TORONTO, Nov. 13, 2014 /PRNewswire/ - Gran Colombia Gold
Corp. (TSX: GCM, OTC: TPRFF) announced today the release of its
unaudited condensed consolidated financial statements and
accompanying management's discussion and analysis (MD&A) for
the three and nine months ended September
30, 2014. All financial figures contained herein are
expressed in U.S. dollars unless otherwise noted.
Third Quarter 2014 Highlights
- The Company now expects that 2014's total annual gold
production will be approximately 100,000 ounces. Total gold
production in the third quarter of 2014 amounted to 24,666 ounces,
below previous expectations as challenges at the Segovia Operations
brought on by limitations in the historical mine infrastructure
adversely impacted Segovia's gold production in the third quarter
while it was continuing to make progress in its mine development
program. While the Company has a plan to address these limitations,
mainly related to material handling systems and equipment
performance, it is now expected that the ramp-up in Segovia's gold
production will be more gradual, reaching the 10,000 ounces per
month threshold by mid-2015. Some improvements have already begun
to take effect as the Company produced a new monthly best total of
11,127 ounces from its Segovia and Marmato Operations in the month
of October 2014.
- Revenue of $30.9
million in the third quarter of 2014 was approximately 23%
below the third quarter a year ago, attributable to the 20% lower
volume in gold sales. However, a $30
per ounce improvement in cash margin per ounce in the third quarter
of 2014 over the same period last year, primarily as a result of
the Company's cost savings initiatives, mitigated the cash flow
impact of this reduction in quarterly revenue.
- The Company's focus on reducing its costs since early 2013 has
resulted in a decrease in total cash costs to
$1,054 per ounce in the third quarter
of 2014. All-in sustaining costs
("AISC") continued to show improvement compared to
last year, decreasing to $1,216 per
ounce (see the Company's MD&A for the computation of these
non-IFRS measures) in the third quarter of 2014. Third quarter 2014
AISC on a per ounce basis was higher than previously expected due
to the adverse impact on fixed costs per ounce of the lower gold
production and the higher sustaining capital expenditures at
Segovia this quarter. With spot gold prices currently in the
$1,150 to $1,170 per ounce range, the
Company expects that its fourth quarter 2014 AISC will be
approximately $1,025 per ounce,
benefitting from the natural hedge to spot gold price changes
within its cost structure, increased production at Segovia in the
fourth quarter and recent weakening of the Colombian peso ("COP")
to the current level of about COP
2,100 per USD 1.00.
- The Company continued to control its general and
administrative ("G&A") expenses, which
amounted to $2.3 million in the third
quarter of 2014, bringing the year-to-date total to $6.4 million, equivalent to approximately
$90 per ounce sold (excluding
depreciation), and on track to meet the Company's guidance of
approximately $8 million for the full
year.
- Non-operating items, such as foreign exchange gains and finance
costs, were the primary contributor to the decrease in the
Company's adjusted net loss (see the Company's
MD&A for a reconciliation) to $3.0
million, or $0.13 per share,
in the third quarter of 2014 compared with an adjusted net loss of
$6.8 million, or $0.44 per share, in the third quarter last year.
Cost reductions were successful in mitigating the impact on
earnings of the lower revenue compared with the prior year
period.
Lombardo Paredes
Arenas, Chief Executive Officer of Gran Colombia, commenting
on the Company's results for the third quarter of 2014, said,
"Although we are continuing to make progress in the improvements in
the mines at Segovia, we are finding that it is going to take more
time than previously expected to complete the mechanization and
realize the full benefits of our mine development program. As such,
our third quarter production at Segovia did not meet our
expectations. In light of the impact on our operating cash flow of
the lowered gold production forecast for the balance of this year
and next year, together with the current gold price environment, we
have engaged advisors to assist us in the evaluation of options to
address our liquidity given the debt service requirements of our
senior debt and funding necessary to complete the Pampa Verde
project through the end of 2015."
Financial and Operating Summary
A summary of the financial and operating results
for the third quarter and nine months of 2014 and 2013 is as
follows:
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Third Quarter |
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Nine Months |
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2014 |
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2013 |
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2014 |
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2013 |
Operating data: |
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Gold produced (ounces) |
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24,666 |
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29,186 |
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69,579 |
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80,687 |
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Gold sold (ounces) |
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24,203 |
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30,125 |
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69,341 |
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80,833 |
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Average realized gold price ($/oz
sold) |
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$ |
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1,256 |
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$ |
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1,299 |
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$ |
1,265 |
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$ |
1,448 |
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Total cash costs ($/oz sold) (1) |
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1,054 |
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1,127 |
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1,072 |
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1,171 |
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All-in sustaining costs ($/oz sold) (1) |
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1,216 |
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1,239 |
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1,206 |
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1,346 |
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Financial data
($000's, except per share amounts): |
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Revenue |
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$ |
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30,904 |
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$ |
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40,076 |
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$ |
89,499 |
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$ |
120,071 |
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Net loss attributable to shareholders |
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12,372 |
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(53,283) |
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(14,920) |
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(99,871) |
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Basic and diluted loss per share |
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0.52 |
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(3.49) |
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(0.70) |
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(6.54) |
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Adjusted net loss (1) |
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(2,999) |
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(6,793) |
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(13,363) |
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(13,245) |
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Basic and diluted adjusted loss per share (1) |
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(0.13) |
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(0.44) |
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(0.63) |
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(0.87) |
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September 30,
2014 |
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December 31,
2013 |
Balance sheet ($000's): |
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Cash and cash equivalents |
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$ |
514 |
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$ |
1,609 |
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Cash in trust, current and non-current |
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2,016 |
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31,774 |
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Total debt, including current portion |
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158,819 |
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172,515 |
(1) |
Refer to Additional Financial Measures in the Company's
MD&A. |
Segovia Operations
The Segovia Operations produced 18,479 ounces of
gold in the third quarter bringing total gold production for the
first nine months of 2014 to 52,079 ounces. The Company is
continuing its program to open access to other levels and to
develop additional stopes in the mines, with focus on the
Providencia, Sandra K and El Silencio mines at the present time.
Construction of internal ramps within the mines is also underway to
improve efficiency through mechanization of material handling,
introducing scoops and jumbos into the mining process. However, the
pace of development is being challenged by historical limitations
in the mines' infrastructure which create bottlenecks in material
handling while both production and development activities are being
undertaken simultaneously. Hoisting equipment and other material
handling systems within the mines are still generally in older
condition making them susceptible to breakdowns that resulted in
some downtime in mining operations in the third quarter of 2014
while repairs were completed. The Company spent approximately
$0.9 million in the third quarter on
sustaining capital expenditures at the Segovia Operations, an
increase in the quarterly run rate over the previous couple of
quarters, of which approximately $0.6
million related to machinery and equipment, mainly to
address issues within the mining operations. Consequently, the
expected growth in mining tonnages and gold production from the
Company-operated mines is taking longer to realize. Through
mid-2015, the Company's current mine plan expects a more gradual
increase in total monthly gold production to reach the 10,000
ounces per month threshold as development makes further headway,
the introduction of mechanization into the mining process
continues, and training of the Company's mining personnel in the
new mechanized mining practices is completed. Repair and
maintenance programs, including the addition of more experienced
management personnel, are also being upgraded to reduce the impact
of breakdowns on mining operations. In October 2014, the Segovia Operations produced
8,767 ounces of gold, a new monthly best for the mines since their
acquisition by the Company in 2010. Total annual gold production
from the Segovia Operations is now expected to be close to 77,000
ounces in 2014, increasing to approximately 115,000 ounces in
2015.
Marmato Operations
At Marmato Underground, an increase in tonnes
milled in the third quarter of 2014 resulted in an increase in
quarterly gold production to 6,187 ounces, bringing the total gold
production for the first nine months of 2014 to 17,500 ounces. In
October 2014, the mine produced 2,360
ounces of gold and total annual gold production for 2014 is now
expected to be close to 23,000 ounces.
Webcast
As a reminder, the Company will host a
conference call and webcast on Friday,
November 14, 2014 at 9:30 a.m.
Eastern Time to discuss the results.
Webcast and call-in details are as follows:
Live Event link: |
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http://www.media-server.com/m/p/9xnzmkj5 |
Toronto & International: |
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1 (514) 841-2157 |
North America Toll Free: |
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1 (866) 215-5508 |
Colombia Toll Free: |
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01 800 9 156 924 |
Conference ID: |
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38449668 |
A replay of the webcast will be available at
www.grancolombiagold.com from Friday,
November 14, 2014 until Sunday,
December 14, 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.