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Q2 2018 Results
Gran Colombia Gold reported its Q2-2018 results, highlighting: - Transformation of its capital structure is now complete after refinancing debt and settling debentures. - $15.7 million spent at its Segovia operations in H1-2018 on exploration, development, and capital projects. - Drilled 11,186 meters of its planned 20,000 meter drilling campaign at Segovia, discovering a new structure at depth in the El Silencio mine. - Technical studies and up to 10,000 meters of drilling underway at its Marmato project. - Acquired a 15% equity interest in Sandspring Resources, whose Toroparu project hosts 10.4 million ounces of
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Q2 2018 Results
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- 2. 2 TSX: GCM August 15, 2018 Forward‐Looking Statements DISCLAIMER This presentation contains"forward‐looking information", which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its projects, and, specifically, statements concerning anticipated growth in annual gold production, future cash costs and AISC, future G&A and capex, excess cash flow and sinking funds for the senior debentures, future purchases and/or redemptions of the senior debentures and future financings. Often, but not always, forward‐looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward‐looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Gran Colombia to be materially different from any future results, performance or achievements expressed or implied by the forward‐looking statements. Factors that could cause actual results to differ materially from those anticipated in these forward‐looking statements are described under the caption "Risk Factors" in the Company's Annual Information Form dated as of March 27, 2018 which is available for view on SEDAR at www.sedar.com. Forward‐looking statements contained herein are made as of the date of this press release and Gran Colombia disclaims, other than as required by law, any obligation to update any forward‐looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward‐looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward‐looking statements.
- 3. 3 TSX: GCM August 15, 2018 H1‐2018 Highlights 2018 Priorities ProgressUpdate Improve capital structure • Refinance 2020 and 2024 Debentures………………….. • Settle 2018 Debentures………………………………………… US$98M Offering completed April 30, 2018. Redeemed 20’s & 24’s on May 14, 2018. Completed on August 13, 2018. Settled balance 100% with shares. TSX Symbol Exercise Price Issued & Outstanding 2018‐08‐13 Fully Diluted Shares Common shares GCM 48,150,305 48,150,305 2024 Gold Notes (1) Unlisted $93,125,000 Warrants GCM.WT.A CA$48.75 280,795 Unlisted (2) CA$2.21 12,151,008 12,151,008 Options CA$2.55 1,774,660 1,774,660 CA$3.16 1,200,000 1,200,000 CA$27.60 47,000 63,275,973 Transformation of Gran Colombia’s capital structure is now complete! (1) Amount shown for the Gold Notes is at Face Value. (2) Expected to be listed on the TSX and trading under the symbol GCM.WT.B on or about September 4, 2018
- 4. 4 TSX: GCM August 15, 2018 H1‐2018 Highlights 2018 Priorities ProgressUpdate Improve capital structure • Refinance 2020 and 2024 Debentures………………….. • Settle 2018 Debentures………………………………………… US$98M Offering completed April 30, 2018. Redeemed 20’s & 24’s on May 14, 2018. Completed on August 13, 2018. Settled balance 100% with shares. Continue implementation of optimized mine plan at Segovia…………………………………………………………………….. Al programs underway….US$15.7M spent at Segovia in H1‐2018, including exploration and development and capital projects: • $7.7M on exploration and development; • $4.9M on mine equipment, infrastructure, ventilation improvements; • $2.3M on Maria Dama plant and lab, including costs associated with El Choco TSF and new filter press; and, • $0.8M related to 44kV connection at the mines. Construction of El Chocho TSF is continuing and started receiving tailings in July. New filter press being constructed for commissioning in 2019.
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- 7. 7 TSX: GCM August 15, 2018 H1‐2018 Highlights 2018 Priorities ProgressUpdate Improve capital structure • Refinance 2020 and 2024 Debentures………………….. • Settle 2018 Debentures………………………………………… US$98M Offering completed April 30, 2018. Redeemed 20’s & 24’s on May 14, 2018. Completed on August 13, 2018. Settled balance 100% with shares. Continue implementation of optimized mine plan at Segovia…………………………………………………………………….. Al programs underway….US$15.7M spent at Segovia in H1‐2018, including exploration and development and capital projects. 20,000m drilling program at Segovia………………………. Executed 11,186 meters or approximately 56% of its planned 20,000 meters drilling campaign. New structure discovered at depth in El Silencio mine….following up with $2.3M drilling program in H2‐2018.
- 8. 8 TSX: GCM August 15, 2018 EXPLORATION Segovia Operations • 88 holes totalling 11,186m representing 56% of the planned 20,000m for 2018 were completed in the first half of 2018 •Multiple high‐grade results from underground sampling program in deepest levels of the El Silencio mine and new structure at El Silencio identified • Added $2.3M to the 2018 drilling program starting in September to test extensions another 200m below the existing resource Additional drilling at the El Silencio mine in H2‐2018 2018 Channel Samples • 424 total samples • 291 samples (69% of total) > 10 g/t • 163 samples (38% of total) > 30 g/t
- 9. 9 TSX: GCM August 15, 2018 H1‐2018 Highlights 2018 Priorities ProgressUpdate Improve capital structure • Refinance 2020 and 2024 Debentures………………….. • Settle 2018 Debentures………………………………………… US$98M Offering completed April 30, 2018. Redeemed 20’s & 24’s on May 14, 2018. Completed on August 13, 2018. Settled balance 100% with shares. Continue implementation of optimized mine plan at Segovia…………………………………………………………………….. Al programs underway….US$15.7M spent at Segovia in H1‐2018, including exploration and development and capital projects. 20,000m drilling program at Segovia………………………. Executed 11,186 meters or approximately 56% of its planned 20,000 meters drilling campaign. New structure discovered at depth in El Silencio mine….following up with $2.3M drilling program in H2‐2018. Technical studies (PEA) and up to 10,000m drilling program at Marmato……………………………………………….. JDS Energy & Mining has been working with the Company on the initial study phase of the project. Drilling commenced in mid‐June.
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- 12. 12 TSX: GCM August 15, 2018 SANDSPRING RESOURCES Sandspring Investment o Acquired 15% equity interest in SandspringResources (TSX‐V: SSP) on July 26, 2018 o Sandspring’s Toroparu Project is considered to be one of the largest undeveloped gold deposits in South America with 10.4Mozs in‐situ gold (MI&I) resources o Vended in our 30% carried participating interest in the Chicharron Project in Segovia and subscribed for CA$4M (~US$3M) in Sandspring’s private placement o Lombardo Paredes, GCM’s CEO, has been appointed to the board The Transaction “The Sandspring transaction will allow us to diversify our project exposure outside of Colombia and to leverage our previous experience in the Venezuelan Guyana Shield greenstone belt” Serafino Iacono Chicharron Project o Sandspring acquired 100% of the rights to explore, develop and mine a 386 hectare area within our mining title in the Segovia area o Project Area lies outside of the areas of our principal mining operations in Segovia. o The Guia Antigua vein that is the current focus of the Chicharron Project appears to be similar in geology, structure, vein style and mineralogy to other veins in the Segovia mining district. Chicharron Project
- 13. 13 TSX: GCM August 15, 2018 RESULTS Highlights Mine development at Sandra K – July 17, 2014 2ndQuarter 1st Half 2018 2017 2018 2017 52,906 46,075 Gold production (ozs) 105,578 85,083 53,051 45,179 Gold sales (ozs) 102,661 83,613 $1,286 $1,225 Realized gold price ($/oz) $1,290 $1,201 $696 $676 Cash cost ($/oz) (1) $683 $709 $913 $884 AISC ($/oz) (1) $905 $910 $68.9M $56.0M Revenue $133.7M $101.7M $26.5M $21.3M Adjusted EBITDA (1) $53.9M $34.9M ($30.7M) $33.8M Net income (loss) ($25.4M) $33.0M ($1.09) $1.65 Per share ($1.02) $1.64 $8.2M $6.8M Adjusted net income (1) $18.1M $9.9M $0.29 $0.33 Per share $0.72 $0.50 $11.2M $3.2M Excess Cash Flow (1) $13.8M $5.5M (1) Refer to Company’s MD&A for computation
- 14. 14 TSX: GCM August 15, 2018 RESULTS Segovia • Our primaryfocus is our Company mines which provided 95% of Segovia’s total H1‐2018 gold production. • Improvement in head grades and tonnes mined in the Providencia mine has been key catalyst for Segovia’s production growth in 2018 versus. Marmato • Continues to be a steady producer…. evaluating expansion options to incorporate the Deeps mineralization. Production 2nd Quarter 1st Half 2018 2017 2018 2017 Gold (ozs) Segovia Company mines 19,045 21,707 El Silencio 40,732 40,994 22,618 14,294 Providencia 43,284 22,702 2,867 889 Sandra K 4,923 1,664 44,530 36,890 Total Company mines 88,939 65,360 2,541 3,338 Other contract mines 4,604 7,636 47,071 40,228 Total Segovia Operations 93,543 72,996 5,835 5,847 Marmato 12,035 12,087 52,906 46,075 Total Company 105,578 85,083 47,930 44,691 Silver (ozs) 93,736 86,370
- 15. 15 TSX: GCM August 15, 2018 ‐ 25 50 75 100 125 150 175 200 2016 2017 LTMH1‐17 H1‐18 Segovia Marmato 194k Growth in Gran Colombia’s total gold production has been driven by the Company mines in our high‐grade Segovia Operations. Marmato has been steady. Raised 2018 annual production guidance….expect to surpass 200,000 ounces of gold this year. Gold ProductionRESULTS AISC (‐23%) 000’s ozs LTM = Latest 12‐months ended June 30, 2018
- 16. 16 TSX: GCM August 15, 2018 Total Cash Cost Per Ounce (1) RESULTS 117 89 $400 $600 $800 $1,000 $1,200 2016 2017 LTMH1‐17 H1‐18 Segovia $646 US$/oz sold $620 The Company’s Total Cash Cost average decreased to $683/oz in the first half of 2018 from $709/oz in the first half last year. • Greater proportion of total gold sales is coming from the lower cost Segovia Operations this year. • Segovia’s H1‐2018 cash cost improved as production growth lowers fixed costs per ounce and per ounce costs have benefitted from the increased head grades in Company‐operated areas at the Providencia mine. Continue to expect 2018’s annual average Total Cash Cost will remain below $735/oz. (1) By‐product credit basis. Refer to Company’s MD&A for computation. 2016 2017 LTM H1‐17 H1‐18 Marmato $1,176 $1,102 11% of H1‐2018 Gold Sales 89% of H1‐2018 Gold Sales LTM = Latest 12‐months ended June 30, 2018
- 17. 17 TSX: GCM August 15, 2018 All‐In Sustaining Costs (1) (1) AISC per ounce includes total cash costs per ounce and adds the sum of G&A, sustaining capital and certain E&E costs and provision for environmental discharge fees. Refer to the Company’s MD&A for computation. RESULTS AISC (‐23%) US$/oz sold $‐ $250 $500 $750 $1,000 2016 2017LTM H1‐17 H1‐18 G&A,Sustaining Capex and Other Total Cash Cost $905$915 2018 average AISC is expected to below $950/oz…Total Cash Cost per ounce is under control and using the improved gold price environment to explore, develop and modernize our mining operations. LTM = Latest 12‐months ended June 30, 2018
- 18. 18 TSX: GCM August 15, 2018 Adjusted EBITDA (1) RESULTS (1) Refer to Company’s MD&A for computation. $‐ $20 $40 $60 $80 $100 2016 2017LTM H1‐17 H1‐18 $53.9M $94.6M US$M Q2‐2018 was the 3rd consecutive quarter with >$26M of Adjusted EBITDA. H1‐2018’s Adjusted EBITDA of $53.9M is up 55% compared to H1‐2017. Increase in EBITDA driven by production growth, improved gold prices and relatively stable total cash costs. LTM = Latest 12‐months ended June 30, 2018
- 19. 19 TSX: GCM August 15, 2018 ‐20 0 2040 60 Excess Cash Flow (1) Working capital Other obligations Interest paid Income taxes paid Capex Adjusted EBITDA $13.8M Excess Cash Flow (1) RESULTS (1) Refer to the Company’s MD&A for the full computation. US$M H1 2018 vs. H1 2017 $53.9M Improvements in our internally generated cash flow has improved the Company’s liquidity. $34.9M $5.5M
- 20. 20 TSX: GCM August 15, 2018 Balance SheetRESULTS * Excludes current portion of long‐term debt ** Aggregate principal amounts issued and outstanding June 2018 December 2017 Adjusted working capital deficit * Cash$24.9M $3.3M Cash in trust for 2018 Debentures $3.5M $4.3M Accounts receivable $11.0M $14.4M Accounts payable and accrued liabilities ($18.0M) ($18.8M) Income taxes payable ($10.5M) ($8.4M) Marmato compensation agreements payable ($11.6M) ($11.0M) Inventories and other items, net $15.2M $10.9M $14.5M ($5.3M) Long‐term debt, including current portion Finance leases $0.3M $0.4M 2018 Debentures ** $33.6M $45.2M Gold Notes** $98.0M $95.7M Gold Trust Account for Gold Notes $3.8M ‐
- 21. 21 TSX: GCM August 15, 2018 2018 OUTLOOK Priorities 1. Improve capital structure: Settle 2018 Debentures; Refinance 2020/2024’s (Complete) 2. Continue implementation of optimized mine plan at Segovia: –Continue infrastructure, ventilation and other capital initiatives at Providencia and El Silencio mines; expand ore storage at Maria Dama plant; – Commence development and mechanization at Sandra K; – Environmental initiatives including tailings storage expansion and filter press; 3. 20,000m drilling program at Segovia; and 4. Technical studies (PEA) and up to 10,000m drilling program at Marmato. 2018 Targets H1‐2018 LTM 2018 Guidance Gold production 105,578 ozs 194,316 ozs > 200,000 ozs Cash cost/oz sold $683 $705 < $735/oz AISC/oz sold $905 $915 < $950/ oz Guidance – On Track LTM = Latest 12‐months ended June 30, 2018
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