Gran Colombia Announces Second Quarter and First Half 2021 Results
13 August 2021 - 12:34AM
Gran Colombia Gold Corp. (TSX: GCM; OTCQX: TPRFF) announced today
the release of its unaudited interim condensed consolidated
financial statements and accompanying management’s discussion and
analysis (MD&A) for the three and six months ended June 30,
2021. All financial figures contained herein are expressed in U.S.
dollars (“USD”) unless otherwise noted.
Second Quarter and First Half 2021
Highlights
- Gran Colombia has completed a major
step forward in its strategy to grow through
diversification, completing the acquisition on June 4,
2021 of all the shares of Gold X Mining Corp (“Gold X”) it did not
already own and then closing a $300 million offering on August 9,
2021 of 6.875% Senior Unsecured Notes due 2026 (the “2026 Notes”)
to fund the development of the Toroparu Project in Guyana, to
prepay the remaining $18.0 million balance of its Gold Notes and
for general corporate purposes. The Company is nearing completion
of an updated preliminary economic assessment (“PEA”) for the
Toroparu Project incorporating the recently announced high-grade
results from the 2020-2021 drilling program undertaken by Gold
X.
- The Company added a 27% equity
interest in Denarius Silver Corp. (“Denarius”) to its portfolio in
the first half of 2021, giving it exposure to the Lomero-Poyatos
polymetallic deposit located in Spain, in close proximity to the
Matsa JV project in the Iberian Pyrite Belt, and to the Guia
Antigua and Zancudo Projects in Colombia.
- In February 2021, Gran Colombia
also successfully brought its spin out of the Marmato Mining Assets
to a conclusion, one in which the Company has a continuing equity
ownership of 44% in Aris Gold Corporation (“Aris”). The Marmato
operating and financial results are only consolidated up to
February 4, 2021 and thereafter the Company equity accounts for its
investment in Aris.
- Gran Colombia published its
inaugural sustainability report in June 2021. The report reflects a
focused effort on measuring and disclosing the Company’s
Environmental, Social and Governance (“ESG”) priorities and
performance moving forward. The Company remains committed to the
health and safety of its employees, and through COMFAMA Colombia,
was the first mining company in Antioquia to secure vaccines for
employees and their families. Gran Colombia has purchased 8,000
vaccines (16,000 doses), created educational vaccine campaigns, and
has administered over 5,000 first doses with second doses beginning
mid-August.
- Gran Colombia’s gold
production from its Segovia Operations totaled 52,198
ounces in the second quarter of 2021 compared with 44,377 ounces in
the second quarter of 2020. Total gold production from Segovia for
the first half of 2021 amounted to 101,256 ounces compared with
94,723 ounces in the first half last year. In July 2021, Segovia’s
gold production, which reflected the impact of a planned four-day
maintenance shutdown at the plant, was 15,258 ounces. This brings
the Company’s trailing 12-months total gold production from its
Segovia Operations at the end of July 2021 to 201,688 ounces, up 3%
over 2020. The Company remains on track with its annual production
guidance of 200,000 to 220,000 ounces of gold from Segovia in 2021.
Including Marmato production up to February 4, 2021, consolidated
gold production for the first half of 2021 was 103,684 ounces
compared with 104,475 ounces in the first half last year.
- Consolidated
revenue amounted to $96.4 million and $198.3
million in the second quarter and first half of 2021, respectively,
up from $77.1 million and $178.1 million in the second quarter and
first half, respectively, of 2020. The year-over-year increase in
revenue largely reflects an increase in the Company’s realized gold
price (1) which averaged $1,805 per ounce sold in
the first half of 2021 compared with an average of $1,622 per ounce
sold in the first half last year.
- At the Segovia Operations,
total cash costs (1) averaged
$767 per ounce in the second quarter of 2021, compared with $654
per ounce in the second quarter of 2020, bringing the average for
the first half of 2021 to $796 per ounce compared with $625 per
ounce in the first half last year. The year-over-year increase in
Segovia’s total cash cost per ounce in the second quarter and first
half of 2021 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. Including
Marmato, consolidated total cash costs were $816 per ounce in the
first half of 2021 compared with $686 per ounce in the first half
last year.
- All-in sustaining
costs (“AISC”) (1)
per ounce sold for the Segovia Operations were
$1,101 and $1,110 in the second quarter and first half,
respectively, of 2021 compared with $965 and $890 in the second
quarter and first half, respectively, of 2020. The year-over-year
increase in Segovia’s AISC in 2021 reflects (i) the increased total
cash costs as described above and (ii) an increase in mine
development and other sustaining capital expenditures. Sustaining
capital expenditures at Segovia amounted to $19.9 million in the
first half of 2021, up from $13.0 million in the first half last
year which reflected a slowdown in activity in the second quarter
of 2020 during the early stages of the COVID-19 national quarantine
in Colombia that delayed many of the Company’s initiatives until
later in 2020. Including Marmato, consolidated AISC in the first
half of 2021 was $1,133 per ounce compared with $954 per ounce in
the first half last year.
- Adjusted EBITDA
(1) amounted to $48.0 million for the second
quarter of 2021 compared with $37.6 million in the second quarter
last year. This brings the total adjusted EBITDA for the first half
of 2021 to $94.3 million, up from $88.0 million in the first half
of 2020. The Company’s trailing 12-months adjusted EBITDA at the
end of June 2021 stood at $194.1 million compared with $187.8
million in 2020.
- Net cash provided by
operating activities in the second quarter of 2021 was
$12.8 million compared with $7.0 million in the second quarter last
year. Operating cash flow in the second quarter each year typically
bears the heaviest impact of income tax payments in Colombia which
amounted to $49.3 million in the second quarter of 2021, up from
$35.3 million in the second quarter last year. For the first half
of 2021, net cash provided by operating activities amounted to
$26.4 million compared with $38.9 million in the first half last
year reflecting the increased level of income tax payments in 2021
and $8.8 million of change of control payments made by Aris related
to the Aris Transaction.
- Free Cash Flow
(1) in the second quarter of 2021, which reflected
the increased levels of sustaining capital expenditures and income
tax payments this year, was negative $3.0 million compared with
negative $3.8 million in the second quarter of 2020. Free Cash Flow
for the first half of 2021 was negative $0.5 million compared with
$14.1 million in the first half of 2020. The Company’s Free Cash
Flow, adjusted to exclude Aris, in the first half of 2021 was $11.8
million compared with $20.1 million in the first half last year,
reflecting an increased level of income tax payments and capital
expenditures at Segovia in the first half of 2021 compared with the
first half last year.
- The Company’s balance
sheet continued to reflect solid liquidity with total cash
of $57.8 million and working capital of $59.3 million at the end of
June 2021.
- The Company returned a total of
$7.6 million to shareholders in the first half of 2021 with payment
of its monthly dividends totaling $4.4 million and
the repurchase of 702,000 shares at a cost of $3.2 million.
- Income from
operations in the second quarter of 2021 was $39.6
million, up from $30.4 million in the second quarter last year
largely on the strength of higher realized gold prices and higher
production volume offset partially by the increase in Segovia’s
total cash cost per ounce compared with the second quarter last
year. Income from operations in the first half of 2021 amounted to
$78.7 million compared with $71.3 million in the first half of 2020
despite including five fewer months of operating results from
Marmato due to the loss of control of Aris at the beginning of
February 2021. In the first half of 2021, the increase in realized
gold prices together with lower G&A and share-based
compensation expense more than mitigated the impact of Segovia’s
higher cash costs per ounce on income from operations.
- The Company reported net
income of $29.8 million ($0.41 per share) in the second
quarter of 2021 compared with a net loss of $18.6 million ($0.27
per share) in the second quarter of 2020, reflecting the $9.2
million improvement in income from operations as noted above and a
gain on financial instruments of $1.5 million in the second quarter
of 2021 compared with a loss on financial instruments of $35.4
million in the second quarter of 2020. For the first half of 2021,
net income amounted to $148.1 million ($2.31 per share) compared
with $5.7 million ($0.13 per share) in the first half last year.
Net income in the first half of 2021 reflected the $7.4 million
improvement in income from operations as noted above and also
benefitted from the $56.9 million gain on loss of control of Aris,
the $44.3 million gain on financial instruments (compared with a
$18.9 million loss on financial instruments in the first half last
year) and the $8.9 million gain on sale of the Zancudo Project. Net
income in the first half of 2021 included Aris Transaction costs of
$9.8 million while net income in the first half of 2020 included
Bluenose RTO Transaction costs of $16.7 million.
- Adjusted net
income (1) for the second quarter of 2021
was $23.6 million ($0.33 per share) compared with $17.5 million
($0.29 per share) in the second quarter last year. For the first
half of 2021, adjusted net income improved to $45.5 million ($0.69
per share) from $38.7 million ($0.66 per share) in the first half
last year. The year-over-year improvement in adjusted net income in
the second quarter and first half of 2021 largely reflects the
factors noted above regarding income from operations partially
offset by an increase in income tax expense.
- The Company’s ongoing
drilling program at Segovia continues to provide
encouraging results as announced in press releases dated June 9,
2021 and July 12, 2021. Gran Colombia is carrying out 60,000 meters
of drilling at Segovia in 2021 with 40,000 meters dedicated to the
ongoing in-mine and near-mine drill program at its four operating
mines and the other 20,000 meters is aimed at testing its highest
priority brownfield targets on the 24 known veins in its mining
title that it is not currently mining.
Selected Financial
Information
|
Second Quarter |
First Half |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Operating data |
|
|
|
|
|
Gold produced (ounces) |
|
|
52,198 |
|
|
48,228 |
|
|
103,684 |
|
|
104,475 |
|
Gold sold (ounces) |
|
|
52,838 |
|
|
45,078 |
|
|
108,155 |
|
|
108,779 |
|
Average realized gold price ($/oz sold) (1) |
|
$ |
1,797 |
|
$ |
1,696 |
|
$ |
1,805 |
|
$ |
1,622 |
|
Total cash costs ($/oz sold) (1) |
|
|
767 |
|
|
713 |
|
|
816 |
|
|
686 |
|
AISC ($/oz sold) (1) |
|
|
1,101 |
|
|
1,045 |
|
|
1,133 |
|
|
954 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
data ($000’s, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
96,353 |
|
$ |
77,134 |
|
$ |
198,272 |
|
$ |
178,110 |
|
Adjusted EBITDA (1) |
|
|
47,995 |
|
|
37,563 |
|
|
94,318 |
|
|
88,000 |
|
Net income (loss) |
|
|
29,799 |
|
|
(18,578 |
) |
|
148,104 |
|
|
5,677 |
|
Per share - basic |
|
|
0.41 |
|
|
(0.27 |
) |
|
2.31 |
|
|
0.13 |
|
Per share - diluted |
|
|
0.28 |
|
|
(0.27 |
) |
|
1.47 |
|
|
0.13 |
|
Adjusted net income (1) |
|
|
23,556 |
|
|
17,504 |
|
|
45,504 |
|
|
38,736 |
|
Per share - basic |
|
|
0.33 |
|
|
0.29 |
|
|
0.69 |
|
|
0.66 |
|
Per share - diluted |
|
|
0.28 |
|
|
0.25 |
|
|
0.58 |
|
|
0.56 |
|
Net cash provided by operating activities |
|
|
12,786 |
|
|
6,992 |
|
|
26,403 |
|
|
38,860 |
|
Free cash flow (1) |
|
|
(2,984 |
) |
|
(3,814 |
) |
|
(487 |
) |
|
14,074 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
Balance
sheet ($000’s): |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
57,803 |
|
$ |
122,508 |
|
Gold Notes, including current portion – principal amount
outstanding (2) |
|
19,750 |
|
|
35,525 |
|
Convertible Debentures – principal amount outstanding (3) |
|
CA18,000 |
|
|
CA20,000 |
|
(1) Refer to “Non-IFRS Measures” in the
Company’s MD&A.(2) The Gold Notes are recorded in the
Interim Financial Statements at fair value. At June 30, 2021 and
December 31, 2020, the carrying amounts of the Gold Notes
outstanding were $21.6 million and $38.5 million, respectively.
Refer also to Subsequent Event – Early Redemption on page
9.(3) The Convertible Debentures are recorded in the Interim
Financial Statements at fair value. At June 30, 2021 and December
31, 2020, the carrying amounts of the Convertible Debentures
outstanding were $19.2 million and $28.4 million, respectively.
Second Quarter 2021 Results
Webcast
As a reminder, Gran Colombia will host a
conference call and webcast on Friday, August 13, 2021 at 9:00 a.m.
Eastern Time to discuss the results.
Webcast and call-in details are as follows:
Live Event link:Canada Toll / International:North America Toll
Free:Colombia Toll Free:Conference ID: |
|
https://edge.media-server.com/mmc/p/8pi4h8ou1 (514) 841-21571 (866)
215-550801 800 9 156 92450186481 |
|
|
|
A replay of the webcast will be available at
www.grancolombiagold.com from Friday, August 13, 2021 until Friday,
September 10, 2021.
About Gran Colombia Gold
Corp.
Gran Colombia is a mid-tier gold producer with a
proven track record of mine building and operating in Latin
America. In Colombia, the Company is currently the largest
underground gold and silver producer with several mines in
operation at its high-grade Segovia Operations. In Guyana, the
Company is advancing the Toroparu Project, one of the largest
undeveloped gold projects in Latin Americas. Gran Colombia also
owns an approximately 44% equity interest in Aris Gold Corporation
(TSX: ARIS) (Colombia – Marmato), an approximately 27% equity
interest in Denarius Silver Corp. (TSX-V: DSLV) (Spain –
Lomero-Poyatos; Colombia – Guia Antigua and Zancudo) and an
approximately 26% equity interest in Western Atlas Resources Inc.
(TSX-V: WA) (Nunavut – Meadowbank).
Additional information on Gran Colombia can be
found on its website at www.grancolombiagold.com and by reviewing
its profile on SEDAR at www.sedar.com.
Cautionary Statement on Forward-Looking
Information:
This news release contains "forward-looking
information", which may include, but is not limited to, statements
with respect to the continuation of operations during the COVID-19
situation, production guidance, and other anticipated business
plans or strategies. 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
31, 2021 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.
For Further Information,
Contact:Mike DaviesChief Financial Officer(416)
360-4653investorrelations@grancolombiagold.com
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