Gran Colombia Gold Corp. (TSX: GCM; OTCQX: TPRFF) announced today
the release of its audited consolidated financial statements and
accompanying management’s discussion and analysis (MD&A) for
the year ended December 31, 2019. All financial figures contained
herein are expressed in U.S. dollars (“USD”) unless otherwise
noted.
Serafino Iacono, Executive Chairman of Gran
Colombia, commenting on the Company’s results for 2019, said, “We
had a very solid year in 2019 with record production and new highs
for revenue, adjusted EBITDA, free cash flow and adjusted earnings
that helped us to significantly strengthen our balance sheet. Our
market capitalization has responded and we were delighted to be
acknowledged in the TSX30 and the OTCQX Best 50 based on our share
price performance. We are excited about the new company, Caldas
Gold, and the opportunity for value creation that lies ahead with
the expansion on the underground mining operations at Marmato.
Today we have also announced an update on our mineral resources and
reserves at Segovia and we are pleased to report that we have not
only replaced the mineral resources and reserves we mined last
year, but our drilling programs have given us several high priority
targets we will be following up in our 2020 drilling program to add
more reserves and mine life at this high-grade operation. We are
continuing to monitor developments in the battle against COVID-19
and we are adapting our response plan as new information becomes
available almost daily. Keeping our workers and their families
healthy is our number one priority. We are fortunate that we have
been able to continue operating at this time and we will provide
updates on our progress. We are also working with our social
foundation partners to provide food and aid to the local
communities in which we operate. On behalf of the Board and
management, I would like to thank all of our workers for adapting
to the required protocols during this very difficult time.”
Fourth Quarter and Full Year 2019
Highlights
- As previously announced, Gran
Colombia set new quarterly and annual records for gold
production in 2019 with 65,237 ounces produced in the
fourth quarter of 2019, up 18% over the fourth quarter of 2018, and
total annual production for 2019 of 239,991 ounces, up 10% over
last year, reaching the upper end of our guidance.
- Revenue amounted
to $88.5 million in the fourth quarter of 2019, up 30% over the
fourth quarter last year, getting a boost from the 21% increase in
spot gold prices. For 2019, production growth, the higher spot gold
and silver prices and the reduction in refining charges all
combined to increase annual revenue to $326.5 million, up 22% over
last year.
- Total cash costs
(1) per ounce averaged $685 per ounce in the fourth
quarter of 2019 compared with $698 per ounce in the fourth quarter
last year, reflecting a reduction in Segovia’s total cash cost to
$607 per ounce in the fourth quarter of 2019 from $623 per ounce in
the fourth quarter last year. In 2019, the Company’s total cash
costs decreased to $661 per ounce from $680 per ounce in
2018.
- All-in sustaining
costs (“AISC”) (1) and All-in
costs (1) of $1,003 per ounce and $1,048 per ounce,
respectively, in the fourth quarter of 2019 reflected increased
levels of capital and exploration spending and arbitration-related
costs in G&A, compared with $934 per ounce and $951 per ounce,
respectively, in the fourth quarter last year. For 2019, AISC and
All-in costs per ounce were $916 and $946 per ounce, respectively,
compared with $919 and $930, respectively, last year. For 2019, the
Company met its guidance with AISC and All-in costs for the full
year below $925 per ounce and $950 per ounce, respectively.
- The Company reported
adjusted EBITDA (1) of $40.6 million for the
fourth quarter of 2019, up 71% over the fourth quarter last year,
bringing the total for 2019 to $146.7 million, up 43% over
2018.
- Net cash provided by
operating activities in the fourth quarter of 2019 of
$34.6 million brought the total for 2019 to $103.3 million, up 30%
over last year. The Company’s Free Cash Flow
(1) in the fourth quarter of 2019 of $22.0 million brought
the total for 2019 to $60.6 million, up 38% over last year.
- The Company’s balance
sheet continued to benefit from 2019’s operating and
financial performance and the private placements of Convertible
Debentures in April and common shares and warrants in November,
increasing cash and cash equivalents to $84.2 million at December
31, 2019 from $35.6 million at the end of 2018. At the end of 2019,
the aggregate principal amount of Gold Notes issued and outstanding
had been reduced through four quarterly repayments in 2019 to $68.8
million, down from $88.3 million at the end of 2018, and the
Convertible Debentures stood at CA$20 million.
- Eric Sprott acquired an 11.24%
equity interest in Gran Colombia through his participation in two
private placements over the last five months. In November 2019, the
Company closed a CA$15 million non-brokered private placement (the
“2019 Private Placement”) resulting in the issuance of
approximately 3.3 million common shares and 3.3 million common
share purchase warrants exercisable at CA$5.40 per share expiring
November 5, 2023. In February 2020, Gran Colombia completed a CA$40
million non-brokered private placement (the “2020 Private
Placement”) resulting in the issuance of approximately 7.1 million
common shares and 7.1 million common share purchase warrants
exercisable at CA$6.50 per share expiring February 6,
2023.
- The Company completed the spin-out
of its Marmato Mining Assets through a reverse takeover transaction
(the “Bluenose RTO Transaction”). The resulting issuer, named
Caldas Gold Corp. (“Caldas Gold”), commenced trading on the TSXV on
February 28, 2020 under the symbol “CGC”.
- As of March 27, 2020, the total
issued and outstanding common shares of the
Company is 60.8 million and after inclusion of stock options,
warrants and the Convertible Debentures, the Company’s fully
diluted common shares would total approximately 88.7 million.
- On March 31, 2020, using a portion
of the cash from the 2020 Private Placement, the Company is
redeeming 30% of the aggregate principal amount of its Gold Notes
at approximately 110% of the principal amount being redeemed,
reducing the issued and outstanding balance to $44.7
million.
- The Company reported a net
loss for the fourth quarter of 2019 of $148.8 million
($2.86 per share) compared with net income of $8.0 million ($0.17
per share) in the fourth quarter last year. The fourth quarter 2019
net loss includes an after-tax impairment charge of $153.6 million
associated with the Company’s exploration and evaluation assets in
Zona Alta and Echandia at the Marmato Project. For 2019, the net
loss amounted to $131.2 million ($2.65 per share) compared with a
net loss of $3.4 million ($0.10 per share) last year.
- Adjusted net income
(1) for the fourth quarter of 2019 was $17.1 million
($0.33 per share), up from $14.5 million ($0.30 per share) in the
fourth quarter last year. For 2019, adjusted net income amounted to
$60.5 million ($1.22 per share) compared with $42.5 million ($1.23
per share) in last year. The year-over-year increase in 2019’s
adjusted net income largely reflects the positive impact of
Segovia’s production growth, the increase in realized gold prices
and the reduction in total cash costs per ounce sold on income from
operations in 2019, net of an associated increase in income tax
expense.
- The Company’s drilling
program at Segovia is continuing to provide encouraging
results, reaffirming confidence in the high grade nature of the
Segovia gold deposits and replacing Mineral Reserves and Resourced
mined in 2019. The updated Mineral Resource estimate as of December
31, 2019 comprises 3.6 million tonnes at a grade of 11.7 g/t
totalling 1.36 million ounces of gold in Measured and Indicated
Resources, up 2% from last year. Inferred Resources increased
to 4.1 million tonnes at a grade of 9.6 g/t totalling 1.27 million
ounces of gold, up 9% compared to last year. The Company also
reported an updated Mineral Reserve for Segovia with a total of 2.0
million tonnes at an average grade of 10.5 g/t representing 670,000
proven and probable ounces of gold as of December 31, 2019.
- In October 2019, the Company
completed the acquisition of a 19.89% equity investment in Western
Atlas Resources Inc. and in December 2019, the Company acquired a
$5 million convertible debenture in Gold X Mining Corp. to help
fund Gold X Mining to exercise its option to purchase 100% of the
interest in the Toroparu Project in Guyana.
Selected Financial
Information
|
|
Fourth Quarter |
Year |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
2017 |
|
|
Operating data |
|
|
|
|
|
|
Gold produced (ounces) |
|
65,237 |
|
|
55,260 |
|
|
239,991 |
|
|
218,001 |
|
|
173,821 |
|
|
Gold sold (ounces) |
|
59,169 |
|
|
56,360 |
|
|
233,866 |
|
|
214,622 |
|
|
173,645 |
|
|
Average realized gold price ($/oz sold) |
$ |
1,480 |
|
$ |
1,198 |
|
$ |
1,381 |
|
$ |
1,239 |
|
$ |
1,226 |
|
|
Total cash costs ($/oz sold) (1) |
|
685 |
|
|
698 |
|
|
661 |
|
|
680 |
|
|
720 |
|
|
AISC ($/oz sold) (1) |
|
1,003 |
|
|
934 |
|
|
916 |
|
|
919 |
|
|
942 |
|
|
All-in costs ($/oz sold) (1) |
|
1,048 |
|
|
951 |
|
|
946 |
|
|
930 |
|
|
942 |
|
|
|
|
|
|
|
|
|
Financial
data ($000’s, except per share amounts) |
|
|
|
|
|
|
Revenue |
$ |
88,463 |
|
$ |
68,207 |
|
$ |
326,480 |
|
$ |
268,525 |
|
$ |
215,365 |
|
|
Adjusted EBITDA (1) |
|
40,607 |
|
|
23,736 |
|
|
146,675 |
|
|
102,386 |
|
|
75,456 |
|
|
Impairment (charge) reversal |
|
(175,989) |
|
|
- |
|
|
(175,989) |
|
|
- |
|
|
45,307 |
|
|
Net (loss) income |
|
(148,849) |
|
|
8,038 |
|
|
(131,164) |
|
|
(3,379) |
|
|
36,848 |
|
|
Per share - basic |
|
(2.86) |
|
|
0.17 |
|
|
(2.65) |
|
|
(0.10) |
|
|
1.81 |
|
|
Per share - diluted |
|
(2.86) |
|
|
0.17 |
|
|
(2.65) |
|
|
(0.11) |
|
|
0.61 |
|
|
Adjusted net income (1) |
|
17,113 |
|
|
14,517 |
|
|
60,460 |
|
|
42,498 |
|
|
22,895 |
|
|
Per share - basic |
|
0.33 |
|
|
0.30 |
|
|
1.22 |
|
|
1.23 |
|
|
1.13 |
|
|
Per share - diluted |
|
0.27 |
|
|
0.29 |
|
|
1.04 |
|
|
0.59 |
|
|
0.30 |
|
|
Net cash provided by operating activities |
|
34,635 |
|
|
23,463 |
|
|
103,276 |
|
|
79,643 |
|
|
50,527 |
|
|
Free cash flow (1) |
|
21,953 |
|
|
14,444 |
|
|
60,611 |
|
|
44,040 |
|
|
25,560 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
Balance
sheet ($000’s): |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
84,239 |
|
$ |
35,645 |
|
$ |
3,272 |
|
|
Gold Notes, including current portion – principal amount
outstanding (2) |
|
68,750 |
|
|
88,250 |
|
|
- |
|
|
Convertible Debentures – principal amount outstanding (3) |
|
CA20,000 |
|
|
- |
|
|
- |
|
|
Former Convertible Debentures – principal amount outstanding
(4) |
|
- |
|
|
- |
|
|
140,811 |
|
- Refer to “Non-IFRS Measures” in the
Company’s MD&A.
- The Gold Notes were issued in 2018
and are recorded in the Financial Statements at fair value. At
December 31, 2019 and 2018, the carrying amounts of the Gold Notes
outstanding were $69.0 and $74.1 million, respectively.
- The Convertible Debentures were
issued in 2019 and are recorded in the Financial Statements at fair
value. At December 31, the carrying amount of the Convertible
Debentures outstanding was $21.1 million.
- The Former Convertible Debentures
were retired in 2018 and were recorded in the Financial Statements
at amortized cost. At December 31, 2017, the carrying amount of the
Former Convertible Debentures outstanding was $98.7 million.
Marmato Project Impairment
Charge
During the fourth quarter of 2019, the Company
recorded an impairment charge in the amount of
$176.0 million ($153.6 million net of tax) related to its Marmato
Project. The Company determined that the proposed spin-out of the
Zona Baja part of the Marmato Project through the Bluenose RTO
Transaction, along with its assessment of the prospects for the
Zona Alta and Echandia mining titles, were indicators that the
recoverable amount of the Marmato Project may be less than its
carrying amount of approximately $194.8 million. In the Bluenose
RTO Transaction, the arm’s length fair value assigned to the
Marmato Mining Assets in Zona Baja was $44.2 million. With the
spin-out of Zona Baja, including its operating mine, the Company
reassessed the separate fair value of the Zona Alta and Echandia
mining titles on a stand-alone basis. The Company has no
exploration operations in Zona Alta or Echandia and has not been
able to establish its own mining operations in these areas due to
the presence of illegal miners who have not only impeded any mining
operations by the Company in the area but have also curtailed
access to it. In addition, in May 2018, as a consequence of these
ongoing impediments to establishing mining operations, along with
certain related matters associated with its Segovia Operations, the
Company had filed the FTA Claim. The arbitration proceedings center
on claims against Colombia for its non-compliance with its
obligations under the Free Trade Agreement which effectively
continues to preclude the Company from establishing operations in
Zona Alta and Echandia. The arbitration proceedings are in process;
however, a decision on the matter is expected to be more than 12
months away. In light of the various factors considered by the
Company in evaluating its inability to develop Zona Alta and
Echandia, the Company concluded that, even if it could sell such
assets, the estimated fair value (less cost of disposal) realizable
through a potential sale process at the present time would be
negligible.
Outlook
The Company started 2020 with the completion of
two significant transactions in February. The CA$40 million
non-brokered private placement that closed in early February
enables the Company to deleverage its balance sheet and reduce its
debt service costs with an early redemption at the end of March of
30% of the aggregate principal amount of the Gold Notes issued and
outstanding. The spin-out of the Marmato Mining Assets in Zona Baja
into Caldas Gold, in which the Company holds a 74.4% equity
interest, in late February sets the stage for Caldas Gold to move
toward the eventual financing and development for the expansion of
the existing underground mining operation to incorporate the Deeps
mineralization. Caldas Gold is proceeding with the preliminary
feasibility study (“PFS”) which should be completed by mid-2020 and
has started a 15,000 meters drill program aimed at extending the
Main Zone down-plunge, from the 650-level down to the 400-level.
The drilling program also aims to test the hanging-wall and
footwall of the Main Zone, looking for satellite bodies and a
replica of the Deeps Zone.
In February 2020, the Company provided its
annual production guidance for this year. At its Segovia
Operations, total gold production for the first two months of 2020
amounted to 33,413 ounces and the Company indicated at the time
that it expects its annual gold production at Segovia for 2020 will
range between 200,000 and 220,000 ounces. Head grades averaged 15
g/t through the first two months of 2020 and are expected to
average approximately 14 g/t (+/- 5%) over the course of the full
year as the Company opens additional new areas within its existing
three mines and commences production from its Carla mine late in
the third quarter of 2020. Caldas Gold also indicated at the time
that it expects that with the implementation of the optimized mine
plan envisioned in the 2019 preliminary economic assessment
(“PEA”), the existing Marmato mine will produce a total of between
32,000 and 37,000 ounces of gold in 2020.
The World Health Organization declared COVID-19
to be a pandemic on March 11, 2020. COVID-19 has spread globally,
and actions taken in response to COVID-19 have interrupted business
activities and supply chains; disrupted travel; contributed to
significant volatility in the financial markets, resulting in a
general decline in equity prices and lower interest rates; impacted
social conditions; and adversely impacted local, regional, national
and international economic conditions, as well as the labor market.
To date, COVID-19 has not had any significant impact on production
or product shipments at Segovia and Marmato. However, the Company
has activated its business continuity program at its mine sites in
Colombia in response to a national quarantine that went into effect
on March 25, 2020 and is expected to continue through to mid-April
and possibly longer. To the extent possible, the Company expects
that the mines at Segovia and Marmato will continue to operate
during the quarantine period, leveraging stockpiled material and
supported by a contingent of employees, both Company and
contractor, who will remain isolated within the mine camps during
the quarantine period to carry out mine, plant and other
operations. The Company is continuing to monitor the situation and
at this point in time, is taking remedial action as the situation
unfolds. However, in light of COVID-19, the Company has taken steps
to slow down discretionary operating and capital expenditures to
preserve its liquidity during this unusual situation. The Gold
Trust account already holds sufficient physical gold to meet the
April 30th quarterly amortizing payment of the Gold Notes and the
Company’s cash balances are sufficient to meet its debt service
other financial obligations through the balance of the year. There
is risk in the event of an extended quarantine or other
circumstances which disrupt the Company’s operations over a
prolonged period that the Company’s production could be impacted in
the future as the situation unfolds, which may cause the Company to
have to revise its production guidance and outlook for 2020
accordingly. The Company will provide further guidance regarding
expected cost metrics and planned capital and exploration spending
once the situation returns to normal and it has a more fulsome
understanding of the impact of the COVID-19 pandemic on the
Company’s 2020’s operating and financial results.
Segovia Operations – Mineral Resource
and Reserve Update
Gran Colombia also announced today that it has
completed updated Mineral Resource and Mineral Reserve estimates
for its Segovia Operations prepared in accordance with the Canadian
Institute of Mining Metallurgy and Petroleum (“CIM”) Definition
Standards incorporated by reference in National Instrument 43-101
(“NI 43-101”) with an effective date of December 31, 2019.
Highlights of the December 31, 2019 MRE update
include:
- Total Measured & Indicated
Resources increased to 3.6 million tonnes at a grade of 11.7 g/t
totalling 1.36 million ounces of gold, up 2% from last year.
- Total Inferred Resources increased
to 4.1 million tonnes at a grade of 9.6 g/t totalling 1.27 million
ounces of gold, up 9% compared to last year.
- The Company replaced Mineral
Resources mined in 2019 and the largest increases came at the El
Silencio and Sandra K mines.
- The updated MRE continues to
reaffirm confidence in the high grade nature of the Segovia gold
deposits.
- The MRE for Las Verticales and
Carla have not been updated as no new information is currently
available and the previous estimates for these projects remain
valid.
The following table summarizes the MRE for the
Segovia Operations as of December 31, 2019 and changes by category
in tonnes, grade and ounces of gold compared with the previous
total MRE as of December 31, 2018:
Project |
Deposit |
Type |
Measured |
Indicated |
Measured & Indicated |
Inferred |
Tonnes(kt) |
Grade(g/t) |
Au Metal(koz) |
Tonnes(kt) |
Grade(g/t) |
Au Metal(koz) |
Tonnes(kt) |
Grade(g/t) |
Au Metal(koz) |
Tonnes(kt) |
Grade(g/t) |
Au Metal(koz) |
Segovia |
Providencia |
LTR |
118 |
|
15.9 |
|
60 |
|
296 |
|
13.0 |
|
124 |
|
414 |
|
13.8 |
|
184 |
|
315 |
|
8.3 |
|
84 |
|
Pillars |
108 |
|
26.1 |
|
90 |
|
116 |
|
12.1 |
|
45 |
|
224 |
|
18.8 |
|
135 |
|
389 |
|
20.0 |
|
249 |
|
Sandra K |
LTR |
|
|
|
385 |
|
10.3 |
|
128 |
|
385 |
|
10.3 |
|
128 |
|
315 |
|
8.6 |
|
87 |
|
Pillars |
|
|
|
152 |
|
10.9 |
|
53 |
|
152 |
|
10.9 |
|
53 |
|
|
|
|
El Silencio |
LTR |
|
|
|
824 |
|
11.5 |
|
304 |
|
824 |
|
11.5 |
|
304 |
|
1,736 |
|
8.3 |
|
462 |
|
Pillars |
|
|
|
1,459 |
|
10.7 |
|
504 |
|
1,459 |
|
10.7 |
|
504 |
|
395 |
|
12.1 |
|
154 |
|
Verticales |
LTR |
|
|
|
|
|
|
|
|
|
771 |
|
7.1 |
|
176 |
|
Subtotal Segovia Project |
LTR |
118 |
|
15.9 |
|
60 |
|
1,504 |
|
11.5 |
|
555 |
|
1,623 |
|
11.8 |
|
616 |
|
3,136 |
|
8.0 |
|
809 |
|
Pillars |
108 |
|
26.1 |
|
90 |
|
1,727 |
|
10.8 |
|
602 |
|
1,835 |
|
11.7 |
|
692 |
|
784 |
|
16.0 |
|
403 |
|
Carla |
Subtotal Carla Project |
LTR |
|
|
|
154 |
|
9.7 |
|
48 |
|
154 |
|
9.7 |
|
48 |
|
178 |
|
9.3 |
|
53 |
|
December 31, 2019 (1) |
|
226 |
|
20.8 |
|
151 |
|
3,385 |
|
11.1 |
|
1,205 |
|
3,611 |
|
11.7 |
|
1,356 |
|
4,098 |
|
9.6 |
|
1,265 |
|
December 31, 2018 (2) |
|
218 |
|
20.0 |
|
140 |
|
3,289 |
|
11.2 |
|
1,187 |
|
3,507 |
|
11.8 |
|
1,327 |
|
3,562 |
|
10.1 |
|
1,157 |
|
% Change vs previous |
|
4% |
|
4% |
|
8% |
|
3% |
|
-1% |
|
2% |
|
3% |
|
-1% |
|
2% |
|
15% |
|
-5% |
|
9% |
|
- The Mineral Resources are reported
at an in situ cut-off grade of 3.0 g/t Au over a 1.0 m
mining width, which has been derived using a gold price of US$1,400
per ounce and technical and economic parameters for the existing
underground mining and conventional gold mineralized material
processing using a gold recovery of 90.5%. Each of the mining areas
have been sub-divided into Pillar areas (“Pillars”), which
represent the areas within the current mining development, and
long-term resources (“LTR”), which lie along strike or down dip of
the current mining development. Mineral Resources are reported
inclusive of the Mineral Reserve. Mineral Resources are not Mineral
Reserves and do not have demonstrated economic viability. All
figures are rounded to reflect the relative accuracy of the
estimate. All composites have been capped where appropriate.
- Derived from the Amended NI 43-101
Technical Report Prefeasibility Study Update, Segovia Project,
Colombia, dated July 8, 2019, prepared by SRK Consulting (US) Inc.
(“SRK”).
During 2019, Gran Colombia continued its in-mine
and near mine drilling campaign designed to increase the Company’s
confidence in the potential to add new mineral reserves and extend
mine life. The results of the 2019 drilling program were included
in press releases issued by the Company on August 13, 2019, October
21, 2019 and February 24, 2020, including (i) the discovery of a
new high-grade vein called the 1180 Vein at El Silencio that is
expected to begin mining as early as the third quarter of 2020,
(ii) confirmation of the extension of the Manto Vein at El Silencio
down-dip by over 1,000 meters relative to Level 38, the deepest
level of mining on the Manto Vein by Frontino Gold Mining, (iii)
continued to delineate and further extend down-plunge, to
approximately Level 8, the main high-grade shoots at Sandra K and
(iv) successfully intercepted the faulted block of the Providencia
vein. The results of the 2019 drilling have identified potential
targets to increase the Mineral Resources at Segovia, all of which
will be followed up in the 2020 drilling program. The updated MRE
for the Segovia Operations incorporates assay results from an
additional 319 diamond drillholes totalling 52,335 meters of
sampling information in the databases compared to the previous
model, inclusive of the 2019 drilling program and the ongoing
validation exercises of historical information being completed by
the Company’s geologists. All diamond core has been logged and sent
for preparation at the SGS laboratories in Medellin, with
associated Quality Control Programs. In addition to the drilling, a
total of 5,700 channel samples totalling some 5,869 meters in
length were completed in 2019.
Ben Parsons, Principal Consultant (Resource
Geology) with SRK, prepared the Segovia MRE according to CIM
Definition Standards and will be supported by a NI 43-101
independent report which will be published and filed on the
Company’s website and SEDAR profile within 45 days. Mr. Parsons is
a Qualified Person as defined by NI 43-101. The NI 43-101
independent report will include detailed information on the key
assumptions, parameters and methods used to estimate the mineral
resources.
Segovia Life-of-Mine (“LoM”) Mineable Gold
Reserves Total 670,000 Contained Ounces Effective December 31,
2019
SRK has also completed preliminary results of an
updated Preliminary Feasibility Study (“PFS”) for the Segovia
Operations effective December 31, 2019 and is currently finalizing
the technical report. The PFS demonstrates that the Company has
replaced the Mineral Reserves mined in 2019. At December 31, 2019,
Segovia’s reported Mineral Reserve totaled 670,000 proven and
probable ounces of gold, based on 2.0 million tonnes of material at
an average head grade of 10.5 g/t, compared with 688,000 ounces at
the end of 2018.
The following table shows a breakdown of the
Mineral Reserve as of December 31, 2019 by area and category
compared with the total Mineral Reserve as of December 31,
2018:
Area |
Category |
Tonnes(kt) |
Grade(g/t) |
Au Metal(koz) |
Providencia |
Proven |
165 |
16.5 |
88 |
Providencia |
Probable |
154 |
12.0 |
59 |
Sandra K |
Probable |
249 |
8.9 |
71 |
El Silencio |
Probable |
1,313 |
9.9 |
419 |
Carla |
Probable |
104 |
10.0 |
33 |
December 31, 2019 (1) |
Total |
1,985 |
10.5 |
670 |
December 31, 2018 (2) |
Total |
1,941 |
11.0 |
688 |
% Change vs previous |
|
2% |
-5% |
-3% |
- Ore reserves are reported using a
gold cutoff grade ranging from 3.25 to 4.24 g/t depending on mining
area and mining method. The cutoff grade calculations assume
a $1,350/oz Au price, 90.5% metallurgical recovery, $6/oz smelting
and refining charges, $25/t G&A, $26/t processing cost, and
projected LoM mining costs ranging from $76/t to 115/t. The
reserves are valid as of December 31, 2019. Mining dilution is
applied to a minimum mining height and estimated overbreak (values
differ by area/mining method) using a zero grade. Reserves
are inclusive of Mineral Resources. All figures are rounded to
reflect the relative accuracy of the estimates. Totals may not sum
due to rounding. Mineral Reserves have been stated on the basis of
a mine design, mine plan, and cash-flow model. There are
potential survey unknowns in some of the mining areas and lower
extractions have been used to account for these unknowns. The
Mineral Reserves were estimated by Fernando Rodrigues, BS Mining,
MBA, MMSAQP #01405, MAusIMM #304726 of SRK, a Qualified
Person.
- Derived from the Amended NI 43-101
Technical Report Prefeasibility Study Update, Segovia Project,
Colombia, dated July 8, 2019, prepared by SRK.
A summary of the key LoM operating and financial
parameters of the current PFS dated as of December 31, 2019
compared with the previous PFS prepared as of December 31, 2018 is
as follows:
|
December 31, 2019 |
|
December 31, 2018 (1) |
|
|
|
|
|
|
Operating data: |
|
|
|
|
Ore milled (tonnes) |
1,985,000 |
|
1,941,000 |
|
Gold produced (ozs) |
607,000 |
|
623,000 |
|
|
|
|
|
|
Financial data (U.S. dollars): |
|
|
|
|
Expected long-term gold price |
$1,350/oz |
|
$1,275/oz |
|
LoM gold revenue |
$819 million |
|
$794 million |
|
Total cash cost, including refining |
$711/oz |
|
$695/oz |
|
LoM sustaining capex, including exploration |
$150 million |
|
$132 million |
|
Mine-level AISC |
$958/oz |
|
$907/oz |
|
Undiscounted after-tax free cash flow |
$151 million |
|
$148 million |
|
NPV after-tax free cash flow @ 5% |
$139 million |
|
$136 million |
|
- Derived from the Amended NI 43-101
Technical Report Prefeasibility Study Update, Segovia Project,
Colombia, dated July 8, 2019, prepared by SRK.
Fernando Rodrigues, BS Mining, MBA, MAusIMM,
MMSAQP Practice Leader/Principal Consultant (Mining Engineer) with
SRK, prepared the Segovia Mineable Reserve according to CIM
Definition Standards and will be supported by a NI 43-101
independent report which will be published and filed on the
Company’s website and SEDAR profile within 45 days. Mr. Rodrigues
is a Qualified Person as defined by NI 43-101. The NI 43-101
independent report will include detailed information on the key
assumptions, parameters and methods used to estimate the mineable
reserve.
Fourth Quarter and Year End 2018 Results
Webcast
As a reminder, Gran Colombia will host a
conference call and webcast on Tuesday, March 31, 2020 at 9:30 a.m.
Eastern Time to discuss the results.
Webcast and call-in details are as follows:
Live Event link: |
https://edge.media-server.com/mmc/p/dvu5jmwv |
International: |
1 (514) 841-2157 |
North America Toll Free: |
1 (866) 215-5508 |
Colombia Toll Free: |
01 800 9 156 924 |
Conference ID: |
49466343 |
A replay of the webcast will be available at
www.grancolombiagold.com from Tuesday, March 31, 2020 until
Thursday, April 30, 2020.
About Gran Colombia Gold
Corp.
Gran Colombia is a Canadian-based mid-tier gold
producer with its primary focus in Colombia where it is currently
the largest underground gold and silver producer with several mines
in operation at its high-grade Segovia Operations. Gran Colombia
owns approximately 74% of Caldas Gold Corp., a Canadian mining
company currently advancing a prefeasibility study for a major
expansion and modernization of its underground mining operations at
its Marmato Project in Colombia. Gran Colombia’s project pipeline
includes its Zancudo Project in Colombia together with an
approximately 21% equity interest in Gold X Mining Corp. (TSXV:
GLDX) (Guyana – Toroparu) and an approximately 20% equity interest
in Western Atlas Resources Inc. (“Western Atlas”) (TSX-V: WA)
(Nunavut – Meadowbank).
Additional information on Gran Colombia can be
found on its website at www.grancolombiagold.com and by reviewing
its profile on SEDAR at www.sedar.com.
Cautionary Statement on Forward-Looking
Information:
This news release contains "forward-looking
information", which may include, but is not limited to, statements
with respect to the continuation of operations during the COVID-19
situation, production guidance and anticipated business plans or
strategies. Often, but not always, forward-looking statements can
be identified by the use of words such as "plans", "expects", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates", or "believes" or variations (including
negative variations) of such words and phrases, or state that
certain actions, events or results "may", "could", "would", "might"
or "will" be taken, occur or be achieved. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of Gran Colombia to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking statements. Factors that could cause actual
results to differ materially from those anticipated in these
forward-looking statements are described under the caption "Risk
Factors" in the Company's Annual Information Form dated as of March
30, 2020 which is available for view on SEDAR at www.sedar.com.
Forward-looking statements contained herein are made as of the date
of this press release and Gran Colombia disclaims, other than as
required by law, any obligation to update any forward-looking
statements whether as a result of new information, results, future
events, circumstances, or if management's estimates or opinions
should change, or otherwise. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, the reader is
cautioned not to place undue reliance on forward-looking
statements.
For Further Information,
Contact:Mike DaviesChief Financial Officer(416)
360-4653investorrelations@grancolombiagold.com
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