TORONTO,
Feb. 3, 2014 /PRNewswire/ - Gran
Colombia Gold Corp. (TSX: GCM) (OTC: TPRFF) announced today that it
has implemented actions to strengthen its management team, improve
its cost structure and has secured bridge financing in advance of
its prospectus financing (see the company's press release dated
November 19, 2013).
The Board of Directors has appointed Mr.
Lombardo Paredes Arenas as Chief
Executive Officer (CEO) of Gran Colombia Gold. Ms. Maria Consuelo Araujo will be appointed in a new
role, as President of the company and focus her efforts on
governmental relations and corporate responsibility.
Commenting on today's announcements,
Serafino Iacono, Executive
Co-Chairman of Gran Colombia Gold, stated, "We are excited to have
Mr. Paredes join our team as we prepare for the implementation of
our new, modern mining operation at Segovia and focus on improving
the efficiency of our existing operations." Looking forward to
2014, Mr. Iacono added, "We are currently completing our 2014
operating plan which is designed to deliver a cost structure that
positions the company to generate the cash flow needed to meet our
2014 financial obligations."
Mr. Paredes assumed the role of CEO effective
February 1, 2014 and brings to his
position over 20 years of corporate leadership and operations
management experience in the resource sector in Latin America. Before becoming an independent
consultant on energy and environment project development, Mr.
Paredes, within Petroleos de Venezuela (PDVSA), held several roles with
responsibility for regional planning of investments and social
development for Eastern Venezuela,
and was Managing Director and a Board Member of Maraven S.A. (an
affiliate of PDVSA), with responsibility for the construction and
commissioning of the Cardon Refinery Conversion Project in
Venezuela, a US$2.6 billion project, and was General Manager
of its Production Operations Division, with 5,000 employees and oil
production of 800 KBbls per day. Mr. Paredes holds a Bachelor
of Science in Mechanical Engineering and Master of Economic
Analysis and Financial Economics.
In January 2014,
Gran Colombia completed a restructuring of its operations at
Segovia to continue the expansion and modernization of mining
activities and improve security in the mining and processing
operations. Certain key functions will be directly employed by Gran
Colombia and a local contractor has been engaged to carry on the
mining activities in the company-operated areas at Segovia. This
new mine contractor will be remunerated for their services based on
tonnes mined, thereby lowering mining costs per tonne and turning
the former fixed operating cost structure into a variable cost more
closely aligned with production, revenues and cash flows.
As a result of this operating cost restructuring
and focusing the 2014 mine plan on higher grade areas at Segovia,
supported by the company's continuing investment in mine
development, the company expects that its all-in sustaining cost
("AISC") will decrease in 2014 to an annual average of about
$950 per ounce, down from our
preliminary annual average of about $1,300 per ounce in 2013. The AISC per ounce
estimate for 2014 is based on current gold price levels and will
increase or decrease to some extent as a result of the company's
natural hedge in its cost structure to gold price fluctuation
related to its artisanal mining contracts that remunerate the
cooperatives for their mining services under a formula tied to
recovered gold and the spot price of gold. The company will also
require approximately $200 per ounce
to service its debt and other financial obligations in 2014,
including its Gold and Silver-linked notes.
On November 19,
2013, Gran Colombia announced the filing of a preliminary
short form prospectus in all of the provinces of Canada, except Quebec, in connection with a "best efforts"
offering of a minimum of US$7 million
up to a maximum of US$15 million of
units of Gran Colombia at a price per unit to be determined in the
context of the market. The company also announced that certain
current shareholders and principals of the company have indicated
that they intend to purchase a minimum of US$5 million of units of the offering. In advance
of this proposed offering, Gran Colombia has received a
US$4 million, interest free bridge
loan from the aforementioned shareholders and insiders, which shall
be redeemed and accounted for as a subscription for shares in the
proposed offering. The proceeds of the bridge loan are being used
to finance the operational restructuring referred to above and for
working capital.
The aforementioned securities offering have not
and will not be registered under the United States Securities Act
of 1933, as amended (the "U.S. Securities Act"), or any U.S. State
securities laws and may not be offered or sold, directly or
indirectly, within the United
States or its territories or possessions or to or for the
account of any U.S. person (as defined in Regulation S under the
U.S. Securities Act) other than pursuant to an available exemption
from the registration requirements of the U.S. Securities Act. This
news release does not constitute an offer to sell or a solicitation
of an offer to buy any such securities within the United States, or its territories or
possessions, or to or for the account of any U.S. person.
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 26, 2013 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.