GCM Mining (nee Gran Colombia Gold) 1Q 2022 Profits Decline Year-on-Year

Toronto-based GCM Mining announced May 12 that its first quarter (1Q) 2022 adjusted net income fell to US$14.8 million, from US$21.9 million in 1Q 2021.

“Net earnings in the first quarter 2021 included the benefit of a US$56.9 million gain on loss of control of Aris, a US$42.8 million gain on financial instruments and a US$8.9 million gain on sale of the Zancudo Project, offset partially by US$9.8 million of transaction costs incurred by Aris in connection with the loss of control in early 2021,” according to GCM, formerly known as Gran Colombia Gold.

The 1Q 2022 adjusted results also reflect a US$4 million decrease in income from operations together with a $2.5 million increase in finance costs and an increase in income tax expense due to the tax rate increase in Colombia effective in 2022,” according to the company.

Commenting on the results, GCM CEO Lombardo Paredes stated: “We have started-off 2022 on a positive note, meeting our expectations for production, costs and cash flow in the first quarter.

“We are on track to once again meet our annual production guidance for 2022. Following the favorable mineral reserve and resource update at Segovia [Antioquia], our exploration and mine geology teams have continued to execute the ongoing drilling campaigns at our four producing mines and the brownfield areas in our mining title.

“At our Toroparu Project in Guyana, we are advancing the infill drilling and the pre-construction activities. We are on track to finalize the prefeasibility study in the third quarter of 2022, at which point formal construction of the project is expected to commence.”

GCM’s 1Q 2022 gold production from its Segovia operations totaled 49,951 ounces, up 2% over 1Q 2021, and the company expects annual production this year at between 210,000 and 225,000 ounces of gold.

Meanwhile, GCM’s new polymetallic recovery plant constructed in 2021 at Segovia produced approximately 252,000 pounds of payable zinc and 338,000 pounds of payable lead during 1Q 2022, according to the company.

Consolidated revenue, “all of which was sourced from the Segovia operations in the first quarter of 2022, amounted to US$101.3 million compared with $101.9 million in the first quarter last year, which included $5.1 million from Aris Gold Corporation — prior to the loss of control of Aris on February 4, 2021,” according to GCM.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for 1Q 2022 dipped slightly year-on-year, to US$45.2 million, from US$46.3 million in 1Q 2021, according to the company.

“GCM Mining’s balance sheet remained strong with a cash position of US$315.1 million at March 31, 2022,” according to the company.

“The company also has US$138 million of funding available for construction of its Toroparu Project in Guyana through a precious metals stream facility with Wheaton Precious Metals (Caymans) Ltd. Other than scheduled interest payments, the company has no maturities of its long-term debt in the next 12 months,” the company added.