TORONTO, ON--(Marketwired - March 30, 2017) - Gran Colombia Gold Corp. (TSX: GCM) 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, 2016. All financial figures contained herein are expressed in U.S. dollars unless otherwise noted.
Lombardo Paredes Arenas, Chief Executive Officer of Gran Colombia, commenting on the Company's results for 2016, said, "We are pleased with the progress we have made in 2016 on a number of our strategic plan initiatives. We improved our balance sheet through the completion of the debt restructuring and subsequent debt conversions and repurchases. We also used the increased level of operating cash flow we are generating to improve our balance sheet through reductions in our working capital deficit, bringing the accounts of the local suppliers in the communities where we operate back to normal trade terms and eliminating amounts in arrears for equity and wealth taxes in Colombia. We reported our best year of gold production since the Company was formed, reaching almost 150,000 ounces, and we continued to control our costs with our AISC averaging $850 per ounce. We recently announced some encouraging drilling results at both properties and expect to have new mineral resource estimates available for Segovia and Marmato Underground in the second quarter this year. As we look ahead to 2017, we see another year of steady performance with gold production expected to be between 150,000 and 160,000 ounces and our AISC average for the year will remain below $900 per ounce. We expect to generate excess cash flow in 2017 equal to about 10% of the principal amount of our Senior Debentures and recently, we announced two proposals that we believe will improve our capital structure. We take this opportunity to thank our various stakeholders for their support through the past year."
Fourth Quarter and Full Year 2016 Highlights
Financial and Operating Summary
A summary of the financial and operating results for the fourth quarter and full year of 2016 and 2015 follows:
Fourth Quarter | Year | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Operating data: | ||||||||||||||||
Gold produced (ounces) | 40,879 | 30,050 | 149,708 | 116,857 | ||||||||||||
Gold sold (ounces) | 41,357 | 31,090 | 148,962 | 118,446 | ||||||||||||
Average realized gold price ($/oz sold) | $ | 1,201 | $ | 1,074 | $ | 1,218 | $ | 1,124 | ||||||||
Total cash costs ($/oz sold) (1) | 725 | 705 | 706 | 729 | ||||||||||||
All-in sustaining costs ($/oz sold) (1) | 899 | 852 | 850 | 863 | ||||||||||||
Financial data ($000's, except per share amounts): | ||||||||||||||||
Revenue | $ | 50,366 | $ | 33,751 | $ | 184,074 | $ | 134,949 | ||||||||
Adjusted EBITDA (1) | 16,447 | 9,984 | 66,044 | 38,423 | ||||||||||||
Impairment charges, net of tax | 11,395 | 24,648 | 11,395 | 24,648 | ||||||||||||
Net (loss) income attributable to shareholders | (15,254 | ) | (19,425 | ) | 3,709 | (13,020 | ) | |||||||||
Basic and diluted (loss) income per share | (0.05 | ) | (0.82 | ) | 0.02 | (0.55 | ) | |||||||||
Adjusted net (loss) income attributable to shareholders (1) | 3,430 | (2,954 | ) | 15,641 | (1,114 | ) | ||||||||||
Basic and diluted adjusted (loss) income per share (1) | 0.01 | (0.12 | ) | 0.08 | (0.05 | ) |
(1) | Refer to "Additional Financial Measures" in the Company's MD&A. |
December 31, | December 31, | ||||||
2016 | 2015 | ||||||
Balance sheet ($000's): | |||||||
Cash and cash equivalents | $ | 2,783 | $ | 3,004 | |||
Cash in trust for Senior Debentures (2) | 537 | - | |||||
Senior debt (3) | 84,602 | 100,740 | |||||
Other debt, including current portion | 1,652 | 3,012 |
(2) | Represents amounts deposited into sinking funds for the 2018 and 2020 Debentures, net of cash used for the NCIBs. | |
(3) | Represents carrying amounts, which are at a discount to principal amounts, for the 2018 and 2020 Debentures at December 31, 2016 and for the Gold and Silver Notes at December 31, 2015. Refer to Company's audited consolidated financial statements for additional details regarding the Senior Debentures. |
Segovia Operations
At the Segovia Operations, gold production in the fourth quarter of 2016 totalled 34,826 ounces, up 46% from the fourth quarter of 2015 which had been adversely impacted by external security challenges. The Company processed an average of 822 tonnes per day ("tpd") with head grades averaging 13.87 g/t at Segovia in the fourth quarter of 2016, an improvement from 678 tpd at an average head grade of 11.96 g/t in the fourth quarter of 2015. Segovia's annual gold production for 2016 reached a new record since being acquired by the Company in 2010, totaling 126,261 ounces, up 36% over 2015 and ahead of the Company's original guidance for 2016 of 96,000 to 110,000 ounces. Segovia's annual gold production benefitted in 2016 from development and modernization initiatives, focused primarily at the Providencia and El Silencio mines that contributed to a 39% increase in tonnes processed and 90% increase in ounces recovered from the Company-operated areas. Annual gold production from the contract mining cooperatives reflected a 31% increase in tonnes processed in 2016 and a 25% increase in ounces recovered. In 2017, the Company expects to produce a total of 126,000 to 134,000 ounces of gold from its Segovia Operations.
Segovia's total cash costs of $664 per ounce in the fourth quarter of 2016 brought its total cash costs for the full year 2016 to an average of $655 per ounce, down 6% from 2015. As Segovia represented 84% of the Company's total gold sales in 2016, up from 79% in 2015, it was a key driver behind the reduction in the Company's total cash costs to $706 per ounce in 2016 from $729 per ounce in 2015.
Marmato Operations
At the Marmato Operations, tonnes processed averaged 957 tpd in the fourth quarter of 2016, up 11% compared with the fourth quarter of 2015. This helped to partially mitigate the impact of lower head grades, which averaged 2.55 g/t in the fourth quarter of 2016, and lower mill recovery on gold production which amounted to 6,053 ounces in the fourth quarter of 2016, down 2% from the fourth quarter of 2015. Annual gold production at the Marmato Operations in 2016 totalled 23,447 ounces, down 2% from 2015 and slightly below the Company's guidance range for 2016 of 24,000 to 26,000 ounces. For 2017, the Company expects that recent improvements in mill recovery will result in annual gold production of between 24,000 and 26,000 ounces.
Total cash costs at the Marmato Operations in the fourth quarter of 2016 were $1,023 per ounce, bringing its full year 2016 total cash costs to an average of $981 per ounce, up 15% from 2015 as a result of the adverse impact of lower head grades and mill recovery on gold production.
Outlook
The Company started off 2017 with a total of 24,585 ounces of gold production in the first two months and expects to produce a total of 150,000 to 160,000 ounces of gold for the full year compared with the 149,708 ounces produced in 2016.
The Company's total cash cost and AISC averaged $706 and $850 per ounce sold, respectively, in 2016. In 2017, the Company expects that its total cash cost will remain below $720 per ounce sold. The Company also expects that with an increased level of exploration spending at Segovia and the continuation of capital investment at its Segovia Operations, its AISC for the full year will remain below $900 per ounce.
In 2017, provided gold prices remain at least at the current levels, the Company intends to generate excess cash flow equivalent to approximately 10% of the aggregate principal amount of its Senior Debentures currently issued and outstanding for deposit into the sinking funds in accordance with their respective indentures. Sinking fund balances may be used to fund open market repurchases of debentures for cancellation, redemptions at par or repayment at maturity.
Webcast
As a reminder, the Company will host a conference call and webcast on Friday, March 31, 2017 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/c6f8wgvn
Toronto & International: 1 (514) 841-2157
North America Toll Free: 1 (866) 215-5508
Colombia Toll Free: 01 800 9 156 924
Conference ID: 44631288
A replay of the webcast will be available at www.grancolombiagold.com from Friday, March 31, 2017 until Monday, May 1, 2017.
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 continuing its 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, 2017, 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, Please Contact:
Mike Davies
Chief Financial Officer
(416) 360-4653
[email protected]