Ms. Maria Araujo reports
GRAN COLOMBIA ANNOUNCES THIRD QUARTER 2011 RESULTS
Gran Colombia Gold Corp. has filed its interim condensed consolidated
financial statements for the three and nine months ended Sept. 30,
2011, together with its management's discussion and analysis (MD&A)
for the corresponding period. These documents will be posted on the
company's website and under the company's SEDAR profile.
Maria Consuelo Araujo, chief executive officer of the company,
commented: "We are pleased to see that our focus on increasing
production and reducing costs in our Segovia operations is beginning to
materialize in our operating and financial results. As we continue to
implement the necessary mine and mill expansion initiatives at Segovia
to reach our production target for 2012, we are also proceeding as
planned with the development activities at the Marmato project,
including completion of the studies and analysis required to commence
activities associated with the move of the town of Marmato and to
implement Colombia-based social programs related to the Marmato
project. We will continue to provide timely updates on these
initiatives as information becomes available."
FINANCIAL AND OPERATING SUMMARY
Third quarter Nine months
2011 2010 2011 2010
Gold produced (ounces) 21,990 1,987 54,764 1,987
Gold sold (ounces) 22,317 1,544 54,624 1,544
Average realized gold price ($/oz sold) $1,684 $1,255 $1,547 $1,255
Total cash costs ($/oz sold) 1,368 1,652 1,352 1,652
Total production cost ($/oz sold) 1,536 1,945 1,523 1,945
Total revenues (thousands) $38,779 $2,186 $87,288 $2,186
Gross margin (loss) (thousands) 3,253 (2,028) 1,846 (2,028)
Net (loss) attributable to shareholders (thousands) (3,881) (33,368) (31,622) (34,195)
Basic and diluted (loss) per share (0.01) (0.27) (0.11) (0.68)
Cash and cash equivalents (thousands) 58,608 43,308 58,608 43,308
Total debt, including current portion (thousands) 78,557 500 78,557 500
Third quarter highlights
Gran Colombia is on track to produce 90,000 ounces of gold in 2011. Total gold production for the third quarter
amounted to 21,990 ounces, bringing total gold production for the first
nine months of 2011 to 62,785 ounces. A further 9,445 ounces of gold were produced in October.
Total revenues increased to $38.8-million in the third quarter on the
strength of 22,317 ounces of gold sold at an average realized price of
$1,684 per ounce. For the first nine months of 2011, revenues totalled
The company took steps in September to significantly reduce costs at its
Segovia operations leading to a $415-per-ounce improvement in its cash
cost in October to $1,118 per ounce of gold sold.
Gross margin from the company's mining operations improved by $4.5-million to $3.3-million in the third quarter. Stronger realized gold
prices and increased production in the third quarter combined with the
$2.0-million of cost savings in the Segovia operations in the month of
September positively impacted the profit contribution and cash flows
from the company's mining operations.
In early September, Gran Colombia announced a 51-per-cent increase in measured
and indicated gold resources to 10.0 million ounces at its Marmato
project and an additional 2.4 million ounces of gold in the inferred
category at a cut-off grade of 0.3 gram per tonne (g/t). In addition, there are an
estimated 64 million ounces of silver in the measured and indicated
categories and a further 11 million ounces of silver in the inferred
category. The company filed a National Instrument 43-101 mineral
resource estimate on Oct. 19, 2011, for its Marmato project.
Gran Colombia's cash position stood at $58.6-million at Sept. 30,
2011. The company completed an $80-million senior unsecured
silver-linked notes offering in August,
2011. The net proceeds of the offering will be used by the company for
the development of the Marmato project, Colombia-based social programs
related to the Marmato project, the relocation of the town of Marmato
and for general corporate purposes including improvements at its
operating properties. Pursuant to a normal course issuer bid which
commenced on Aug. 29, 2011, the company used proceeds from its third
quarter silver sales to purchase for cancellation a total of 868 notes
on the open market in September. There are currently 79,132 notes
issued and outstanding.
Gran Colombia commenced a normal course issuer bid on Sept. 27, 2011, in respect of its common shares. To date, a total of
7,464,500 common shares have been purchased for cancellation at an
average price of 65 cents per common share. There are currently
382,222,257 common shares issued and outstanding.
More details on the company's operational and financial results can be
found in the MD&A.
Management will hold a conference call on Tuesday, Nov. 15, 2011,
beginning at 11 a.m. Eastern Standard Time to discuss the third quarter 2011
results. Analysts and investors are invited to participate as follows:
Toronto and international: 647-427-7450
North America (toll-free): 1-888-231-8191
Colombia (toll-free): 01-800-518-0661
Conference ID: 26753968
A playback of this conference call will be available by dialling
416-849-0833 or 855-859-2056 with the above conference ID number
until Nov. 29, 2011.
We seek Safe Harbor.
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