Pacific Trader: While gold hits new highs, Calibre Mining is riding even higher

Calibre Mining has seen its stock go up 40 percent since it acquired a new mine at the start of the year

The stock: Markets in general are looking wobbly after their unexpected surge over the winter. Commodities and commodity producers, however, appear to be still on the make. Gold, for instance, is up 20 percent just since February––something few expected given the persistence of high interest rates, which make cash holdings more attractive. One B.C. gold miner generating some additional alpha for shareholders’ portfolios is Calibre Mining Corp. (TSX:CXB), which has risen more than 40 percent year to date.

The drivers: Yes, that rising gold price is lifting all boats, but there are a couple of reasons Vancouver-based Calibre is particularly buoyant. Despite being a growing mid-tier producer with mines in Nicaragua and Nevada that put out 283,000 ounces of gold last year, the company has long been modestly valued compared to its peers.

In January, Calibre closed the $345-million takeover of Marathon Gold Corp., through which it acquired the mostly constructed Valentine mine in Newfoundland. That pit is scheduled to go into production in 2025. If all goes to plan, the firm will be churning out close to half a million ounces in the 2026-27 time frame, with the balance coming from low-risk jurisdictions in Canada and the U.S.

All this is being done from a position of profitability, too. Net income roughly doubled to $85 million in 2023 on $562 million in revenues. It’s not all that surprising, then, that at $1.86 a share as of Tuesday (April 23), Calibre is up 43 percent on the year so far.

Word on the street: Jeffries analyst Matthew Murphy raised his price target on Calibre Mining to $2.25 from $2 this week with a “buy” rating.

Coming and going: Three funds advised by Orion Resource Partners LP have sold an 8.3-percent stake in Vancouver-based Capstone Copper (TSX:CS) to a group of institutional investors including Australia’s public pension fund. Orion is still one of the largest shareholders in Capstone, with 12 percent of shares outstanding.