, hey, we think A plus B could equal significant higher valuations. We have no social issues, right? We're all investors. If we do the financial engineering and say, hey, there's an opportunity here. And you know, one of the things that we're recognising is that electronic trading in the market is becoming huge. You know: indexes, ETFs, things like this that we're not in yet. So, we think that'll be another leg up for us alone, in time. But size is starting to matter as the commodity price goes higher. So, you know, I think it's important for everyone in this space to not have that huge change of controls and social issues to be able to build a better product for people that want equities that are focused on Gold

Matthew Gordon: Again. You are beating me to it here. This is a terrible interview - you are beating me to these questions because that is what I was getting to, because what I'm hearing, what I'm feeling, and obviously, with the track record of the Newmarket guys and yourself, it feels like you want to build something, but you've got to take care of what's in front of you. You have got to get that right. You've just started, right? So, there has got to be some focus, and I get that you are building cash and we will put the COVID-19, I think the market is even putting the COVID-19 thing aside for now. They see what you are trying to do there. There's some scale, but it also feels to me like you are trying to do kind of like an Equinox situation where they have pieced together some very ordinary assets, but they are processing them in a highly efficient way. And I guess that's what I want to understand about your mentality of the management team is, what is the end game here? What are people buying into where they come and talk to you for the first time? Look at your projects, look at the management team. Look at the assets and go, what are these guys about? And at this price, can I still make money?

Ryan King: Yes, I mean, a great question. You know, from what we see right now in the organisation, as I mentioned prior to the pandemic, we guided the market on about 140,000oz to 150,000 oz of consolidated production, around USD$1,000 All in costs. (AIC) And even as we learn more about the optimisation opportunities, the integration opportunities, cost-saving opportunities, we're already starting to see the opportunities, as you mentioned: higher-grade. So, in 2021 we're going to see grade increasing but actually throughput at the Libertad mill coming down. So, grade increasing, throughput coming down. We think, you know, 70,000oz to 75,000oz will be processed through their, temporary suspension aside in 2020, but because of the grade increasing, you know, by 2022 we could be up to 120 to 130,000oz in our new operating philosophy alone. So, when you think about that and you peel that back, today we're 140 to 150 on a consolidated basis, by 2022, we could be 200,000oz to 220,000oz and then you layer on all the exploration on top of that. All of a sudden, this story gets very excited.

You know, I'll use K92 as an example. Everyone's sort of discredited that, you know, it's Papua New Guinea, you don't really know about it. But those guys have done a fantastic job of executing and finding more. If you strip everything away, that's what we do. You know, we're always depleting. You have to find more, or you have to do creative financially engineered M&A to create and unlock more value. And so that's why we're doing 50,000m of drilling. So, I think, you know, I think there's a lot of value to be unlocked here with Calibre and these assets and our new approach.

 And to your point, you know, we're generating great cash so we can reinvest in our business and our asset base to do that. Find more, and we're already having success doing that.

Matthew Gordon: So this year, you were talking about spending about USD$12M, obviously that will be, I guess, pushed out a little bit. Isn't it amazing what you can do with cash?

Ryan King: : Yes. When you don't have to continually go back to the market and sort of say, hey, we've got this target we need to, unfortunately, dilute a bit more, raise some more cash to drill this target. With the operations, we're affording ourselves the ability to be able to reinvest in the assets, find more and unlock more value for our shareholders. But you know, on that note, you know, I'll just say that during the fourth quarter of last year, one of the big unlocking values for us was, there's two big ball mills at the Libertad processing facility. Darren identified, hey, you know, we could temporarily suspend or idle out one of those ball mills and still have excellent production. By doing that, we've saved ourselves approximately USD$500,000 to USD$550,000pm. And almost by that one initiative, afforded ourselves half of our exploration spend for 2020.

So, it's all of these little pieces that are coming together to unlock much more value in the bigger picture. I think today our market capitalisation is around USD$250M. We have got USD$43M in cash at the end of Q1. And, and to your point, you know, isn't it great what you can do with cash. And when you have cash and no significant burns and no big debt covenants like we don't have, you can really effectively utilise that. And we put that in the ground. We put that into the multiple ore sources, wherever it may be, so that we can help unlock more value. Because at the end of the day, ourselves as management, we own a lot of this equity. We want it to succeed. We want our shareholders to succeed. I think our, we own a little over 5% of the company, all at the same prices that our shareholders do.

Matthew Gordon: Ryan, that's a fantastic first introduction to the company. I'm delighted to have been able to talk to you. I'm excited to see what you do with this cash optionality that you have. I get the big picture. I guess it's a case of the way that you go about trying to deliver that. That is what I think I could get excited about here. Let's stay in touch, pick up the phone when there's something to say, because we'd be delighted to talk to you again.

Ryan King: Okay. Thank you very much for the opportunity to speak to yourself and some of your subscribers and followers. I really appreciate the opportunity and yes, absolutely, it'll be a busy year in front of us. We will have lots of news and I'll be sure to reach out. So thank you again.

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