Mr. Serafino Iacono reports
GRAN COLOMBIA GOLD ADDS TO ITS MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES FOR ITS SEGOVIA OPERATIONS IN ITS DECEMBER 2018 UPDATE
Gran Colombia Gold Corp. has completed updated
mineral resource and mineral reserve estimates for its Segovia operations prepared in accordance with the Canadian Institute of Mining Metallurgy and Petroleum (CIM) definition standards incorporated by reference in National Instrument 43-101,
with an effective date of Dec. 31, 2018.
Serafino Iacono, executive co-chairman of Gran Colombia, commented: Our minable gold reserves increased 4 per cent to 688,000 ounces at Dec. 31, 2018, replacing what we produced last year.
We also added to our mineral resources, the largest increases coming from new discoveries at El Silencio and Providencia. The updated mineral resource and mineral reserve estimates for our Segovia operations reaffirm our confidence in the high-grade nature
of our gold deposits. Total measured and indicated resources increased to 3.5 million tonnes at a grade of 11.8 g/t totalling 1.3 million ounces of gold, up 7 per cent from last year. Total inferred resources increased to 3.6 million tonnes at a grade of 10.1 g/t totalling
1.2 million ounces of gold, up 4 per cent compared to last year."
Mineral resource estimate (MRE) effective Dec. 31, 2018
The associated table summarizes the MRE for the Segovia operations as of Dec. 31, 2018, and changes by category in tonnes, grade and ounces of gold compared with the total MRE as of
Dec. 31, 2017.
Project Deposit Type Measured Indicated
Tonnes Grade Au metal Tonnes Grade Au metal
(kt) (g/t) (koz) (kt) (g/t) (koz)
Segovia Providencia LTR 110 16.7 59 299 16.6 159
Pillars 108 23.5 81 107 15.8 54
Sandra K LTR 329 9.8 103
Pillars 105 11.5 39
El Silencio LTR 853 11.1 304
Pillars 1,444 10.3 480
Subtotal LTR 110 16.7 59 1,480 11.9 566
Pillars 108 23.5 81 1,655 10.8 573
Carla Subtotal LTR 154 9.7 48
2018 (1) 218 20.0 140 3,289 11.2 1,187
2017 (2) 213 21.3 146 3,189 10.7 1,100
previous 2% -6% -4% 3% 5% 8%
Project Deposit Type Measured and indicated Inferred
Tonnes Grade Au metal Tonnes Grade Au metal
(kt) (g/t) (koz) (kt) (g/t) (koz)
Segovia Providencia LTR 409 16.6 218 192 10.1 63
Pillars 215 19.7 136 380 19.9 244
Sandra K LTR 329 9.8 103 321 7.1 73
Pillars 105 11.5 39
El Silencio LTR 853 11.1 304 1,276 9.1 374
Pillars 1,444 10.3 480 442 12.3 174
Verticales LTR 771 7.1 176
Subtotal LTR 1,590 12.2 625 2,561 8.3 686
Pillars 1,763 11.5 654 823 15.8 418
Carla Subtotal LTR 154 9.7 48 178 9.3 53
2018 (1) 3,507 11.8 1,327 3,562 10.1 1,157
2017 (2) 3,402 11.4 1,245 3,420 10.1 1,107
previous 3% 4% 7% 4% - 4%
(1) The mineral resources are reported at an in situ cut-off grade of 3.0 grams
per tonne (g/t) gold (Au) over a 1.0-metre mining width, which has been derived
using a gold price of $1,400 (U.S.) per ounce and projected mining, processing
and mine site overhead costs, using actual mine data, which have been
benchmarked for underground mining and conventional gold mineralized material
processing. Each of the mining areas have been subdivided into pillar areas,
which represent the areas within the current mining development and long-term
resources (LTR), which lie along strike or downdip of the current mining
development. Mineral resources are reported inclusive of the mineral reserve.
Mineral resources are not mineral reserves and do not have demonstrated
economic viability. All figures are rounded to reflect the relative accuracy of
the estimate. All composites have been capped where appropriate.
(2) Derived from the National Instrument 43-101 technical report prefeasibility
study, Segovia project, Colombia, dated May 10, 2018, prepared by SRK Consulting
During 2018, Gran Colombia continued its infill underground drilling programs designed to confirm and increase the confidence in the grade distribution at its mines. The results of the
2018 drilling program were included in press releases issued by the company on June 18, 2018, Oct. 3, 2018, and Feb. 25, 2019, including the discovery of new structures at El Silencio and Sandra K, and two new zones at Providencia, all of which have the
potential to add mineral resources and mine life and are being followed up in the 2019 drilling program. The updated MRE for the Segovia operations incorporates assay results from an additional 286 diamond drill holes totalling 30,457 metres of sampling information
in the databases compared with the previous model, inclusive of the 2018 drilling program and the continuing validation exercises of historical information being completed by the Gran Colombia's geologists. All diamond core has been logged and sent for preparation
at the SGS laboratories in Medellin. In addition to the drilling, a total of 6,078 channel samples totalling approximately 6,837 metres in length were completed in 2018. The MRE was prepared using a block model constrained with 3-D wireframes of the principal veins,
which have been subdomained using high-grade mineralization wireframes to constrain the influence of higher-grade material. Assays are capped prior to compositing. Values were interpolated using ordinary kriging and inverse distance squared. All models have
been depleted using projections of the mining faces through the entire width of the veins. Classification has been applied based on a combination of data quality, confidence in the spatial location and confidence in the mining depletion shapes. Only material
reporting above a cut-off of 3.0 g/t over a minimum stope width of 1.0 metre has been included in the MRE. The MRE for Las Verticales and Carla have not been updated as no new information is currently available and the previous estimates for these projects remain
Ben Parsons, principal consultant (resource geology) with SRK, prepared the Segovia MRE according to CIM definition standards and will be supported by an NI 43-101 independent report, which
will be published and filed on the company's website and SEDAR profile within 45 days. Mr. Parsons is a qualified person as defined by NI 43-101. The NI 43-101 independent report will include detailed information on the key assumptions, parameters and methods
used to estimate the mineral resources.
Segovia life-of-mine (LOM) minable gold reserves of 688,000 contained ounces effective Dec. 31, 2018
Gran Colombia also announced today that SRK has completed preliminary results of an updated preliminary feasibility study (PFS) for the Segovia operations effective Dec. 31, 2018,
and is currently finalizing the updated technical report. The PFS includes a mineral reserve of 688,000 proven and probable ounces of gold based on 1.9 million tonnes of material at an average head grade of 11.0 g/t.
For this PFS, SRK included the geological and resource modelling of the various deposits and mining areas that comprise the operating mine site of the Segovia operations. The associated table shows a breakdown of the mineral reserve as of Dec. 31, 2018, by area and category compared with the total mineral reserves as of Dec. 31, 2017.
Area Category Tonnes (kt) Grade (g/t) Au metal (koz)
Providencia Proven 79 11.7 30
Providencia Probable 319 18.5 190
Sandra K Probable 171 9.8 54
El Silencio Probable 1,268 9.3 381
Carla Probable 104 10.1 34
Dec. 31, 2018 (1) Total 1,941 11.0 688
Dec. 31, 2017 (2) Total 1,660 12.4 660
versus previous 17% -11% 4%
(1) Ore reserves are reported using a gold cut-off grade ranging
from 3.25 to 4.31 g/t depending on mining area and mining method. The
cut-off grade calculations assume a gold price of $1,275 per ounce,
metallurgical recovery of 90.5 per cent, smelting and refining
charges of $6 per ounce, general and administrative expenses of $25
per tonne, processing cost of $24 per tonne, and projected LOM
mining costs ranging from $71 per tonne to 110 per tonne. The
reserves are valid as of Dec. 31, 2018. Mining dilution is applied
to a minimum mining height and estimated overbreak (values differ by
area/mining method) using a zero grade. Reserves are inclusive of
mineral resources. All figures are rounded to reflect the relative
accuracy of the estimates. Totals may not sum due to rounding.
Mineral reserves have been stated on the basis of a mine design,
mine plan and cash flow model. There are potential survey unknowns
in some of the mining areas and lower extractions have been used to
account for these unknowns. The mineral reserves were estimated by
Fernando Rodrigues, BS, mining, MBA, MMSAQP No. 01405, MAusIMM No.
304726, of SRK, a qualified person.
(2) Derived from the NI 43-101 technical report prefeasibility study,
Segovia project, Colombia, dated May 10, 2018, prepared by SRK.
A mining study and schedule was prepared by both SRK's and the company's technical professionals to create a life-of-mine production schedule, including both company-operated areas and contractor-operated
areas within the company's Providencia, El Silencio, Sandra K and Carla mines. The PFS production schedule includes only proven and probable reserves, and as such, the five-year projected mine life in the PFS is shorter than the company's current expectations
of at least eight years based on its mineral resources largely due to the exclusion of inferred resources which the company currently mines and intends to continue mining in the future. In addition, the material processed under operating contracts at the company's
Maria Dama plant from the small artisanal mines located in the company's mining title is not included in the LOM production schedule in the PFS as it falls outside the company's mines and is therefore not included in the company's MRE.
A summary of the key LOM operating and financial parameters of the current PFS dated as of Dec. 31, 2018, compared with the PFS prepared as of Dec. 31, 2017, is shown in the associated table.
Dec. 31, 2018 Dec. 31, 2017 (1)
Ore milled (tonnes) 1,941,000 1,660,000
Gold produced (oz) 623,000 610,000
Financial data (U.S. dollars)
Expected long-term gold price $1,275/oz $1,300/oz
LOM gold revenue $794-million $793-million
Total cash cost $695/oz $695/oz
LOM sustaining capex $132-million $140-million
AISC, excluding corporate G&A $907/oz $924/oz
free cash flow $148-million $148-million
free cash flow at 5% $136-million $129-million
(1) Derived from the NI 43-101 technical report prefeasibility
study, Segovia project, Colombia, dated May 10, 2018, prepared
AISC means all-in sustaining costs and NPV means net present
Mr. Rodrigues, who is the practice leader/principal consultant (mining engineer) with SRK, prepared the Segovia minable reserves according to CIM definition
standards and will be supported by a NI 43-101 independent report, which will be published and filed on the company's website and SEDAR profile within 45 days. Mr. Rodrigues is a qualified person as defined by NI 43-101. The NI 43-101 independent report will
include detailed information on the key assumptions, parameters and methods used to estimate the minable reserves.
About Gran Colombia Gold Corp.
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.
We seek Safe Harbor.
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