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Gran Colombia Gold Reports Fourth Quarter and Full Year 2017 Results; Turnaround Doubles Adjusted EBITDA to $75.5 Million in Two Years; Reports First Mineral Reserve for its Segovia Operations
March 27, 2018
TORONTO, March 27, 2018 (GLOBE NEWSWIRE) --

Gran Colombia Gold Corp. (TSX:GCM)
announced today the release of its audited consolidated financial
statements and accompanying management’s discussion and analysis (MD&A)
for the year ended December 31, 2017. All financial figures contained
herein are expressed in U.S. dollars (“USD”) unless otherwise noted.

Serafino Iacono, Executive Co-Chairman of Gran Colombia, commenting on
the Company’s results for 2017, said, “We are pleased with the progress
we have made the last two years and to see the improvement in the
operating and financial results we are reporting today.
We have been characterized by some as a turnaround story, which may be
true, but our focus has remained on cash, costs and execution.
Our 2017 results demonstrate that we are firing on all cylinders.
2017’s gold production was up 16% from 2016. Adjusted EBITDA increased
by 14% over last year and is almost double the amount reported for
2015.
Excess Cash Flow came in as expected at $16.4 million.
Our Senior Debentures decreased by $10 million while the cash in the
sinking funds for the debt grew by more than $11 million.
We also made solid progress in our strategy to enhance the value of our
assets.
At Segovia, we added more ounces to our Mineral Resource estimate
through exploration than we mined in 2017 and we reported our first
ever Mineral Reserve for the project today. We continued to invest in
the infrastructure at Segovia, not just in mine development and mining
equipment but in areas that raise the bar in health and safety,
environmental management and through our foundation, social projects
that benefit the community.
At Marmato, we announced a change in October to the future approach to
expanding mining operations with an updated underground Mineral
Resource estimate and plans to take additional steps forward in 2018 to
understand the potential of the Deeps mineralization.
And finally, earlier in 2017, we entered into an option agreement with
IAMGOLD to potentially bring them in as our partner in the future
development of our Zancudo Project.
Operationally, 2018 will be a continuation of our strategy and with
expected improvements to our capital structure through the recently
announced best efforts refinancing of our 2020 and 2024 Debentures, we
believe we are poised to unlock value for our shareholders.”

Fourth Quarter and Full Year 2017 Highlights

Gran Colombia exceeded its guidance for 2017 with total gold production
reaching 173,821 ounces, up 16% over 2016. Fueled by continued growth
in the Company’s high-grade Segovia Operations, total gold production
increased to 51,699 ounces in the fourth quarter of 2017, up 26% over
the fourth quarter last year. Gran Colombia expects its Segovia
Operations will produce 158,000 to 167,000 ounces in 2018, raising
2018’s total gold production guidance to a range of
182,000 to 193,000 ounces.

In 2017, the Company completed approximately 17,500 meters of drilling
at the Segovia Operations, leading to an updated Mineral Resource
estimate as of December 31, 2017 with 3.4 million tonnes at an average
grade of 11.4 g/t representing 1.2 million ounces of gold in Measured
and Indicated Resources, an increase of 13% from the March 2017 Mineral
Resource Estimate.
Inferred Resources include 3.4 million tonnes at an average grade of
10.1 g/t representing 1.1 million ounces of gold, also up 13%. The
Company also reported its first Mineral Reserve for Segovia with a
total of 1.7 million tonnes at an average grade of 12.4 g/t
representing 660,000 ounces of gold as of December 31, 2017.

In October 2017, the Company announced an updated Mineral Resource
estimate for its Marmato Project, shifting focus for potential future
development from the previous open pit concept, and increasing cut-off
grades in anticipation of developing an expanded underground mining
operation.
Measured and Indicated Resources consist of 41.0 million tonnes at an
average grade of 2.9 g/t representing 3.9 million ounces of gold and
Inferred Resources are 52.0 million tonnes at an average grade of 2.5
g/t representing 4.2 million ounces of gold. Technical studies and
further drilling are planned for 2018.

The Company announced in March 2017 that it signed an option agreement
with IAMGOLD for the exploration and potential sale of an interest in
the Company’s Zancudo Project.
IAMGOLD completed approximately 4,000 meters of drilling on the Zancudo
Project in 2017 and has plans to continue its drilling program in 2018.

Revenue increased 17% over 2016 to $215.4 million in 2017, positively
impacted this year by the increased level of gold production compared
with last year.
Gold sales volume in the fourth quarter of 2017 rebounded following the
civil disruption at Segovia in the third quarter, and combined with
4% better realized gold prices in the fourth quarter of 2017 compared
with the fourth quarter last year, contributed to a 41% year-over-year
improvement in fourth quarter revenue to $70.9 million in 2017.

Total cash costs (1) and all-in sustaining costs(“AISC”) (1) averaged
$720 per ounce and $918 per ounce, respectively, for the full year in
2017, up from $706 per ounce and $850 per ounce, respectively, last
year.
An increase in Marmato’s production costs on a per ounce basis and the
impact of the third quarter civil disruption on Segovia’s total cash
costs increased the Company’s total cash costs average for 2017.
The Company’s commitment to exploring, expanding and modernizing its
Segovia Operations led to a planned increase in sustaining capital
expenditures, funded by the Company’s improved operating cash flow,
from $96 per ounce sold in 2016 to $150 per ounce sold in 2017 and was
a key driver behind the increased AISC in 2017.

Adjusted EBITDA (1) increased 14% over 2016 to $75.5 million in 2017,
nearly double its adjusted EBITDA from two years ago driven by
production growth, improved gold prices and relatively stable total
cash costs.

The Company generated $8.6 million of Excess Cash Flow(1) in the fourth
quarter of 2017, bringing the total for 2017 to $16.4 million, meeting
its guidance for the year and well above the $2.9 million generated in
2016 while it finished cleaning up its working capital deficit.

The Company continued to execute its strategy in 2017 to reduce its
Senior Debentures ahead of maturity.
Using its Excess Cash Flow to repurchase and cancel debt through its
Normal Course Issuer Bid (“NCIB”), completing a $3.0 million partial
redemption at par of the 2020 Debentures on July 31, 2017 and through
holders’ conversions, the total aggregate principal amount of the
Senior Debentures decreased $10 million in 2017 to $140.9 million at
the end of the year (less than two times adjusted EBITDA) while total
cash in the sinking funds increased from $0.5 million at the end of
2016 to $11.9 million at the end of 2017. The Company recently
announced a proposed best efforts financing to refinance its 2020 and
2024 Debentures. Refer to the Company’s March 22, 2018 press release.

The Company reported net income for the fourth quarter of 2017 of
$4.9 million, or $0.23 per share, compared with a net loss of $15.3
million, or $0.82 per share, in the fourth quarter last year, which
included an $11.4 million after-tax impairment charge. For the full
year, 2017’s net income was $36.8 million, or $1.81 per share,
including a $30.4 million after-tax ($1.49 per share) reversal of
impairment related to the Segovia Operations, compared with $3.7
million, or $0.30 per share, in 2016.

Adjusted net income (1) for the fourth quarter of 2017 was
$9.1 million, or $0.44 per share, up from $3.4 million,
or $0.19 per share, in the fourth quarter last year.
For the full year, 2017’s adjusted net income amounted to
$23.0 million, or $1.13 per share, compared with
$15.6 million, or $1.26 per share, last year.
The improvement in 2017’s annual adjusted net income compared
with last year reflects the positive impact on income from
operations of the higher gold production this year,
lower financing costs due to debt reductions and a
decrease in Colombian wealth tax compared with the prior year.

Refer to “Non-IFRS Measures” in the Company’s MD&A.
Financial and Operating Summary

A summary of the financial and operating results for the fourth quarter
and full year 2017 and 2016 follows:

http://www.grancolombiagold.com/news-and-investors/press-releases/press-release-details/2018/Gran-Colombia-Gold-Reports-Fourth-Quarter-and-Full-Year-2017-Results-Turnaround-Doubles-Adjusted-EBITDA-to-755-Million-in-Two-Years-Reports-First-Mineral-Reserve-for-its-Segovia-Operations/default.aspx

For Further Information, Please Contact:
Mike Davies
Chief Financial Officer
[phone]
[e-mail]

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Source: Gran Colombia Gold

http://www.grancolombiagold.com


Michael Davies, CPA, CA - CFO

https://www.youtube.com/watch?v=aHRv6CTT3ok


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