Welcome!

News Feed Item

Gran Colombia Gold announces fourth quarter and full year 2013 results; meets 2013 all-in sustaining costs targets

TORONTO, March 31, 2014 /PRNewswire/ - Gran Colombia Gold Corp. (TSX: GCM, OTC: 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, 2013.  All financial figures contained herein are expressed in U.S. dollars unless otherwise noted.

2013 Highlights

  • Total gold production of 102,792 ounces for the year, a 1.9% increase over last year. For the fourth quarter of 2013, the Company produced 22,106 ounces of gold, impacted by lower head grades being mined by the contract miners in the El Silencio mine at Segovia. 2014 production, influenced by the timing of higher grade areas becoming accessible for mining at Segovia, is expected to be between 102,000 to 122,000 ounces.
  • Revenue of $148.5 million in 2013 reflected the impact of the decline in metals prices this year with the Company realizing an average of $1,416 per ounce of gold and $24 per ounce of silver, down 15% and 20%, respectively, from last year. To protect its cash flow, the Company responded with significant cost reduction initiatives to lower its all-in sustaining cost per ounce.
  • The Company's aggressive cost savings program, which included an approximately 50% reduction in its workforce at Segovia this year, has resulted in a 12.5% decrease in 2013's total cash costs to $1,152 per ounce compared with $1,317 per ounce last year and a 21% decrease in all-in sustaining costs to $1,230 per ounce in the fourth quarter of 2013 compared with $1,558 per ounce in the first quarter of the year. The Company expects that the full year impact of its 2013 savings initiatives, coupled with additional workforce reductions at Segovia implemented in early 2014 and improving head grades at Segovia as 2014 progresses, will reduce its all-in sustaining cost to an average of $950 to $1,025 per ounce in 2014.
  • G&A decreased by 32% to $11.2 million in 2013, equivalent to $108 per ounce sold, from $16.5 million or $168 per ounce last year. G&A in the fourth quarter of $2.3 million was approximately 50% lower than the fourth quarter last year and represented the fourth consecutive quarter that the cost savings program lowered the quarterly run rate. In 2014, G&A will benefit from the full year impact of the 2013 cost reductions and is expected to decrease to about $8 million, averaging between $65 and $80 per ounce.
  • Development: The Company's Pampa Verde expansion project at the Segovia Operations continues to advance with excavations at the plant site nearing completion and construction set to begin early in the second quarter.  The new 2,500 tpd plant will be ready for testing in the first quarter of 2015 and commence full production by mid-2015. Mine development activities are progressing at all mines at Segovia. Dewatering at El Silencio is in process to open access to the higher grade levels at depth in the mine. Construction of the shaft at Providencia will commence early in the second quarter and be completed by the end of the third quarter, allowing the Company to implement mechanized mining in Providencia before the end of the year. Mini jumbos are being brought in during the second quarter of this year to facilitate development of higher grade stopes at Sandra K for production in the fourth quarter and a ramp will be constructed at the Carla mine to increase production rates from higher grade areas by the third quarter this year. The Pampa Verde Project remains within its $84 million capital budget.
  • Exploration: In August 2013, following successful completion of a 20,000 meter drilling campaign to upgrade and extend its resources at its producing Segovia Operations, the Company announced a new mineral resource estimate with a 58% increase in the Measured and Indicated categories to 0.5 million ounces of gold with an average grade of 15.2 g/t and a 27% increase in the Inferred category to 1.4 million ounces of gold with an average grade of 11.0 g/t. In February 2014, the Company published a preliminary economic assessment ("PEA") of its mineral resource estimate at Segovia with a NPV10 at a long-term average gold price of $1,200 per ounce of $194 million from about one million contained ounces over an approximately seven-year mine life. The Company is confident that further exploration to be carried out over the next few years will upgrade and extend the mine life at Segovia.
  • Liquidity: In March 2014, the Company completed a C$16.3 million equity offering, the net proceeds of which have been used to repay the $4 million bridge loan and the balance will be used to reduce accounts payable by up to $3.5 million and to bolster the Company's cash position with the remaining approximately $6 million to improve its liquidity as it completes the Pampa Verde expansion.

Serafino Iacono, Executive Co-Chairman of Gran Colombia, commenting on the Company's achievements in 2013, said, "We are pleased with our progress in 2013 in reducing our all-in sustaining costs and we are continuing to implement the actions required to achieve further reductions in our all-in sustaining costs and to grow our production, better positioning Gran Colombia to generate improved cash flow as work continues to bring our high-grade, lower cost Pampa Verde project on-line at the end of this year."

Financial and Operating Summary

A summary of the financial and operating results for the fourth quarter and full year 2013 is as follows:

              Fourth Quarter            Year
  2013 2012 2013 2012
         
Operating data:        
Gold produced (ounces) 22,106 22,116 102,792 100,895
Gold sold (ounces) 21,247 21,198 102,080 98,439
Average realized gold price ($/oz sold)   $     1,295 $      1,728 $      1,416 $        1,664
Total cash costs ($/oz sold) (1) 1,077 1,534 1,152 1,317
All-in sustaining costs ($/oz sold) (1) 1,230 N/A 1,322 N/A
         
Financial data:
($000's, except per share amounts)
       
Revenue $   28,460 $    37,758 $  148,531 $    168,243
Impairment charges (58,266) (505) (163,824) (4,084)
Net loss attributable to shareholders (65,287) (22,852) (165,158) (36,172)
Basic and diluted loss per share (4.27) (1.50) (10.81) (2.37)
Adjusted net loss (1) (2,626) (11,740) (15,871) (18,586)
Basic and diluted adjusted loss per share (1) (0.17) (0.77) (1.04) (1.22)
Cash and cash equivalents 1,609 1,298 1,609 1,298
Cash in trust, current and non-current 31,774 84,937 31,774 84,937
Total debt, including current portion, at fair values 172,515 188,449 172,515 188,449
      (1)     Refer to Additional Financial Measures in the Company's MD&A.

Segovia Operations

At the Segovia Operations, gold production was up 1.3% to 80,226 ounces in 2013. Gold production at Segovia in the fourth quarter of 2013 was hampered by a reduction in head grades in material sourced from the contract miner at the El Silencio mine. The Company took immediate action to rectify the situation and head grades should return to normal levels in 2014. In 2013, the Company implemented a number of cost savings initiatives that resulted in a 32% reduction its cash costs to $1,089 per ounce in the fourth quarter of 2013, the lowest since the Company acquired the mines in 2010, from $1,604 per ounce in the fourth quarter last year. These initiatives included a workforce reduction carried out in several phases throughout the year that cut the workforce in about half at the Company-operated mines. In January 2014, the Company completed a further restructuring of its Segovia Operations to continue the expansion and modernization of mining activities and improve security in the mining and processing operations. Certain key functions are now directly employed by the Company and a local contractor has been engaged to carry out the mining activities in the Company-operated areas at Segovia. This new mine contractor is being remunerated for their services based on tonnes mined, thereby lowering mining costs per tonne and turning the former fixed operating cost structure at the Company-operated mines into a variable cost more closely aligned with production, revenues and cash flows.

Marmato Operations

At the Marmato Underground mine, the successful crusher upgrade completed in mid-August increased tonnes milled by 16.5% in the second half of 2013. Operations remained steady in 2013 resulting in gold production of 22,566 ounces, a 3.9% increase over the prior year. The impact on fixed costs of increased tonnages and gold production in the second half of 2013 helped to reduce the mine's cash cost to $1,047 per ounce in the fourth quarter of 2013 from $1,273 per ounce in the fourth quarter last year.

Impairment

In 2013, the Company has recorded impairment charges of $163.8 million or approximately $9.60 per share on an after-tax basis. The impairment charges include $105 million recorded in the second quarter of 2013 related to its exploration properties, primarily its Marmato Project, and $58 million in the fourth quarter of 2013 related to its Segovia Operations. These impairment charges were triggered by the significant declines in the Company's market capitalization and in gold and silver prices in 2013, together with the resultant impact on the gold industry in general.

The Marmato Project continues to be a world class gold and silver deposit. However, due to the lower metals prices, the in situ market value of this undeveloped property has likely decreased. Similarly, the current market environment is having an adverse impact on junior exploration budgets and financings, reducing the Company's potential ability to fully recover its investments in the El Zancudo and Mazamorras exploration properties through either joint venture or sale transactions.

In conjunction with finalizing its 2013 year end results, the Company completed a fair value assessment of its Segovia Operations using a $1,300 per ounce long-term gold price and the mining plan included in the February 2014 PEA. The reduction in both the long-term gold price and the mineable contained ounces in the 2014 PEA mining plan compared with the analyses completed in prior periods triggered a $58 million impairment charge recorded in the fourth quarter of 2013. If the long-term gold price had remained at $1,400 per ounce, no impairment would have been recorded against the carrying value of the Segovia Operations at December 31, 2013.

Outlook

In 2014, Gran Colombia remains focused on the controllable aspects of its cash generation, including execution of its mine plan, to ensure it meets all financial obligations while the Pampa Verde expansion project at the Segovia Operations is being constructed. Total gold production for 2014 for the Company will be influenced by the timing of when the higher grade areas will ultimately become accessible for mining at Segovia and is expected to total between 102,000 to 122,000 ounces, with 80,000 to 100,000 ounces at Segovia and 22,000 ounces at the Marmato Underground mine. Mine development at Segovia, including a shaft at Providencia, dewatering at El Silencio, a ramp at the Carla mine and additional development at Sandra K, will facilitate the Company's ability in the fourth quarter of 2014 to implement mechanized mining in certain of the Company-operated areas at Segovia to increase mining rates and reduce mining costs. In addition, mine development will open access to higher grade stopes that will also generate production growth and reductions in all-in sustaining costs on a per ounce basis as the year progresses.

The Company's all-in sustaining cost averaged $1,322 per ounce in 2013. As a result of actions taken in 2013 and so far in 2014 to reduce production costs and G&A, improvements in head grades as the year progresses and continuing to keep sustaining capital expenditures to a minimum while the Pampa Verde project is completed, the Company expects its all-in sustaining costs for the full year in 2014 will average between $950 and $1,025. This includes an average total cash cost for the year of $850 to $900 per ounce, well below the average of $1,152 per ounce achieved in 2013, and G&A expenses of $65 to $80 per ounce, down from $108 per ounce in 2013. Sustaining capital expenditures, including a limited amount of exploration and geology spending at Segovia to support execution of the mine plan, is expected to amount to approximately $3.4 million in 2014 and the all-in sustaining cost includes a provision of approximately $11 to $13 per ounce for environmental discharge fees at Segovia.

From an investment perspective, the primary focus in 2014 remains with the construction and development activities at the Pampa Verde expansion project at the Segovia Operations. The project remains on track and within its capital budget. Capital expenditures, exploration and mine development in support of the Pampa Verde expansion project are not included in all-in sustaining cost.

Webcast

As a reminder, the Company will host a conference call and webcast on Tuesday, April 1, 2014 at 9:30 a.m. Eastern (8:30 a.m. Bogota) time to discuss the 2013 year end results and provide an operational update.

Webcast and call-in details are as follows:

    Live Event link:               http://www.media-server.com/m/p/gfqszw6r
    Toronto & International:     1 (514) 841-2157
    North America Toll Free:     1 (888) 771-4371
    Colombia Toll Free:       01 800 9 156 924
    Conference ID:       36866157

A replay of the webcast will be available at www.grancolombiagold.com from April 1st, 2014 until April 27, 2014.

About Gran Colombia Gold Corp.

Gran Colombia is a Canadian-based gold and silver exploration, development and production company with its primary focus in Colombia. Gran Colombia is currently the largest underground gold and silver producer in Colombia with several underground mines in operation at its Segovia and Marmato Operations. Gran Colombia is currently advancing a project to develop a modern, large-scale, gold and silver mine at its Segovia operations.

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 future financial or operating performance of the Company and its projects and, specifically, statements concerning anticipated growth in annual gold production and reduction of cash costs. 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 31, 2014, 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.

 

SOURCE Gran Colombia Gold Corp.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Enterprises are adopting Kubernetes to accelerate the development and the delivery of cloud-native applications. However, sharing a Kubernetes cluster between members of the same team can be challenging. And, sharing clusters across multiple teams is even harder. Kubernetes offers several constructs to help implement segmentation and isolation. However, these primitives can be complex to understand and apply. As a result, it’s becoming common for enterprises to end up with several clusters. Thi...
In his session at 21st Cloud Expo, Carl J. Levine, Senior Technical Evangelist for NS1, will objectively discuss how DNS is used to solve Digital Transformation challenges in large SaaS applications, CDNs, AdTech platforms, and other demanding use cases. Carl J. Levine is the Senior Technical Evangelist for NS1. A veteran of the Internet Infrastructure space, he has over a decade of experience with startups, networking protocols and Internet infrastructure, combined with the unique ability to it...
"ZeroStack is a startup in Silicon Valley. We're solving a very interesting problem around bringing public cloud convenience with private cloud control for enterprises and mid-size companies," explained Kamesh Pemmaraju, VP of Product Management at ZeroStack, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"Infoblox does DNS, DHCP and IP address management for not only enterprise networks but cloud networks as well. Customers are looking for a single platform that can extend not only in their private enterprise environment but private cloud, public cloud, tracking all the IP space and everything that is going on in that environment," explained Steve Salo, Principal Systems Engineer at Infoblox, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventio...
"Codigm is based on the cloud and we are here to explore marketing opportunities in America. Our mission is to make an ecosystem of the SW environment that anyone can understand, learn, teach, and develop the SW on the cloud," explained Sung Tae Ryu, CEO of Codigm, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
The question before companies today is not whether to become intelligent, it’s a question of how and how fast. The key is to adopt and deploy an intelligent application strategy while simultaneously preparing to scale that intelligence. In her session at 21st Cloud Expo, Sangeeta Chakraborty, Chief Customer Officer at Ayasdi, provided a tactical framework to become a truly intelligent enterprise, including how to identify the right applications for AI, how to build a Center of Excellence to oper...
"IBM is really all in on blockchain. We take a look at sort of the history of blockchain ledger technologies. It started out with bitcoin, Ethereum, and IBM evaluated these particular blockchain technologies and found they were anonymous and permissionless and that many companies were looking for permissioned blockchain," stated René Bostic, Technical VP of the IBM Cloud Unit in North America, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventi...
Gemini is Yahoo’s native and search advertising platform. To ensure the quality of a complex distributed system that spans multiple products and components and across various desktop websites and mobile app and web experiences – both Yahoo owned and operated and third-party syndication (supply), with complex interaction with more than a billion users and numerous advertisers globally (demand) – it becomes imperative to automate a set of end-to-end tests 24x7 to detect bugs and regression. In th...
Large industrial manufacturing organizations are adopting the agile principles of cloud software companies. The industrial manufacturing development process has not scaled over time. Now that design CAD teams are geographically distributed, centralizing their work is key. With large multi-gigabyte projects, outdated tools have stifled industrial team agility, time-to-market milestones, and impacted P&L stakeholders.
High-velocity engineering teams are applying not only continuous delivery processes, but also lessons in experimentation from established leaders like Amazon, Netflix, and Facebook. These companies have made experimentation a foundation for their release processes, allowing them to try out major feature releases and redesigns within smaller groups before making them broadly available. In his session at 21st Cloud Expo, Brian Lucas, Senior Staff Engineer at Optimizely, discussed how by using ne...
"Cloud Academy is an enterprise training platform for the cloud, specifically public clouds. We offer guided learning experiences on AWS, Azure, Google Cloud and all the surrounding methodologies and technologies that you need to know and your teams need to know in order to leverage the full benefits of the cloud," explained Alex Brower, VP of Marketing at Cloud Academy, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clar...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
"CA has been doing a lot of things in the area of DevOps. Now we have a complete set of tool sets in order to enable customers to go all the way from planning to development to testing down to release into the operations," explained Aruna Ravichandran, Vice President of Global Marketing and Strategy at CA Technologies, in this SYS-CON.tv interview at DevOps Summit at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.