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Gran Colombia Gold Corp (4)
Symbol GCM
Shares Issued 61,143,744
Close 2021-05-13 C$ 5.03
Recent Sedar Documents

Gran Colombia earns $118.3-million (U.S.) in Q1

2021-05-13 19:05 ET - News Release

Mr. Mike Davies reports

GRAN COLOMBIA ANNOUNCES FIRST QUARTER 2021 RESULTS; FILES NATIONAL INSTRUMENT 43-101 TECHNICAL REPORT FOR ITS SEGOVIA OPERATIONS

Gran Colombia Gold Corp. has released its unaudited interim condensed consolidated financial statements and accompanying management's discussion and analysis for the three months ended March 31, 2021. All financial figures contained herein are expressed in U.S. dollars unless otherwise noted.

First quarter 2021 highlights:

  • In February, 2021, Gran Colombia brought its spinout of the Marmato mining assets to a conclusion, one in which the company has a continuing equity ownership of 44.3 per cent in the new, fully financed Aris Gold Corp. The company also added a 27.3-per-cent equity interest in Denarius Silver Corp. to its portfolio in the first quarter of 2021, giving it exposure to the Lomero-Poyatos polymetallic deposit located in Spain, in close proximity to the Matsa joint venture project, and to the Guia Antigua and Zancudo projects in Colombia. Gran Colombia has also announced a takeover bid for all the shares of Gold X Mining Corp. its does not already own. Subject to shareholder and regulatory approval, the companies are working toward closing the transaction in early June, 2021.
  • Gran Colombia's gold production totalled 49,058 ounces at its Segovia operations in the first quarter of 2021 compared with 50,346 ounces in the first quarter of 2020. In April, 2021, Segovia's gold production was 17,473 ounces bringing the company's trailing-12-month total gold production at the end of April, 2021, to 201,140 ounces, up 2 per cent over 2020. The company remains on track with its annual production guidance for 2021 of 200,000 to 220,000 ounces of gold.
  • The company's continuing drilling program at Segovia continues to provide encouraging results, reaffirming confidence in the high-grade nature of the Segovia gold deposits. In the first quarter of 2021, the company completed approximately 9,000 metres of its planned 40,000-metre program focused on stepout and infill drilling in proximity to the company's four mining operations. In addition, the company completed approximately 2,300 metres of drilling at the Vera and Marmajito veins as part of its planned 20,000-metre program dedicated to exploration on the high-priority brownfield targets in the Segovia mining title. The company currently has eight drill rigs operating at Segovia and expects to add two more drill rigs in the second half of the year. Results from the drill program in the first quarter of 2021 are expected to be announced in early June.
  • Consolidated revenue amounted to $101.9-million in the first quarter of 2021 compared with $101.0-million in the first quarter of 2020, reflecting an increase in the company's realized gold price (1) to an average of $1,812 per ounce sold from $1,570 in the first quarter last year, offset by lower gold sales volume this year, which included only one month of Marmato's operating results prior to the loss of control of Aris in early February, 2021.
  • At the Segovia operations, total cash costs (1) averaged $825 per ounce in the first quarter of 2021, a slight improvement from $830 per ounce in the fourth quarter of 2020 and up from $604 per ounce in the first quarter of 2020. The year-over-year increase in Segovia's total cash cost per ounce reflects: (i) an increase in contractor and artisanal mining payment rates (which had not changed since 2017) implemented in the third quarter of 2020 in response to the current gold market conditions; (ii) higher spot gold prices, which increased production taxes on a per-ounce basis; and (iii) additional costs to maintain the necessary COVID-19 protocols required to protect the health and safety of Segovia's workers and the local communities. Total cash costs, including Marmato, averaged $862 per ounce in the first quarter of 2021 compared with $667 per ounce in the first quarter of 2020.
  • All-in sustaining costs (AISC) (1) for the Segovia operations were $1,120 per ounce in the first quarter of 2021, down from $1,266 per ounce in the fourth quarter of 2020 and up from $836 per ounce in the first quarter of 2020. The year-over-year increase in Segovia's AISC reflects: (i) the increased total cash costs; (ii) an increase in mine development and other sustaining capital expenditures at the company's mines; and (iii) the impact of lower gold sales volume at Segovia of AISC on a per-ounce basis. Including Marmato, consolidated AISC in the first quarter of 2021 was $1,164 per ounce compared with $890 per ounce in the first quarter last year.
  • Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (1) amounted to $46.3-million for the first quarter of 2021, compared with $50.4-million in the first quarter last year. The company's trailing-12-month adjusted EBITDA at the end of March, 2021, stood at $183.7-million compared with $187.8-million in 2020.
  • Net cash provided by operating activities in the first quarter of 2021 was $13.6-million compared with $31.8-million in the first quarter last year and reflected: (i) a $7.2-million increase in income tax payments in Colombia; (ii) $8.8-million of change of control payments in the Aris transaction; and (iii) continued delay in receiving value-added-tax refunds in Colombia due to the impact of COVID-19 on the government's processing of claims. The company has since received $11.2-million of its past due VAT refunds in April and May, 2021.
  • Free cash flow (1) in the first quarter of 2021 amounted to $2.5-million compared with $17.8-million in the first quarter of 2020. Adjusted to exclude Aris, the company's free cash flow in the first quarter of 2021 was $14.8-million compared with $22.3-million in the first quarter last year, reflecting the increased level of income taxes paid in the first quarter of 2021 compared with the same period last year.
  • The company's balance sheet remained solid with total cash of $73.6-million at the end of the first quarter of 2021. After the quarterly amortizing payments in 2021 and the early optional redemption completed on May 10, 2021, the aggregate principal amount of gold notes currently outstanding is $19.75-million. The company also completed a partial redemption in April, 2021, of 10 per cent of its convertible debentures bringing the amount outstanding down to $18-million (Canadian).
  • The company returned a total of $5.4-million to shareholders in the first quarter of 2021 with the repurchase of 702,000 shares at a cost of $3.2-million and payment of its monthly dividends totalling $2.2-million.
  • The company reported net income of $118.3-million ($2.02 per share) in the first quarter of 2021 compared with net income of $24.3-million (42 cents per share) in the first quarter of 2020. Income from operations in the first quarter of 2021 amounted to $39.1-million compared with $40.9-million in the first quarter of 2020 despite including two fewer months of operating results from Marmato due to the loss of control of Aris in early February, 2021. In the first quarter of 2021, the increase in realized gold prices, together with lower general and administrative and share-based compensation expense, more than mitigated the impact of higher cost of sales at Segovia on income from operations. Net income in the first quarter of 2021 benefited from the $56.9-million gain on loss of control of Aris, the $42.8-million gain on financial instruments and the $8.9-million gain on sale of the Zancudo project, partially offset by the Aris transaction costs of $9.8-million.
  • Adjusted net income (1) for the first quarter of 2021 was $21.9-million (36 cents per share) compared with $21.2-million (37 cents per share) in the first quarter last year. The year-over-year improvement in adjusted net income in 2021 largely reflects the factors noted above regarding income from operations, together with a decrease in finance costs due to the reduction in the company's debt over the last year.

                               SELECTED FINANCIAL INFORMATION 
 
                                                                                  First quarter      
                                                                               2021          2020 
Operating data                                                                                    
Gold produced (ounces)                                                       51,486        56,247 
Gold sold (ounces)                                                           55,317        63,701 
Average realized gold price ($/oz sold)                                      $1,812        $1,570 
Total cash costs ($/oz sold) (1)                                                862           667 
AISC ($/oz sold) (1)                                                          1,164           890 
                                                                                                  
Financial data ($000s, except per-share amounts)                                                
Revenue                                                                    $101,919      $100,976 
Adjusted EBITDA (1)                                                          46,323        50,437 
Net income                                                                  118,305        24,255 
Per share -- basic                                                             2.02          0.42 
Per share -- diluted                                                           1.28          0.42 
Adjusted net income (1)                                                      21,948        21,232 
Per share -- basic                                                             0.36          0.37 
Per share -- diluted                                                           0.31          0.31 
Net cash provided by operating activities                                    13,617        31,811 
Free cash flow (1)                                                            2,497        17,831 

(1) Refer to "Non-IFRS Measures" in the company's management's discussion and analysis.

Filing of National Instrument 43-101 technical report for the Segovia operations

Gran Colombia also announced today that it has filed an updated prefeasibility study technical report on its Segovia operations pursuant to National Instrument 43-101 (Standards of Disclosure for Mineral Projects). The technical report, which supports the disclosure made by the company in its March 31, 2021, news release and its 2020 annual management's discussion and analysis dated March 31, 2021, was prepared by SRK Consulting (U.S.) Inc. and is based on the updated mineral reserve and mineral resource estimates for the Segovia operations with an effective date of Dec. 31, 2020.

First quarter 2021 results webcast

As a reminder, Gran Colombia will host a conference call and webcast on May 14, 2021, at 9 a.m. Eastern Time, to discuss the results. Webcast and call-in details are as follows.

Live event link:  at the Edge Media Server website

Canada toll/international:  1-514-841-2157

North America toll-free:  1-866-215-5508

Colombia toll-free:  01-800-9-156-924

Conference ID:  50163709

A replay of the webcast will be available at the Gran Colombia website from May 14, 2021, until June 11, 2021.

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 high-grade Segovia operations. Gran Colombia's portfolio includes equity positions in several listed companies advancing gold and silver projects, including a 44.3-per-cent equity interest in Aris Gold (Colombia: Marmato; and Canada: Juby), a 17.8-per-cent equity interest in Gold X (Guyana: Toroparu), a 27.3-per-cent equity interest in Denarius Silver (Spain: Lomero; and Colombia: Guia Antigua and Zancudo) and a 25.8-per-cent equity interest in Western Atlas Resources Inc. (Nunavut: Meadowbank).

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