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November 12, 2012 TSX: GCM
Business Update - Maria Consuelo Araujo (CEO)
Q3 2012 Results - Mike Davies (CFO)
Operational Update - Don East (COO)
Q&A
Q3 2012 Results and Operational Update
1
November 12, 2012 TSX: GCM
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 Gran Colombia Gold Corp and its subsidiaries (“Gran Colombia” or “GCM”) and their respective projects. 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. Forward-looking statements contained herein are made as of the date of this presentation based on current expectations and beliefs 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.
DISCLAIMER FORWARD-LOOKING STATEMENTS
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November 12, 2012 TSX: GCM
BUSINESS UPDATE Maria Consuelo Araujo, Chief Executive Officer
3
November 12, 2012 TSX: GCM
Corporate Grow gold production in FY 2012
Q3 Production of 26,912 ounces, +24% from Q3’11
At Segovia we achieved our targeted rate of 1,000 tpd, but production was impacted by lower grades
Now expecting total production of between 108,000 and 113,000 oz in FY 2012, an increase of 18% to 24% compared to 2011
Close US$100M financing for Segovia expansion
Closed October 30, 2012
Achieve significant cash flow from mining operations
$10.8M in Q3 & $30.6M YTD, up $17.7M from YTD’11
Positive Agent of change in our communities
2012 Plan – Progress Q3 2012 BUSINESS UPDATE
4
November 12, 2012 TSX: GCM
Segovia
Increase capacity at Maria Dama to 1,500 tpd by 2013
Operating >1,000 tpd, up from 517tpd in 2011
Adding new underground mining equipment and capital development
Invested approximately $14M YTD, including Maria Dama upgrades
Begin development of new mechanized mine
Building dedicated project team, final engineering, procurement & arranging equipment leasing underway
Continued exploration with 51,000 m drilling program
Phase 1 Infill program underway at Segovia
Marmato
Prefeasibility study Expected completion in Q4 2012
2012 Plan – Progress Q3 2012 BUSINESS UPDATE
5
November 12, 2012 TSX: GCM
Q3 2012 RESULTS
6
Mike Davies, Chief Financial Officer
November 12, 2012 TSX: GCM
Production 26,912 oz Au, a 24% increase YoY & 22% increase YTD
Revenue US$47.1M, 21% higher than Q3’11, and $130.5M YTD
Consolidated Cash Cost US$1,261 per ounce, a $52 improvement over Q2’11, but higher than expected primarily due to lower grades at Segovia
Gross margin of US$6.1M and $17.7M YTD
G&A of $4.1M, includes additional expenses to collect overdue VAT claims, maintenance costs associated with properties held for disposal and increased activities from various company initiatives
Net loss US$0.7M, or $0.00 per share, compared to a net loss of $5.9 million, or $0.02 per share in Q3’11
FINANCIAL RESULTS
7
Q3 2012 Highlights
November 12, 2012 TSX: GCM
FINANCIAL RESULTS
Gold ounces
Q3 2012 Actual
Q2 2012 Actual
YTD Actual
FY 2012 Target
Segovia
Company Operated 8,227 6,804 22,054
Artisanal 12,887 13,805 40,307
Total Segovia 21,114 20,186 62,361 85-90,000
Marmato 5,798 4,997 16,418 23,000
Consolidated 26,912 25,607 78,779 108-113,000
Segovia production expected to ramp through 2012
Achieved targeted ore processing rate of >1,000 tpd in September
Capital development underway to return grades to expected levels
Marmato returned to expected grades of 2.9 g/t in Q3
Silver production of 31,682 ounces in Q3 and 91,033 ounces YTD
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Production
November 12, 2012 TSX: GCM
FINANCIAL RESULTS
US$ Q1 2012 Q2 2012 Q3 2012
Average Gold Price $ 1,676 $ 1,623 $ 1,642
Segovia $ 1,202 $ 1,320 $ 1,288
Marmato $ 1,184 $1,288 $ 1,174
Consolidated $ 1,199 $ 1,313 $ 1,261
Segovia
Cash costs on track in Q3 to less than $1,200 per ounce if not for impact of lower grades
Productivity improvements at company operated mines materializing in Q3 with mining costs (80% of total costs) improving to $168 per tonne, a 40% improvement compared to Q1’12
Modern mechanized mining to drive long term cost improvements
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Cash Cost per Ounce Trend
November 12, 2012 TSX: GCM
FINANCIAL RESULTS
US$ (millions) Q3 2012 YTD 2012
Cash – Opening Balance $ 4.1 $ 20.3
Cash from Mining Operations
$ 10.8 $ 30.6
Other Operating Uses ($10.2) $ 0.6 ($ 28.8) $ 1.8
Net Cash from Bank Debt $ 4.9 $ 13.8
Capex and Exploration
Segovia ($ 5.5) ($15.1)
Marmato ($ 2.5) ($19.8)
Other Exploration $ -- ($ 8.0) ($ 1.4) ($ 36.3)
Other Sources $ -- $ 2.0
Cash – September 30, 2012 $ 1.6 $ 1.6
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Cash Flow
November 12, 2012 TSX: GCM
FINANCIAL RESULTS
US$ Q3 2012 YTD 2012 Plan
CAPEX
Segovia - complete Maria Dama expansion, mining equipment, lab & tailings facilities
$ 5M $ 14M $ 15 - 20M
Marmato – Pre-Feasibility, social programs, environmental studies & mining titles
$ 3M $ 18M $ 19M
$ 8M $ 32M $ 34+M
EXPLORATION
Segovia (51,000m drilling campaign) $ 0M $ 2M $ 5M
Marmato $ 0M $ 3M $ 3M
Zancudo $ 0M $ 1M $ 1M
$ 0M $ 6M $ 9M
Overall spending plan reduced by ~$13M to reflect lowered production guidance CapEx focus in 2nd half on Segovia
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Capex, Exploration
November 12, 2012 TSX: GCM 12
PAMPA VERDE Financing
Closed $100M Gold-Linked Note, October 30, 2012
5 year, 10% note with principal tied to spot price of gold; $1,400 notional price
Financial equivalent of 71,429 ounces of gold, equates to <10% of expected 5 year production at Segovia
Gold-Linked Note $100M
Escrowed Interest $ 20M
Transaction Costs $ 7M
Net Proceeds $ 73M
Total cost of project approximately $100M
Funded by net proceeds from financing and capital leasing
Repayments & interest do not impact cash flow until November 2014
G-L Notes Leasing
Processing Plant $40M
Tailings & Infrastructure $11M
Mine Development $12M
Mechanized Equipment $ 6M $20M
Contingency $ 4M
$73M $20M
November 12, 2012 TSX: GCM
OPERATIONAL UPDATE
13
Don East, Chief Operating Officer
Site of Pampa Verde Project
November 12, 2012 TSX: GCM
Development potential of 14.4M oz gold deposit, average grade 0.91 g/t New deep zone of >300M tonnes
potential ore
Producing 23,000 oz gold & 36,000 oz silver annually (underground) Q3 produced 5,798 oz gold & 9,684
oz silver
Pre-Feasibility Stage Potential phased underground &
open pit mines Expected completion of study by
end of Q4’12
MARMATO
(1) Marmato Technical Report, dated June 21, 20012, filed August 7, 2012
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Q3 Summary
Category (1) Gold Resource Silver Resource
Measured 1,725,000 oz 8,011,000 oz
Indicated 10,064,000 oz 72,319,000 oz
Inferred 2,588,000 oz 9,429,000 oz
Total 14,377,000 oz 89,759,000 oz
Marmato, Caldas COLOMBIA
November 12, 2012 TSX: GCM
MARMATO Deep Mineralize Body Further Explored
Includes a bonanza grade zone of 16.9m, with a true width of 4.4m, abundant visible gold & includes 1.8m of 159 g/t of gold
November 12, 2012 TSX: GCM
MARMATO Optionality for Development
Open Pit • ~12M oz gold at 0.9 g/t
Underground • ~2M oz gold at 3 g/t
New Porphyry Zone: • Est. 300M tonnes of
mineralization • Potential incremental
resources 10 to15M oz gold
November 12, 2012 TSX: GCM 17
PAMPA VERDE Overview
Grow production to 200,000 ounces of gold at Segovia annually
Reduce cash costs to around $800 per ounce
Modern mining and access to new Las Verticales veins systems
New 2,500 tpd plant
Filled Area Las Verticales
El Silencio Providencia
New 5m x 5m ramp access to existing Providencia and El Silencio mines
12 months for mine development
18 months for plant commissioning
November 12, 2012 TSX: GCM 18
PAMPA VERDE Overview
New Plant
Crushers, SAG and ball mill, flotation, CIL - cyanide destruct
To process Company mined ore, with legacy Maria Dama plant to process 3rd party ore
Underground Access & Mine 5m x 5m decline, long-hole retreat mining
Tailings Options will be mine backfill and surface storage
with full recycle of process water
Permitting Chocho tailing facility included in PMA. Plant
and mine to be included as modification to PMA
Final engineering, procurement and initial site works starting
November 12, 2012 TSX: GCM
Produced 21,114 oz in Q3 New mill tested at >1,300 tpd Q3 ore processed 82,000 t (+52% vs Q2) October averaged 1,000 tpd
Cost per ounce $1,288, down $32 vs Q2 Average grade 9.5 g/t with 85% plant
recovery compared to Q2 average grade 13.8 g/t with 87% plant recovery
Expect to produce 85,000 to 90,000 oz in 2012, up 24 to 31% compared to 2011 Expect to average 1,000 tpd in Q4 while
rest of plant upgrades are completed
SEGOVIA
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Q3 Summary
(1) GCM Resource update dated March 5, 2012 & April 15,2012
Category (1) Gold Resource Grade
Measured 136,000 oz 16.1 g/t
Indicated 156,000 oz 9.9 g/t
Inferred 1,138,000 oz 13.6 g/t
Total 1,430,000 oz 13.3 g/t
One of the Top 10 Producing Mines by Grade in the World Source: NRH Research, Global Gold Mines & Deposits 2012 (publically traded companies with deposits greater than one million ounces in all resource categories)
November 12, 2012 TSX: GCM 20
Maria Dama Expansion
Ball Mill with 1,500tpd capacity – completed mid-May 2012
Crushing capacity improvements
4 of 6 new flotation cells in operation
Cyanidation circuit refurbishment complete
Tailings – new Chocho facility will reduce cost from $7 to $2 per tonne. Design complete and awaiting permit approvals
New plant thickener being constructed for increased plant throughput in 2013
SEGOVIA
Next Steps:
Improved sampling, instrumentation & automation scheduled for 2013
517 509 590
790 822
1,066 1,000
-
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
Tonnes per day
FY’11 Q1’12 Q2’12 Jul Aug Sep Oct
November 12, 2012 TSX: GCM
>20 12-20 6-12 3-6 <3
SEGOVIA
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Resource Growth – Exploration Underway
Phase I: Infill – upgrade existing resources Targets; Providencia, Sandra K & El Silencio Sur/Las
Aves 82 holes totalling 21,000 metres Upgrading >200,000 ounces of gold to Indicated From October 2012 to April 2013
Phase II: Exploration - extend known structures 30,000 metres planned Target >500,000 ounces of gold to Inferred From April 2013 to December 2013
Budget US$15 million 5-6 surface rigs will be operating in both phases
Providencia
Sandra K El Silencio
Au (ppm) drilling intercepts
November 12, 2012 TSX: GCM TSX: GCM 21 MARCH 2012
Q&A
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