Gran Colombia Gold 2015 EBITDA Improves; Gold-Price Drop Causes Net Loss

Canada-based Gran Colombia Gold (GCG) announced March 30 that its full-year 2015 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose to US$38.4 million, from US$10.8 million in 2014.

However, the company posted an adjusted net loss of $1.1 million in 2015, compared to an adjusted net loss of $17.9 million in 2014.

GCG operates gold mines at Segovia (Antioquia) and Marmato (Caldas).

Thanks to a recent restructuring of its “senior secured gold-linked notes due October 2017″ and “senior unsecured silver-linked notes due August 2018,” the company has emerged from default status and has been “improving its liquidity as it continues with its mine plan implementation at the Segovia operations,” according to GCG.

“Improved production together with the significant reduction in total cash costs and G&A [general and administrative] expenses increased adjusted EBITDA to $10.0 million in the fourth quarter of 2015 compared with $5.6 million in the fourth quarter last year,” according to the company.

“Total gold production in the fourth quarter of 2015 was 30,050 ounces, bringing the total gold production for the year to 116,857 ounces, within the company’s production guidance for 2015 and up 18% over 2014, driven by a 25% increase in Segovia’s production to 92,894 ounces this year.

“As previously announced, Segovia’s mining operations were disrupted in October and November last year by external security challenges, lowering its fourth quarter 2015 gold production to 23,868 ounces. The situation has since improved and operations have returned to normal.

“The cost reductions achieved in 2015 were driven by the impact of the devaluation of the Colombian peso, improved production reducing fixed costs on a per ounce basis and cost savings achieved through a contract amendment with the primary contract miner at Segovia in the first quarter of 2015,” according to GCC.

“Like many of its peers, the company lowered its long-term gold price estimates in its 2015 annual review of the carrying values of its cash generating units to $1,200 per ounce from $1,300 per ounce used in last year’s annual review.”

Police Capture Gangsters Threatening GCG

Meanwhile, Colombia’s National Police reported March 30 that they had captured 10 members of the violent “Urabeños” gang (responsible for several recent murders of miners in Segovia) for distributing flyers that threaten GCG-affiliated miners.

According to a report from El Colombiano newspaper, the flyers claim that GCG-affiliated miners receive “miserable” salaries for their contract work, a claim that GCG rejected.