l TSX: GCM l September Corporate Presentation September 2017

Transcription

1 l TSX: GCM l Corporate Presentation 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 sinking funds for the senior debentures and future purchases and/or redemptions of the senior debentures. Often, but not always, forward lookingstatementscanbeidentifiedbytheuseofwordssuchas"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"betaken,occurorbeachieved.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 30, which is available for view on SEDAR at 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. 2

3 Gran Colombia Gold Leading Colombian high-grade underground gold producer. undervalued versus peers! LTM gold production of 165,073 ounces, up 10% over 2016 annual production. LTM AISC averaged US$901/oz..expected to be below US$900/oz for the full year. Upside in resource expansion and exploration assets in Colombia. Canadian-listed (TSX: GCM) producer with offices in Toronto and Medellin. Primary focus is on the high-grade Segovia Operations. Continuing to expand and mechanize the underground mining operations (~86% of total LTM production). Recently 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 to conduct exploration and for the potential purchase of an interest. Reducing Senior Secured Debt and potential dilution ahead of maturity with Excess Cash Flow. LTM = Latest 12 month period ended June 30, 3

4 2016 ACCOMPLISHMENTS Exceeded Guidance Priorities Completed senior debt restructuring in January Made all monthly interest payments on Senior Debentures. Continued implementation of optimized mine plan at Segovia. Completed 10,000m drilling program at Segovia.upgraded resources. Improved balance sheet by reducing working capital deficit. Balance sheet improved through conversion of Senior Debentures to equity. Generated Excess Cash Flow for deposit to sinking funds for Senior Debentures and used funds to repurchase debt for cancellation Targets Guidance Actual Gold production (ozs) 120, , ,708 Cash cost/oz sold $700 $750 $706 AISC/oz sold $850 $950 $850 4

5 Mid Progress Highlights Priorities First Half Accomplishments Improve capital structure Share consolidation (1:15) Senior Secured debt extension Generate Excess Cash Flow = 10% of principal amount of Senior Debentures Continue implementation of optimized mine plan at Segovia: Development and mechanization at Providencia and El Silencio Upgrades at Maria Dama and TSF expansion Completed April 25,. $47M extended to 2024 on May 31,. Generated $5.5M in H1. $2.0M used to cancel $2.4M of 2020s (NCIB). $3.0M redemption of 2020s on July 31,. H1 sustaining capex of $11.9M (~$142/oz): ~40% related to exploration &development ~30% mines and related infrastructure ~15% Maria Dama plant upgrades ~10% related to new water treatment plant 20,000m drilling program at Segovia Commenced late January. 4 rigs currently in the field; 40% complete Update mineral resource estimates: Segovia Marmato Underground Completed effective March 15, PEA to be filed Expected 5

6 BOARD & MANAGEMENT Board of Directors Serafino Iacono Miguel de La Campa Robert Metcalfe * Mark Ashcroft * Jaime Perez Branger * De Lyle Bloomquist * Ed Couch * Hernan Martinez * Mark Wellings * Key Management Lombardo Paredes Michael Davies Alessandro Cecchi Hector Melendez Gabriel Gaviria Executive Co Chairman Executive Co Chairman Lead Independent Director; Lawyer Mining executive; Professional Engineer Managing Director, Blue Pacific Retired executive Investor Former Colombian Minister of Mines and Energy Mining executive; Professional Engineer Chief Executive Officer Chief Financial Officer Vice President, Exploration Mine General Manager, Segovia Operations Mine General Manager, Mineros Nacionales * Independent 6

7 CAPITAL STRUCTURE Post Consolidation TSX Symbol Exercise Price Issued & Outstanding Fully Diluted Shares (2) Common shares GCM 20.5M 20.5M 2018 Debentures (1) GCM.DB.U US$1.95 $46.0M 23.6M 2020 Debentures (1) GCM.DB.V US$1.95 $48.7M 25.0M 2024 Debentures (1) GCM.DB.X US$1.95 $47.0M 24.1M Options CA$ M Common shares consolidated on a 1:15 basis effective April 25,. Normal Course Issuer Bids ( NCIBs ): 2018 Debentures program ended July : repurchased $0.8M at a discount in the open market for cancellation Debentures program ended July : repurchased $3.9M at a discount in the open market for cancellation Debentures program ending July 2018: Up to $5.2M may be repurchased; $0.7M repurchased and cancelled to date. Redeemed $3.0M of 2020 Debentures at par on July 31,. NCIB repurchases and redemptions to date have reduced potential dilution by 4.3M shares. Extended the maturity date of $47.0M of 2020 Debentures to 2024 effective May 31,. 93.2M (1) Amounts shown for the Senior Debentures are at Face Value. (2) Pro forma assuming no further conversions, NCIB purchases or redemptions prior to that date. 7

8 VALUATION OPPORTUNITY Price / NAV Price / CFPS (e) EV / EBITDA (e) EV / Production (e) 0.7x 7.6x 7.0x $3, x $1, x 0.6x GCM Junior Peers GCM Junior Peers GCM Junior Peers GCM Junior Peers Undervalued Compared to Peer Group Significant Upside Opportunity Market data as at 20, Peer Group comprises 9 junior gold producers. Jr 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. 8

9 RELATIVE PERFORMANCE 200.0% Relative Performance Since January 1st 2016 (%) 150.0% 100.0% 50.0% 0.0% 77.6% 71.3% 24.4% 22.6% 0.0% (50.0%) Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Gold Silver GCM GDX GDXJ Relative Performance Since January 1st (%) 30.0% 40.5% 20.0% 10.0% 0.0% 12.5% 12.3% 8.1% 6.2% (10.0%) 1-Jan-17 1-Feb-17 1-Mar-17 1-Apr-17 1-May-17 1-Jun-17 1-Jul-17 1-Aug-17 1-Sep-17 Gold Silver GCM GDX GDXJ Chart data as at 20, Source: Bloomberg 9

10 PROPERTY MAP 2.1M oz Resources Earn in Option with GCM 14M oz Resources 10

11 SEGOVIA OPERATIONS Production Stage Category Gold Resource (1) (ozs) Grade (g/t) Measured 116, Indicated 984, Inferred 978, % LTM Production High-grade quartz-sulfide veins in historic mining district. Over 5 million ounces of gold produced through continuous mining over past 150 years. Recently extended mine life by 4 years to LTM (2) gold production totaled 141,374 ounces, up 12% over 2016 annual production. Total cash cost (3) averaged US$652/oz in H1-. Three active underground mines (31 historic mines) and a substantial land package of ~9,000 hectares. Unique RPP contract license grants mining rights in perpetuity. Continuing to expand and mechanize underground mining operations. Executing 20,000 meters drilling campaign in to further its efforts to upgrade and extend its mineral resources at its Segovia Operations. Local contract cooperative mining model is successfully leveraging artisanal mining capabilities in high-grade secondary pillar recovery operations and improving environmental management in the area. Maria Dama plant has capacity to handle up to 1,500 tpd. (1) Sourced from Company s Press Release dated April 19,. (2) LTM = Latest 12 months ended June 30,. (3) By product credit basis. Refer to Company s MD&A for computation. 11

12 SEGOVIA OPERATIONS LOM Plan Update Updated Mineral Resource effective March 15, Life of mine ( LOM ) plan updated in Q2 with key results as follows: Mine life extended by 4 years to 2026 Incorporates mining from 5 major mines within our titles 4.1M tonnes processed over the LOM LOM head grade averages 8.8 g/t 1.0M ozs of gold production LOM total cash cost of $697/oz and AISC (ex G&A) of $896/oz At $1,250 long term gold price, total undiscounted after tax FCF of $210M SRK is preparing a PEA technical report to be filed on SEDAR in 20,000 meters drilling program being conducted in aimed at increasing confidence in Mineral Resources and expanding resources for future mining. Measured & Indicated Au (koz) Inferred Au (koz) March 15, 1, December 31, ,278 Change vs % (300) 23% Mine life extension plus increase in LT gold price assumption to $1,250/oz triggered a $53M reversal of impairment ($35.5M after tax) in Q2. 12

13 SEGOVIA OPERATIONS 12 g/t M&I Resources 13

14 MARMATO PROJECT Exploration Stage 14% LTM 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 (1) gold production of 23,699 ozs, up 1% over 2016 annual gold production. Total cash cost (2) averaged US$1,061/oz in H1-. 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. Category Gold Resource (3) (ozs) Gold Grade (g/t) Silver Resource (3) (ozs) Silver Grade (g/t) Measured 1,661, ,606, Indicated 9,782, ,769, Inferred 2,581, ,408, (1) LTM = latest 12 months ended June 30,. (2) By product credit basis. Refer to Company s MD&A for computation. (3) Based on August 2012 NI43 101; updated for production to and reduction due to lapse of certain licenses in open pit area. 14

15 MARMATO PROJECT Focus on Underground Mine Expansion Legend DRILL HOLES AU PPM Pending > 2.5 BLOCKS AU PPM >

16 RESULTS Gold Production k 000 s ozs Segovia Marmato AISC ( 23%) LTM * Growth in Gran Colombia s total gold production has been driven by the high grade Segovia Operations. Marmato has been steady. production guidance is 150, ,000 ounces of gold. * LTM = Latest 12 months ended June 30, 16

17 RESULTS Total Cash Cost Per Ounce (1) $1,200 Segovia 84% of H1 gold sales US$/oz sold 117 Marmato 16% of H1 gold sales $1,061 $1,000 $800 $600 $652 $ H H1 Total cash cost for the Company averaged $709/oz in H1. Production growth helping to drive down fixed costs on a per ounce basis at Segovia. Appreciation of the Colombian peso relative to last year has increased USD equivalent cash costs to some extent in H1. Marmato s cash cost on a per ounce basis has also been impacted by lower grades this year compared to Continuing to expect FY Company average total cash cost to remain below $720/oz. (1) By product credit basis. Refer to Company s MD&A for computation. 17

18 RESULTS All In Sustaining Costs (1) $1,400 $1,200 $1,000 US$/oz sold G&A,Sustaining Capex and Other Total Cash Cost $901 AISC ( 23%) $800 $600 $ H1 LTM (2) average AISC expected to remain below $900/oz. (1) All In Sustaining cash cost 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. (2) LTM = Latest 12 months ended June 30,. 18

19 RESULTS All In Sustaining Costs (1) Barrick Gold US$/oz sold Kirkland Lake Gold Goldcorp Timmins / Alio Gold Centerra Gold Gran Colombia Gold Yamana Gold New Gold Argonaut Gold Kinross Gold TAHOE Resources Alamos Gold IamGold Detour Gold Guyana Goldfields $884 AISC ( 23%) ,000 1,200 Cash Cost AISC Gran Colombia s AISC is well positioned amongst industry peers. (1) Q2 reported results from issuer filings; AISC is a common performance measure but does not have any standardized meaning within the industry and therefore its computations may vary between companies. 19

20 RESULTS Adjusted EBITDA (1) $80 $71M $60 US$M $40 $20 $ LTM (2) H1 adjusted EBITDA of $35M brings the LTM adjusted EBITDA at the end of June to $71M, up 8% over FY2016. At June 30,, Net Debt/EBITDA is 2X and Interest Coverage is 9X. (1) Refer to Company s MD&A for computation. (2) LTM = Latest 12 months ended June 30,. 20

21 RESULTS Excess Cash Flow (1) H1 Adjusted EBITDA $34.9M Income taxes paid Capex Interest paid Other obligations Local debt repayments Working capital Sinking Fund Balances June 30, : 2020/2024 Debentures $3.1M 2018 Debentures $1.5M Used $1.4M of 2020 Sinking Fund to repurchase $1.7M of debentures in H1 under NCIB. Used $3.0M of 2020 Sinking Fund at June 30, for partial redemption at par on July 31,. Excess Cash Flow (1) $5.5M US$M Expecting Excess Cash Flow of ~$16M for FY, up from $2.9m in FY2016 (1) As defined in the Indentures (available on the Company s web site) for the 2018 and 2020/2024 Debentures. 21

22 RESULTS Balance Sheet June December 2016 Adjusted working capital deficit * Cash $3.0M $2.8M Accounts receivable $10.3M $11.4M Accounts payable and accrued liabilities ($19.8M) ($16.6M) Wealth taxes payable ($0.5M) Income taxes payable ($1.2M) ($6.1M) Mining titles and compensation agreements payable ($10.5M) ($11.0M) Inventories and other items, net $10.8M $9.2M ($7.9M) ($10.3M) Total short and long term debt Local debt, net of cash in trust $0.7M $1.4M 2018 Debentures ** $46.0M $49.7M 2020 Debentures ** $52.5M $101.2M 2024 Debentures** $47.0M N/A Sinking funds for 2018 and 2020 Debentures ($4.6M) ($0.5M) * Excludes current portion of short and long term debt ** Aggregate principal amounts issued and outstanding 22

23 OUTLOOK Maintaining Guidance Priorities 1. Improve capital structure: share consolidation and debt extension. 2. Generate Excess Cash Flow = 10% of principal amount of Senior Debentures. 3. Continue implementation of optimized mine plan at Segovia: Continue development and mechanization at Providencia and El Silencio; Additional upgrades at Maria Dama and tailings storage expansion; 4. 20,000m drilling program at Segovia; and 5. Update mineral resource estimates at Segovia and Marmato Underground. Targets Guidance H1 Actual LTM * Gold production (ozs) 150, ,000 85, ,073 Cash cost/oz sold < $720 $709 $718 AISC/oz sold < $900 $910 $901 * LTM = Latest 12 months ended June 30, 23

24 For Further Information, Contact: Mike Davies Chief Financial Officer (416) Town of Segovia 24