Q2 2018 Resultss21.q4cdn.com/.../GCM-Q2-2018-(Final).pdf · planned 20,000 meters drilling campaign. New structure discovered at depth in El Silencio mine….following up with $2.3M

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TSX: GCMAugust 15, 2018

The leading high‐grade gold producer in Colombia

Q2‐2018 Results

Lombardo Paredes Arenas, CEOMike Davies, CFO

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Forward‐Looking Statements DISCLAIMER

This presentation contains "forward‐looking information", which may include, but is not limited to, statements withrespect to the future financial or operating performance of the Company and its projects, and, specifically, statementsconcerning anticipated growth in annual gold production, future cash costs and AISC, future G&A and capex, excesscash flow and sinking funds for the senior debentures, future purchases and/or redemptions of the senior debenturesand future financings. Often, but not always, forward‐looking statements can be identified by the use of words suchas "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‐lookingstatements 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 orachievements expressed or implied by the forward‐looking statements. Factors that could cause actual results todiffer materially from those anticipated in these forward‐looking statements are described under the caption "RiskFactors" in the Company's Annual Information Form dated as of March 27, 2018 which is available for view on SEDARat www.sedar.com. Forward‐looking statements contained herein are made as of the date of this press release andGran Colombia disclaims, other than as required by law, any obligation to update any forward‐looking statementswhether as a result of new information, results, future events, circumstances, or if management's estimates oropinions should change, or otherwise. There can be no assurance that forward‐looking statements will prove to beaccurate, 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.

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H1‐2018 Highlights

2018 Priorities Progress UpdateImprove 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 &Outstanding2018‐08‐13

Fully DilutedShares

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

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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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SEGOVIA OPERATIONS Capital Investment

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SEGOVIA OPERATIONS Capital Investment

Maria Dama Plant, August 2018

STARI Water Treatment Plant

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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 Silenciomine….following up with $2.3M drilling program in H2‐2018.

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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

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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 Silenciomine….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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EXPLORATION Marmato Project

Veins13.3 Mt @ 4.6 g/t Aufor 1,979 Mozusing 1.9 g/t CoG

Porphyry27.0 Mt @ 2.1 g/t Aufor 1,858 Mozusing 1.9 g/t CoG

Location of 2018 Drilling Program:• 32 holes from Level 20• Up to 10,000m

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EXPLORATION Marmato Project

Transitional Zone: 50m x 50m spacing to convert Inferred to Indicated and to extend higher‐grade zone (> 3 g/t) along strike and to depth. Objective is to outline a higher grade block with an extension of at least 500m along strike. Will also aid mine design for expansion of the existing mine.

Deeps Zone: 100m x 100m spacing with a focus on extending the Deeps Zone to 700 asl.

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SANDSPRING RESOURCES

Sandspring Investmento Acquired 15% equity interest in Sandspring Resources (TSX‐V: SSP) on July 26, 2018o 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) resourceso Vended in our 30% carried participating interest in the Chicharron Project in Segovia and subscribed

for CA$4M (~US$3M) in Sandspring’s private placemento 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 Projecto 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.

ChicharronProject

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RESULTS Highlights

Mine development at Sandra K – July 17, 2014

2nd Quarter 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

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RESULTS

Segovia• Our primary focus 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)

SegoviaCompany 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

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‐

25

50

75

100

125

150

175

200

2016 2017 LTM H1‐17 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 ProductionRESULTSAISC (‐23%

)

000’s ozs

LTM = Latest 12‐months ended June 30, 2018

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Total Cash Cost Per Ounce (1)

RESULTS

117

89 $400

$600

$800

$1,000

$1,200

2016 2017 LTM H1‐17 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

$1,10211% of H1‐2018 Gold Sales

89% of H1‐2018 Gold Sales


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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.

RESULTSAISC (‐23%

)

US$/ozsold

$‐

$250

$500

$750

$1,000

2016 2017 LTM 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.


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Adjusted EBITDA (1)RESULTS

(1) Refer to Company’s MD&A for computation.

$‐

$20

$40

$60

$80

$100

2016 2017 LTM 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.


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‐20 0 20 40 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

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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 ‐

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2018 OUTLOOK

Priorities1. 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; and4. 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


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For Further Information, Contact: Mike Davies

Chief Financial Officer(416) 360‐4653

[email protected]

Town of Segovia

Documents

Q2 2018 Resultss21.q4cdn.com/.../GCM-Q2-2018-(Final).pdf · planned 20,000 meters drilling campaign. New structure discovered at depth in El Silencio mine….following up with $2.3M