Gran Colombia Gold Reports First Quarter 2019 Results; Record Quarterly Gold Production Leads to New Highs for Revenue and Adjusted EBITDA

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TORONTO, May 15, 2019 (GLOBE NEWSWIRE) -- Gran Colombia Gold Corp. (TSX: GCM; OTCQX: TPRFF) announced today the release of its unaudited interim condensed consolidated financial statements and accompanying management’s discussion and analysis (MD&A) for the three months ended March 31, 2019. All financial figures contained herein are expressed in U.S. dollars (“USD”) unless otherwise noted.

Serafino Iacono, Executive Chairman of Gran Colombia, commenting on the Company’s latest results, said, “Our previously reported record quarterly production has translated into some solid first quarter financial results which have started us off well in 2019. New quarterly highs were achieved in revenue and adjusted EBITDA while Segovia’s quarterly cash costs reached a historical low of $570 per ounce sold. Our cash position at the end of March 2019 was $40.2 million, up $4.6 million since the end of 2018, and we continued to pay down our Gold Notes which currently have $78.5 million aggregate principal amount outstanding. Our 2019 drilling campaign at Segovia is moving along well and will be given the intended boost in the second half of this year with the net proceeds of the private placement of convertible debentures completed in April. Our technical studies at the Marmato Project are gaining momentum and we remain on track to complete a preliminary economic assessment later this year. With another 20,472 ounces of gold produced in April, our second quarter is picking up right where we left off in March.”

At the Segovia Operations, gold production in the first quarter of 2019 reached a new quarterly record of 54,386 ounces, up 17% over the first quarter of 2018. The Company processed an average of 1,112 tonnes per day at its Segovia Operations in the first quarter of 2019, up 19% from the first quarter last year, with an average head grade of 18.8 g/t, up from 16.1 g/t in the first quarter of 2018. The key driver was a 36% increase in high-grade material from the company-operated areas at the Providencia mine which contributed 21% of the total tonnes processed in the first quarter of 2019 at an average head grade of 34.8 g/t, up from 25.4 g/t in the first quarter last year. The Company’s mine development and mechanization in the Company-operated areas of the El Silencio mine have also helped to increase both the tonnes mined and the average head grades from this mine in the first quarter of 2019 compared with the first quarter last year. With another 18,371 ounces of gold produced in April, this brings Segovia’s trailing 12-months’ total gold production at the end of April 2019 to 205,004 ounces, up 6% over 2018’s annual production.

Segovia’s total cash costs decreased to a historical low of $570 per ounce in the first quarter of 2019, down from $616 per ounce in the first quarter last year, benefitting from the increased volume of gold production this year that helped to further reduce its fixed production costs on a per ounce basis. Segovia’s total cash costs per ounce in the first quarter of 2019 also benefitted from the favourable impact of mining higher-grade material in the Company-operated area of the Providencia mine where the incremental production costs associated with the additional gold production attributable to the better grades were much lower.

The Company’s AISC of $832 per ounce for the first quarter of 2019 included $7.2 million of sustaining capital expenditures attributable to the Segovia Operations, the major components of which included (i) $2.1 million for drilling under the Company’s ongoing exploration campaign, (ii) $2.4 million for ongoing mine development, (iii) $1.3 million for the mines including continuation of the ventilation improvements at the El Silencio mine, further infrastructure upgrades at the Providencia mine, and underground equipment and infrastructure improvements at the Sandra K mine, (iv) $0.7 million associated with the expansion of the Maria Dama plant to 1,500 tpd which should be completed in the second quarter this year, together with costs associated with the new filter press, (v) $0.6 million for costs related to the ongoing construction activities at the new El Chocho tailings storage facility, and (vi) $0.1 million associated with the Segovia site facilities.

At the Marmato Operations, gold production in the first quarter of 2019 reflected the impact of some recent development work which increased tonnes processed in March 2019 to 1,090 tpd at an average head grade of 2.5 g/t and raised the quarterly processing rate to an average of 1,015 tpd. This brings Marmato’s total production for the first quarter of 2019 to 6,215 ounces, on par with the first quarter of 2018. April’s gold production amounted to 2,101 ounces, bringing Marmato’s trailing 12-months’ total gold production at the end of April 2019 to 25,279 ounces, on par with 2018’s annual production.

Total cash costs per ounce averaged $1,128 per ounce in the first quarter of 2019 compared with $1,141 per ounce in the first quarter last year. The Company is continuing its efforts to reduce the mine’s total cash cost to below an average for the full year below $1,100 per ounce.

The Company’s AISC of $832 per ounce for the first quarter of 2019 included $0.3 million primarily related to mine infrastructure improvements. The Company’s All-in costs of $843 per ounce in the first quarter of 2019 included $0.6 million, equivalent to $11 per ounce sold, of non-sustaining capital expenditures at the Marmato Project in connection with the completion of the 2018 drilling campaign in mid-March and subsequent commencement of the 2019 drilling campaign. The Company remains on track to complete a preliminary economic assessment technical study later this year

Through the first four months of 2019, the Company has produced a total of 81,073 ounces of gold and its trailing 12-months’ total gold production at the end of April 2019 stands at 230,283 ounces, above the top end of its guidance range for 2019 of 210,000 to 225,000 ounces of gold for the full year. The Company will continue to monitor its operating performance over the next several months to assess whether a change in 2019’s production guidance is warranted.

The Company has already commenced a 20,000 meters drilling campaign in 2019 at its Segovia Operations focused on step-out drilling at Providencia and Sandra K, deep zone drilling to extend El Silencio another 200 meters below its currently delineated mineral resource, and brownfield drilling on the Cogote vein system. Using the net proceeds from the private placement, the Company will accelerate its ongoing exploration programs at Segovia, including technical and other studies to be carried out over the next approximately six months to identify and prioritize drilling targets followed by a drilling campaign, over and above what is already planned by the Company in 2019 and 2020. The objective of the drilling program is to increase mineral reserves for future production growth and to extend the mine life of the Segovia Operations.

The Company’s total cash cost in the first quarter of 2019 of $621 per ounce sold was better than expected, benefitting from the record gold production at the Segovia Operations. For the full year, the Company is maintaining its initial guidance that total cash costs will average less than $720 per ounce sold for the full year. The Company also expects that with its planned capital investment program in 2019, including the ongoing exploration activities at Segovia, its AISC for the full year will remain below $950 per ounce. Similar to production, the Company will monitor cost performance over the next several months to assess whether a change in 2019’s guidance is warranted.

As a reminder, Gran Colombia will host a conference call and webcast on Thursday, May 16, 2019 at 9:30 a.m. Eastern Time to discuss the results. Webcast and call-in details are as follows:

A replay of the webcast will be available at from Thursday, May 16, 2019 until Friday, June 14, 2019.

Gran Colombia is a Canadian-based mid-tier gold producer with its primary focus in Colombia where it is currently the largest underground gold and silver producer with several mines in operation at its Segovia and Marmato Operations. Gran Colombia is continuing to focus on exploration, expansion and modernization activities at its high-grade Segovia Operations.

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Globe Newswire: 22:00 GMT Wednesday 15th May 2019

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