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Gran Colombia Gold Corp (4)
Symbol C : GCM
Shares Issued 48,217,805
Close 2019-03-11 C$ 3.68
Recent Sedar Documents

Gran Colombia has M&I resources of 1.32M oz Au

2019-03-11 18:12 ET - News Release

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
          Verticales     LTR                                                    
            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
Dec. 31,
2018 (1)                           218   20.0       140   3,289   11.2     1,187
Dec. 31, 
2017 (2)                           213   21.3       146   3,189   10.7     1,100
% change 
versus 
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
Dec. 31,
2018 (1)                         3,507   11.8     1,327   3,562   10.1     1,157
Dec. 31, 
2017 (2)                         3,402   11.4     1,245   3,420   10.1     1,107
% change 
versus 
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 
(U.S.) Inc.

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 valid.

Qualified person

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
% change
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)
Operating data
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
Undiscounted after-tax 
free cash flow                    $148-million      $148-million
NPV after-tax 
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 
by SRK.

AISC means all-in sustaining costs and NPV means net present 
value.

Qualified person

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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