Corporate Presentation

Transcription

1 The leading high grade gold producer in Colombia 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, reduction of cash costs and AISC, future G&A, capex and excess cash flow, interest payments on the senior debt and future purchases and/or redemptions of the senior debt. 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 lookingstatementsinvolveknownand 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, 2017 which is available for view on SEDAR at Forwardlooking 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! Canadian-listed () producer with offices in Toronto/Medellin. Annual gold production increased 28% to 149,708 ounces in AISC averaged US$850/oz for 2016 and 2017 average expected to be below US$900/oz. Upside in resource expansion and exploration assets. Primary focus is on high-grade Segovia Operations. Continuing to expand and mechanize the underground mining operations (~84% of total production). Announced 174% increase in M&I resources to 1.1M ozs in April The Marmato Project, one of the Top-20 largest undeveloped global gold deposits, provides significant optionality to gold and silver prices with current resources in excess of 14M ozs of gold and almost 90M ozs of silver. Deep mineralization holds potential to add resources. The Zancudo Project, a former high-grade producer, provides exploration upside. IAMGOLD signed an option agreement in 2017 to conduct exploration and for the potential purchase of an interest. Excess Cash Flow being set aside to retire Senior Debentures. Repurchasing debt through NCIBs launched in

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 2017 OUTLOOK 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 plant and tailings storage expansion ,000m drilling program at Segovia upgrade and extend resources. 5. Update mineral resource estimates at Segovia and Marmato Underground Targets 2016 Actual 2017 Guidance Gold production (ozs) 149, , ,000 Cash cost/oz sold $706 < $720 AISC/oz sold $850 < $900 5

6 BOARD & MANAGEMENT Board of Directors Serafino Iacono Miguel de La Campa Robert Metcalfe * Mark Ashcroft * Jaime Perez Branger * Ed Couch * Ian Mann * 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 Investor Resource sector fund manager 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 Common shares GCM 20.5M 20.5M 2018 Debentures * GCM.DB.U US$1.95 $46.0M 23.6M 2020 Debentures * GCM.DB.V US$1.95 $100.5M 51.5M 95.6M Warrants GCM.WT.A Unlisted CA$48.75 CA$ M 67K Options CA$2.55 CA$ M 47K Gran Colombia launched Normal Course Issuer Bids in July 2016 to repurchase the 2018 and 2020 Debentures on the open market for cancellation. To date, $3.4M has been repurchased and cancelled. Consolidated common shares on a 1:15 basis effective April 25, Proposals made to extend maturity of 2020 Debentures to 2024; process expires May 11, * Amounts shown for the Senior Debentures are at Face Value. 7

8 RELATIVE PERFORMANCE Share Price Relative performance since January 1, % 150.0% 100.0% 50.0% 0.0% (50.0%) 65.1% 58.8% 25.4% 19.3% (17.9%) (100.0%) 1-Jan-16 1-Mar Apr Jun Aug Oct Dec Feb Apr-17 Gold Spot $/Oz Silver Spot $/Oz GCM GDX GDXJ 40.0% 30.0% Relative performance since January 1, % 10.0% 0.0% (10.0%) 10.6% 9.8% 6.4% 2.3% (2.7%) (20.0%) 1-Jan Jan Jan Feb-17 2-Mar Mar-17 1-Apr Apr-17 Gold Spot $/Oz Silver Spot $/Oz GCM GDX GDXJ Chart data as at April 27, 2017 Source: Bloomberg 8

9 VALUATION OPPORTUNITY Peer Comps Price / NAV Price / CFPS (2017e) EV / EBITDA (2017e) EV / Production (2017e) 0.8x 8.2x 6.7x $3, x $1, x 0.5x GCM Junior Peers GCM Junior Peers GCM Junior Peers GCM Junior Peers Undervalued compared to Peer Group significant upside opportunity Market data as at April 26, Peer Group comprises 12 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. 9

10 SEGOVIA OPERATIONS Production Stage Category Gold Resource (1) (ozs) Grade (g/t) 84% 2016 Production Measured 116, Indicated 984, Inferred 978, High-grade quartz-sulfide veins in historic mining district. Over 5 million ounces of gold produced through continuous mining over past 150 years. Production increased ~36% to 126,261 ounces of gold in Cash cost (2) averaged US$655/oz in 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 2017 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 been expanded to handle up to 1,500 tpd. (1) Sourced from Company s Press Release dated April 19, (2) By product credit basis. Refer to Company s MD&A for computation. 10

11 SEGOVIA OPERATIONS 12 g/t M&I Resources 11

12 MARMATO PROJECT Exploration Stage 16% 2016 Production Mineralization is hosted by sheeted pyrite vein system in dacite to andesite porphyry stocks. Mountain of gold in historic mining district. Existing underground mining operation with production of 24,447 ozs of gold in Cash cost (2) averaged US$981/oz in Ranked in Top-20 of undeveloped global gold deposits by size. Deep zone drilling in 2012 shows that mineralization at Marmato extends at least 800m below the limit of the current underground mining operation and is still open at depth. Small drilling program in 2016 yielded encouraging results. Merits further exploration. Category Gold Resource (1) (ozs) Gold Grade (g/t) Silver Resource (1) (ozs) Silver Grade (g/t) Measured 1,661, ,606, Indicated 9,782, ,769, Inferred 2,581, ,408, (1) Based on August 2012 NI43 101; updated for production to and reduction due to lapse of certain licenses in open pit area. (2) By product credit basis. Refer to Company s MD&A for computation. 12

13 MARMATO PROJECT Deep Mineralization Gaining Attention Legend DRILL HOLES AU PPM Pending > 2.5 BLOCKS AU PPM >

14 RESULTS Gold Production Segovia Marmato 000 s ozs AISC ( 23%) 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. 14

15 RESULTS Total Cash Cost Per Ounce (1) $1,200 Segovia 84% of 2016 gold sales US$/oz sold 117 Marmato 16% of 2016 gold sales $1,000 $981 $800 $655 $600 $ Total cash cost for the Company of $706/oz in 2016 was down 3% from Growth in production from the lower cost Segovia Operations (84% of total gold sales in 2016 vs 79% in 2015) was a key driver to reducing the Company s total cash cost per ounce in Segovia s growth also helped to reduced its fixed operating costs on a per ounce basis. Marmato s total cash cost per ounce was adversely impacted in 2016 by lower grades and mill recovery. (1) By product credit basis. Refer to Company s MD&A for computation. 15

16 RESULTS All In Sustaining Costs (1) $1,400 $1,200 $1,000 US$/oz sold G&A,Sustaining Capex and Other Total Cash Cost $850 AISC ( 23%) $800 $600 $ AISC averaged $850/oz in 2016, down from $863/oz in Capital investment in 2016 focused on exploration, development and modernization programs at Segovia 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. 16

17 RESULTS All In Sustaining Costs (1) New Gold US$/oz sold Barrick Gold Gran Colombia Gold Goldcorp Yamana Gold Centerra Gold $850 AISC ( 23%) Argonaut Gold Kinross Timmins IAMGOLD Kirkland Lake Gold TAHOE Resources $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 Cash Cost AISC Gran Colombia s AISC is well positioned amongst industry peers. (1) Full Year 2016 reported results per Q4 Full Year 2016 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. 17

18 RESULTS Adjusted EBITDA (1) $70 $66.0 M $60 $50 US$M $40 $30 $20 $10 $ adjusted EBITDA of $66M was up 72% over Growth in gold production and improved gold prices while controlling cash costs were the keys to Gran Colombia s adjusted EBITDA growth in (1) Refer to Company s MD&A for computation. 18

19 RESULTS Excess Cash Flow 2016 US$M Adjusted EBITDA $66.0M Capex Interest paid Payables reduction Income taxes paid Other working capital Equity and wealth taxes Uses of cash in 2016 to reduce working capital deficit and improve the balance sheet. Other obligations Debt restructuring costs Local debt repayments Excess Cash Flow (1) $2.9M Expecting 2017 Excess Cash Flow of $15M (10% of principal amount of Senior Debentures) (1) As defined in the Indentures (available on the Company s web site) for the 2018 and 2020 Debentures. 19

20 For Further Information, Contact: Mike Davies Chief Financial Officer (416) Town of Segovia 20