October Corporate Presentation. The Mid-Tier Gold Miner At a Junior Price TSX: GCM OTCQX: TPRFF. Rising Production and EBITDA TSX: GCM

Transcription

1 Corporate Presentation OTCQX: TPRFF The Mid-Tier Gold Miner At a Junior Price Rising Production and EBITDA 1

2 DISCLAIMER Forward-Looking Statements 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 future repayments of its gold-linked notes. 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 and its interim MD&A dated as of August 14, 2018, both of which are available for view on SEDAR at Forward-looking statements contained herein are made as of the date of this presentation 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. 2

3 GRAN COLOMBIA GOLD Leading Colombian high-grade underground gold producer. undervalued versus peers! LTM (September 2018) gold production of 214,439 ounces, up ~23% over 2017 annual production. LTM (June 2018) Adjusted EBITDA of $95M yielded $25M of Excess Cash Flow. Upside in resource expansion and exploration assets in Colombia. ~17% interest in Sandspring Resources (TSXV: SSP) and its Toroparu Project in Guyana. Canadian-listed () producer with offices in Toronto and Medellin. Also listed in the US on the OTCQX (TPRFF). Primary focus is on the high-grade Segovia Operations. Continuing to explore, expand and mechanize the underground mining operations (89% of total H1-2018production). InAugust 2017, announced a 4-year extension in mine life to The Marmato Project, one of the Top-20 largest undeveloped global gold deposits, provides significant optionality to gold and silver prices. Currently evaluating the potential to expand the existing underground mining operations, incorporating additional resources from the deep mineralization. The Zancudo Project, a former high-grade producer, provides exploration upside. IAMGOLD signed an option agreement in 2017 and is conducting exploration toward a potential purchase and joint venture on the project. Simplified capital structure and strengthened balance sheet in US$25M of cash on the balance sheet at June 30, LTM = Latest 12-month period 3

4 2018 OUTLOOK Guidance Priorities 1. Improve capital structure: Settle 2018 Debentures; Refinance 2020/2024 s. 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 and 8,500m drilling program at Marmato Targets 2018 Guidance LTM Gold production 210, ,000 ozs (3) 214,439 (1) Cash cost/oz sold < $735/oz $705 (2) AISC/oz sold < $950/ oz $915 (2) (1) Latest 12-months ended September30, (2) Latest 12-months ended June 30, (3) Revised in September 2018; up from initial guidance of 182, ,000 ozs. 4

5 2018 UPDATE On Track 2018 Priorities Progress Update Improve capital structure Refinance 2020 and 2024 Debentures.. Settle 2018 Debentures US$98M Offering completed April 30, New Gold Notes listed on the TSX in October (GCM.NT.U). Redeemed 20 s & 24 s on May 14, Completed on August 13, Settled balance 100% with shares. Continue implementation of optimized mine plan at Segovia.. Common shares listed on OTCQX (TPRFF) in October. 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 16,200m through September, ~81% of its planned 20,000m drilling campaign. New structure discovered at depth in El Silencio mine.following up with 10,000m additional drilling program starting in early November Technical studies (PEA) and 8,500m 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 with two rigs and by end of September, 34% of program completed. 5

6 2018 RESULTS Highlights 2 nd Quarter 1 st Half ,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 Mine development at Sandra K July 17, 2014 $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 6

7 2018 RESULTS Production 2 nd Quarter 1 st Half 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, 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 Segovia Our primary focus is our Company mines which provided 95% of Segovia s total H 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. 7

8 PERFORMANCE Gold Production k 175 Segovia Marmato kozs AISC (-23%) LTM * Focus on our high-grade Segovia Operations is driving growth. Raised guidance to 210, ,000 ounces for * LTM = Latest 12 months ended September 30,

9 PERFORMANCE All-In Sustaining Costs (1) $1,400 $1,200 Capex, G&A US$/oz sold $1,000 $800 Total Cash Cost $915 AISC (-23%) $600 $ LTM (2) Optimization of Segovia s cost structure continues to benefit Total Cash Cost/oz. AISC reflecting increased focus on exploration, development and modernization of Segovia. (1) Refer to the Company s MD&A for computation. (2) LTM = Latest 12 months ended June 30,

10 PERFORMANCE Adjusted EBITDA (1) $100 $95M $80 US$M $60 $40 $20 $ LTM (2) Adjusted EBITDA growth is driving improved capacity to fund capex programs, service debt and add cash to our balance sheet. (1) Refer to Company s MD&A for computation. (2) LTM = Latest 12 months ended June 30,

11 PERFORMANCE Excess Cash Flow (1) $95M of Adjusted EBITDA Latest 12 Months Ended June 30, 2018 Income taxes $19M Capex $31M Excess Cash Flow is used to meet principal repayments of debt and to build cash balances. Interest $9M Working capital and other obligations $11M Excess cash flow $25M Over the next 12 months, principal repayments of the Gold Notes to be funded with Excess Cash Flow will amount to $19.5M. (1) Refer to Company s MD&A for computation. 11

12 BALANCE SHEET Senior Secured Gold-Linked Notes due 2024 Issued April 30, 2018 US$93.1 million currently outstanding 8.25% coupon paid monthly Quarterly principal repayments in cash with gold kicker above US$1,250/oz Less than 10% of Segovia s projected future production is required to meet principal repayments Strengthened (.NT.U) B- Stable Outlook Cash US$25 million as of June 30, 2018 $178M $73M 2.1X 10.8X 4.6X 0.7X December 2015 June LTM 2015 LTM Net Debt Adjusted EBITDA to Net Interest Net Debt to Adjusted EBITDA LTM = Latest 12 months ended June 30,

13 CAPITAL STRUCTURE Simplified Common Shares 48.2 million Market Capitalization (as of October 19, 2018) CA$118 million Warrants GCM.WT.A: 0.3 CA$48.75 (2019 expiry) GCM.WT.B: 12.2 CA$2.21 (2024 expiry) Stock Options 1.8 CA$2.55 ( expiry) 1.2 CA$3.16 (2023 expiry) Fully Diluted = ~63 million common shares 13

14 WHY INVEST IN GCM? Valuation Opportunity Price / CFPS (2018e) EV / EBITDA (2018e) EV / Production (2018e USD/oz) 4.2X 3.8X $1, X 1.7X $817 GCM Peers GCM Peers GCM Peers The Mid-Tier Gold Miner at a Junior Price. Stockhouse, August 2018 Market data as at October 19, Peers includes LMC, GUY, GSC, TGZ, AKG, ROXG and AR. Peers amounts represent mean values for Peer Group. Forward-looking figures for GCM based on flat gold price of US$1,250/oz Source: FactSet, Bloomberg, equity research and company disclosure. 14

15 PROPERTY MAP Resources 1.2 Mozs M&I 1.1 Mozs Inferred Reserves 660 kozs Earn- in Option with GCM Resources 3.9 Mozs M&I 4.2 Mozs Inferred 15

16 SEGOVIA OPERATIONS Production Stage Category Gold Resource (1) (ozs) Grade (g/t) Measured 146, Indicated 1,100, Inferred 1,107, Category Gold Reserves (3) (ozs) Grade (g/t) Proven 68, Probable 592, % 2017 Production High-grade quartz-sulfide veins in historic mining district. Over 5 million ounces of gold produced through continuous mining over past 150 years. In 2017, extended expected mine life by 4 years to LTM September 2018 gold production totaled 189,828 ounces, up 28% over 2017 production. Total cash cost (2) averaged US$620/oz in H1-2018, down from US$664/oz in Three active underground mines (27 known veins) and a substantial land package of ~9,000 hectares, including a unique RPP contract license over ~3,000 hectares which grants mining rights in perpetuity. Mineral Reserves of 660,000 ozs as of December 2017 (68,000 ozs Proven, 592,000 ozs Probable). Continuing to expand and mechanize underground mining operations. Executing 20,000 meters drilling campaign in 2018 to further its efforts to upgrade and extend its mineral reserves and resources at its Company mines. Local contract cooperative mining model is successfully leveraging artisanal mining capabilities in high-grade secondary pillar recovery operations in the Company mines and improving environmental management in the area with other small contract mines. Maria Dama plant has capacity to handle up to 1,200 tpd at present; expandable to 1,500 tpd. (1) Sourced from Segovia Technical Report, May (2) By-product credit basis. Refer to Company s MD&A for computation. (3) Mineral Resources are reported inclusive of the Mineral Reserve. 16

17 SEGOVIA OPERATIONS Driving Cash Flow Top 5 Highest-Grade Underground Gold Operations in 2017 (1) Mine Country Owner Au Grade in Milled Ore Q g/t Au Cash Costs Q USD/oz Fosterville Australia Kirkland Lake $226 Yaramoko Burkina Faso Roxgold $417 Segovia Colombia Gran Colombia $662 Cerro Negro Argentina Goldcorp $457 Turquoise Ridge USA Barrick Gold $550 Gold grade is a profitability driver for a mine. miningintellince.com Gran Colombia s cash cost is below the median for all mines Median Au Cash Costs Throughout the World in 2017 (US$/oz) (1) Fosterville Yaramoko Segovia Cerro Negro Turquoise Ridge (1) Source: IMARC (miningintelligence.com Whitepaper, July 2018) 17

18 SEGOVIA OPERATIONS License Boundaries for Segovia & Carla (100% Owned ) Proximity Maps Proximity to Medellin LEGEND Carla License Segovia License ASSET LOCATION Segovia MEDELLIN El Silencio Sandra K Providencia 18

19 THE SEGOVIA MINES Blue Sky Potential Currently operating mines on only 3 of 27 known veins in the RPP-140 license. Mill Chicharron (Sandspring Resources) 19

20 THE SEGOVIA MINES Blue Sky Potential Segovia Heat Map - Drilling Collars 20

21 SEGOVIA OPERATIONS 2018 Exploration A total of 16,200m of drilling, representing 81% of the planned 20,000m for 2018, have been completed in the first nine months of Refer to detailed press releases dated June 18, 2018 and October 3, Multiple high-grade results achieved in the underground sampling program in the deepest levels of the El Silencio mine and a new structure identified at El Silencio; added another 10,000m, starting in November 2018, to test extensions another 200m below the existing resource at El Silencio. Drilling continuing to increase confidence in our mineral resources with further high-grade intercepts at our three producing mines; encouraging initial results from step-out drilling at the Cristales Vein Channel Samples 424 total samples 291 samples (69% of total) > 10 g/t 163 samples (38% of total) > 30 g/t Additional drilling at the El Silencio mine expected to commence in November

22 MARMATO PROJECT Exploration Stage 14% 2017 Production Mineralization is hosted by sheeted pyrite vein system in dacite to andesite porphyry stocks. Mountain of gold in historic mining district. Ranked in Top-20 of undeveloped global gold deposits by size. LTM September 2018 gold production of 24,611 ozs, ~2% below Total cash cost (1) averaged US$1,061/oz in H compared with US$1,049/oz in Deep zone drilling shows that mineralization at Marmato extends at least 800m below the limit of the current underground mining operation and is still open at depth. Evaluating potential to expand existing underground mining operations. JDS engaged to complete technical studies in 2018 and we plan to drill 8,500m in Category Gold Resource (2) (ozs) Gold Grade (g/t) Silver Resource (2) (ozs) Silver Grade (g/t) Measured 388, ,774, Indicated 3,485, ,787, Inferred 4,194, ,005, (1) By-product credit basis. Refer to Company s MD&A for computation. (2) Underground resource information based on Marmato Technical Report, November

23 MARMATO PROJECT Underground Resources Updated Mineral Resource (MRE): Completed effective June 16, Changed the focus of the mining style from open pit to underground mining. Increased the cut-off grades used from 0.3 g/t in the 2012 MRE to 1.2 g/t and 1.9 g/t for the different mineralization styles. Major focus on modelling of the geological continuity of the veins resulted in reduced tonnages but higher grades. Additional Deeps Zone mineralization included for the first time within the Inferred category. NI Report on the MRE filed on SEDAR on November 20, 2017 Next Steps: 2018 drilling program underway Completing certain technical studies toward PEA in 2019 Category Quantity Grade Metal Au Ag Au Ag Mt g/t g/t 000's oz 000's oz Underground Vein** Measured and Indicated ,979 9,434 Inferred ,275 5,722 Underground Porphyry*** Measured and Indicated ,858 12,892 Inferred ,655 Underground Deeps Zone*** Measured and Indicated Inferred ,142 2,628 Underground Combined Measured and Indicated ,897 22,561 Inferred ,194 15,005 Mineros Nacionales Mine ** Vein mineral resources are reported at a cut-off grade of 1.9 g/t. *** Porphyry and Deeps mineral resources are reported at a cut-off grade of 1.2 g/t. 23

24 MARMATO PROJECT 2018 Exploration Veins g/t Au for 1,979 Moz using 1.9 g/t CoG Porphyry g/t Au for 1,858 Moz using 1.9 g/t CoG Location of 2018 Drilling Program: 32 holes from Level 20 Total of 8,500m planned 24

25 MARMATO PROJECT 2018 Exploration As announced in our press release dated October 4, 2018: Two drill rigs in operation since late June 2018; 9 holes completed so far totaling ~2,900m (34% of total planned). Early results have outlined two new zones of Deeps-style mineralization with grades falling in the medium-grade interval (2-3 g/t Au). Drilling continues to increase our confidence in the geological model with the potential to increase resources and expected mine life at the Marmato Project. 25

26 ZANCUDO PROJECT Under Option to IAMGOLD The Zancudo Project is located 27 km south of Medellin. Excellent infrastructure. In Municipality of Titiribi, a town dependent on mining (coal). Multi-million ounce epithermal to mesothermal vein system in the Cauca Porphyry Belt, adjacent to Brazil Resources Titiribí Project (7.9 Moz Au Inferred 0.5 g/t Au). 1.5M ounces of past production. IAMGOLD Option Option granted in March 2017 to acquire a 65% interest by incurring an aggregate of US$10M of exploration over a 6-year period. 2 nd option granted for further 5% interest if feasibility study completed. IAMGOLD commenced exploration (drilling) in 2017 and has continued their program in 2018.refer to our October 9, 2018 press release for results to-date. 26

27 SANDSPRING RESOURCES Guyana Sandspring Investment o Acquired ~17% equity interest in Sandspring Resources (TSX-V: SSP) in 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 in July 2018; purchased additional shares for CA$1M (~US$0.8M)in a private transaction completed in early. o GCM has representation on Sandspring s board. Chicharron Project o o o Sandspring acquired 100% of the rights to explore, develop and mine a 386 hectare area within our mining title in the Segovia area Project Area lies outside of the areas of our principal mining operations in Segovia. 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 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 27

28 Town of Segovia For Further Information, Contact: Mike Davies Chief Financial Officer (416)