TORONTO, ON--(Marketwired - August 11, 2016) - Gran Colombia Gold Corp. (
Second Quarter and First Half 2016 Highlights
Lombardo Paredes Arenas, Chief Executive Officer of Gran Colombia, commenting on the Company's results for the first half of 2016, said, "We are very pleased to see the improvement in our adjusted EBITDA in the first half of this year, made possible through our production growth at Segovia and further reduction in our costs. The increased level of operating cash flow we are generating is being dedicated toward improving our balance sheet through reductions in our payables and to buy back our senior debt through the recently announced NCIBs. We also feel confident enough at this point in the level of monthly production we are seeing at Segovia to raise our gold production guidance for the year to a total of 135,000 to 145,000 ounces."
Financial and Operating Summary
A summary of the financial and operating results for the second quarter and first half of 2016 and 2015 follows:
Second Quarter | First Half | |||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||
Operating data: | ||||||||||||||
Gold produced (ounces) | 38,229 | 28,495 | 69,718 | 52,468 | ||||||||||
Gold sold (ounces) | 38,902 | 26,523 | 68,588 | 51,855 | ||||||||||
Average realized gold price ($/oz sold) | $ | 1,216 | $ | 1,163 | $ | 1,185 | $ | 1,177 | ||||||
Total cash costs ($/oz sold) (1) | 680 | 779 | 682 | 801 | ||||||||||
All-in sustaining costs ($/oz sold) (1) | 811 | 904 | 802 | 921 | ||||||||||
Financial data ($000's, except per share amounts): | ||||||||||||||
Revenue | $ | 48,014 | $ | 31,273 | $ | 82,484 | $ | 61,931 | ||||||
Adjusted EBITDA (1) | 18,299 | 8,036 | 29,885 | 15,179 | ||||||||||
Net income (loss) attributable to shareholders | 65 | 3,041 | 10,891 | (274 | ) | |||||||||
Basic and diluted income (loss) per share | 0.00 | 0.13 | 0.09 | (0.01 | ) | |||||||||
Adjusted net income (loss) attributable to shareholders (1) | 3,857 | 1,663 | 4,108 | (153 | ) | |||||||||
Basic and diluted adjusted income (loss) per share (1) | 0.03 | 0.07 | 0.04 | (0.01 | ) | |||||||||
June 30, | December 31, | |||||||||||||
2016 | 2015 | |||||||||||||
Balance sheet ($000's): | ||||||||||||||
Cash and cash equivalents | $ | 2,978 | $ | 3,004 | ||||||||||
Cash in trust for Senior Debentures (2) | 2,299 | - | ||||||||||||
Senior debt (3) | 82,583 | 100,740 | ||||||||||||
Other debt, including current portion | 2,475 | 3,012 | ||||||||||||
(1) | Refer to "Additional Financial Measures" in the Company's MD&A. |
(2) | Represents amounts deposited into sinking funds for the 2018 and 2020 Debentures. |
(3) | Represents carrying amounts, which are at a discount to principal amounts, for the 2018 and 2020 Debentures at June 30, 2016 and for the Gold and Silver Notes at December 31, 2015. Refer to Company's Interim Financial Statements for additional details regarding the 2018 and 2020 Debentures. |
Segovia Operations
Second quarter 2016 gold production totalled 31,884 ounces, up 23% from the first quarter of 2016 and up 41% from the second quarter a year ago. Gran Colombia processed an average of 771 tonnes per day ("tpd") with head grades averaging 13.8 g/t at Segovia in the second quarter of 2016, an improvement from 730 tpd at an average head grade of 12.9 g/t in the first quarter of 2016 and 534 tpd at head grades averaging 15.5 g/t in the second quarter a year ago. Improved recovery of gold from the mill circuit related to the Company-operated areas was also a factor in the increased gold production in the second quarter of 2016. For the first half of 2016, gold production at the Segovia Operations totalled 57,883 ounces, up 41% from the first half of last year. With another 11,731 ounces produced in July, the Company now expects its gold production at Segovia to total from 111,000 to 119,000 ounces for the full year 2016, up from a total of 92,894 ounces produced in 2015.
Segovia's total cash costs, which decreased to $627 per ounce in the second quarter of 2016, were positively impacted by the increased gold production from the Company-operated mining areas which helped to lower fixed costs on a per ounce basis. For the first half of 2016, Segovia's total cash costs averaged $641 per ounce, down 16% from the first half of 2015.
Marmato Operations
At the Marmato Underground mine, tonnes processed increased by 20% in the second quarter of 2016, compared with the first quarter this year, to 987 tpd with head grades averaging 2.6 g/t. This resulted in gold production of 6,345 ounces in the second quarter of 2016, up 16% from the first quarter of 2016 and up 7% from the second quarter a year ago. For the first half of 2016, gold production at the Marmato Operations totalled 11,835 ounces, up 4% from the first half last year. With another 1,852 ounces produced in July, the Company expects to produce a total of 24,000 to 26,000 ounces at its Marmato Operations for the full year 2016.
Additional operating costs associated with repairs and maintenance activities, the adverse impact of a lower mill recovery rate on the Marmato Underground mine's gold production and an increase in production taxes as a result of the increase in spot gold prices were the primary contributors to the increase in Marmato's total cash costs to $933 per ounce in the second quarter of 2016. For the first half of 2016, Marmato's total cash costs averaged $900 per ounce, down 3% from the first half of 2015.
Outlook
With a total of 83,301 ounces of gold produced through the first seven months of 2016 and an expectation that the trend in monthly production from the Segovia Operations will continue for the balance of the year, the Company is increasing its annual gold production guidance for 2016 to a range of 135,000 to 145,000 ounces.
The results for total cash costs and AISC per ounce for the first half of 2016 were better than expected due to the improved production performance at the Segovia Operations. However, for the full year 2016, the Company is maintaining its guidance for total cash costs which are expected to average between $700 and $750 per ounce, influenced by the exchange rate of the Colombian peso relative to the U.S. dollar and by production volumes during the balance of the year. Gran Colombia also anticipates that its average AISC for the full year will be between $850 and $950 per ounce, reflecting an expected increase in the level of capital investment in its Segovia Operations in the second half of 2016. The Company commenced a 10,000 meters drilling program at Segovia in May 2016 that is expected to be completed by the end of the year. The Company is currently conducting a further review of mine design options to improve mine access, material handling and ventilation at the Providencia mine at Segovia and expects to make a final decision in the second half of 2016 regarding its path forward. The ultimate decision and timing to commence the capital program associated with this initiative will have an impact on whether spending reaches the top end of the guidance range for sustaining capital expenditures for the full year.
Webcast
As a reminder, the Company will host a conference call and webcast on Friday, August 12, 2016 at 9:30 a.m. Eastern Time to discuss the results.
Webcast and call-in details are as follows:
Live Event link: | http://edge.media-server.com/m/p/6swovr25 | |
Toronto & International: | 1 (514) 841-2157 | |
North America Toll Free: | 1 (866) 215-5508 | |
Colombia Toll Free: | 01 800 9 156 924 | |
Conference ID: | 42953910 | |
A replay of the webcast will be available at www.grancolombiagold.com from Friday, August 12, 2016 until Sunday, September 11, 2016.
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 in the midst of an expansion and modernization project 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 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, 2016, 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.
Contact Information:
For Further Information, Please Contact:
Mike Davies
Chief Financial Officer
(416) 360-4653
investorrelations@grancolombiagold.com