Q4 and Full Year 2017 Results

Transcription

1 The leading high grade gold producer in Colombia Q4 and Full Year 2017 Results Lombardo Paredes Arenas, CEO Mike Davies, CFO 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, future purchases and/or redemptions of the senior debentures and future financings. 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 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 readeris cautioned nottoplace undue reliance onforward looking statements. 2

3 Results Highlights 2017 Priorities Accomplishments Improve capital structure Share consolidation 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, $10M debt reduction in Generated $16.4M in $11.9M in the Sinking Funds at $24M of capex at Segovia in 2017 including exploration and development Met capex program objectives, including health & safety and environment initiatives El Chocho TSF construction is underway 20,000m drilling program at Segovia Completed ~17,500 meters Increased Mineral Resources by 13% Update mineral resource estimates: Segovia MRE completed effective March 15, 2017 PEA filed September 2017 MRE updated December 31, 2017 PFS probable reserve of 660,000 ozs Marmato Underground MRE completed effective June 16,

4 RESULTS Highlights 4 th Quarter Year ,699 40,879 Gold production (ozs) 173, ,708 56,100 41,357 Gold sales (ozs) 173, ,962 $1,252 $1,201 Realized gold price ($/oz) $1,226 $1,218 $719 $725 Cash cost ($/oz) $720 $706 $899 $899 AISC ($/oz) $918 $850 $70.9M $50.4M Revenue $215.4 $184.1M $26.8M $16.5M Adjusted EBITDA (1) $75.5M $66.0M $4.9M ($15.3M) Net income $36.8M $3.7M $0.23 ($0.82) Per share (2) $1.81 $0.30 $9.1M $3.4M Adjusted net income (1) $22.9M $15.6M Mine development $0.44 at Sandra K July $ , 2014 Per share (2) $1.13 $1.26 $8.6M $0.5M Excess Cash Flow (1) $16.4M $2.9M (1) Refer to Company s MD&A for computation. (2) Basic per share; 2016 information has been adjusted to reflect the 1:15 consolidation completed on April 25,

5 RESULTS Production 4th Quarter Year Gold (ozs) Segovia Company mines 17,761 9,977 Company-operated areas 50,248 30,174 25,723 22,003 Contractor-mined areas 87,091 84,586 43,484 31,980 Total Company mines 137, ,760 2,104 2,846 Other contract mines 11,320 11,501 45,588 34,826 Total Segovia Operations 148, ,261 6,111 6,053 Marmato 25,162 23,447 51,699 40,879 Total Company 173, ,708 45,491 42,389 Silver (ozs) 165, ,169 Segovia Our primary focus is our Company mines.92% of Segovia s 2017 gold production came from El Silencio, Providencia and Sandra K. Development of new Company operatedminingareasat Providenciain2017 was a key enablerofsegovia s growth. Marmato Continues to be a steady producer continuing to evaluate expansion options to incorporate the Deeps mineralization. 5

6 RESULTS Gold Production k 000 s ozs Segovia Marmato AISC ( 23%) Growth in Gran Colombia s total gold production has been driven by the high grade Segovia Operations. Marmato has been steady Annual production guidance of 182, ,000 ounces of gold. 6

7 RESERVES+RESOURCES Segovia Operations Resources Measured & Indicated Inferred Tonnes (kt) Grade (g/t) Au (koz) Tonnes (kt) Grade (g/t) Au (koz) December 31, 2017 (1) 3, ,245 3, ,107 March 15, 2017 (2) 2, ,100 3, Change % % 20,500 meters of new data from 157 drillholes from programs and almost 6,000 meters of channel samples. Reaffirms high grade nature of the gold deposits. Largest gains in all categories were at El Silencio (Veta National area at depth) Reserves Probable Preliminary results from a PFS being prepared by SRK Tonnes (kt) Grade (g/t) Au (koz) December 31, 2017 (1) 1, Six year mine life LoM total cash cost of $669/oz LoM AISC of $915/oz LoM undiscounted after tax cash flow of $142 $1,300 Au (1) Source: Company press release dated March 27, (2) Source: Company press release dated April 19,

8 BLUE SKY POTENTIAL Segovia Operations Heat Map Drilling Collars 981 Holes 148,000m 8

9 RESULTS Total Cash Cost Per Ounce (1) US$/oz sold $1,200 $1,000 Segovia 86% of 2017 gold sales 117 Marmato 14% of 2017 gold sales $1,049 $800 $664 $600 $ The Company s Total Cash Cost average increased to $720/oz in 2017 from $706/oz last year due to: An increase in Marmato s production costs on a per ounce basis, and The adverse impact on Segovia s Total Cash Cost of the 42 day civil disruption in the third quarter of Expecting 2018 s annual average Total Cash Cost will be below $735/oz. (1) By product credit basis. Refer to Company s MD&A for computation. 9

10 RESULTS All In Sustaining Costs (1) US$/oz sold $1,400 $1,200 $1,000 G&A,Sustaining Capex and Other Total Cash Cost $918 AISC ( 23%) $800 $600 $ s AISC reflected a planned increase in Sustaining Capex to $150/oz focused on Segovia Operations average AISC is expected to below $950/oz continued focus on Segovia exploration, expansion and modernization adding technical studies and up to 10,000m of drilling at Marmato. (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. 10

11 RESULTS Segovia Operations 11

12 RESOURCES Updated Mineral Resource: Completed effective June 16, Changing focus of the mining style from open pit to underground mining. Increase in 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 has resulted in reduced tonnages but higher grades. Additional Deeps Zone mineralization included for the first time within the Inferred category. Marmato Underground 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. 12

13 RESULTS All In Sustaining Costs Centerra Gold Barrick Gold Kirkland Lake Gold Goldcorp Guyana Goldfields New Gold Yamana Gold Gran Colombia Gold Argonaut Gold Alamos Gold Kin Ross Gold TAHOE Resources IamGold Alio Gold Detour Gold $0 $200 $400 $600 $800 $1,000 $1,200 US$/oz sold Cash AISC Gran Colombia s AISC continues to be well positioned amongst industry peers. (1) Source: Issuer filings for 2017 (2) AISC is a common performance measure but does not have any standardized meaning within the industry and therefore its computations may vary between companies. 13

14 RESULTS Revenue/G&A (1) $40 $35 $30 $28 US$ $25 $20 $15 $10 $5 $0 Gran Colombia is well positioned amongst industry peers. In 2 years we have grown from $24 of Revenue for every $1 of G&A to $28 of Revenue per $1 of G&A. (1) Source: Issuer filings for the year ended December 31,

15 RESULTS Adjusted EBITDA (1) $80 $75.5M US$M $60 $40 $20 $ s Adjusted EBITDA of $75.5M increased by 14% over 2016 and has doubled since Increase in EBITDA driven by production growth, improved gold prices and relatively stable total cash costs. (1) Refer to Company s MD&A for computation. 15

16 RESULTS Excess Cash Flow (1) Adjusted EBITDA Capex $75.5M $66.0M Income taxes paid Interest paid 2017 vs Other obligations Equity/wealth taxes Debt restructuring costs Working capital Excess Cash Flow (1) $2.9M $16.5M US$M Of the total $19.4M Excess Cash Flow generated the last 2 years, $7.5M was used to reduce debt through NCIBs and a partial redemption..the remaining $11.9M remains in the Sinking Funds (1) As defined in the Indentures (available on the Company s web site) for the 2018 and 2020/2024 Debentures. 16

17 RESULTS Balance Sheet December 2017 December 2016 Adjusted working capital deficit * Cash $3.3M $2.8M Accounts receivable $14.4M $11.4M Accounts payable and accrued liabilities ($18.8M) ($16.6M) Income taxes payable ($8.4M) ($6.1M) Mining titles and compensation agreements payable ($11.0M) ($11.0M) Inventories and other items, net $10.9M $9.2M ($9.6M) ($10.3M) Total short and long term debt Local debt, net of cash in trust $0.4M $1.4M 2018 Debentures ** $45.2M $49.7M 2020 Debentures ** $48.7M $101.2M 2024 Debentures** $47.0M N/A Sinking funds for 2018, 2020 and 2024 Debentures $11.9M $0.5M * Excludes current portion of short and long term debt ** Aggregate principal amounts issued and outstanding 17

18 CAPITAL STRUCTURE TSX Symbol Exercise Price Issued & Outstanding Fully Diluted Shares Common shares GCM 23.7M 23.7M 2018 Debentures (1) GCM.DB.U US$1.95 $44.0M 22.6M 2020 Debentures (1) GCM.DB.V US$1.95 $48.0M 24.6M 2024 Debentures (1) GCM.DB.X US$1.95 $43.3M 22.2M 93.1M Warrants GCM.WT.A CA$ M Options CA$ M Proposed Refinancing of 2020 and 2024 Debentures Best efforts private placement of up to $95M senior secured gold linked notes Six year term, 8.25% coupon paid monthly Upside return through gold price participation on quarterly repayments with $1,250/oz floor Physical gold set aside in a Gold Trust Account to fund quarterly repayments Each $1,000 Unit includes 124 Warrants at CA$2.21 per share Offer to 2018 Debenture Holders to settle early Will receive $190 cash and 415 shares for each $1,000 of principal (1) Amounts shown for the Senior Debentures are at Face Value. 18

19 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 (PEA) and up to 10,000m drilling program at Marmato Targets 2017 Actual 2018 Guidance Gold production 173,821 ozs 182, ,000 ozs Cash cost/oz sold $720 < $735/oz AISC/oz sold $918 < $950/ oz 19

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