Gran Colombia Gold 2Q 2019 Net Income Improves Year-on-Year
Toronto, Canada-based Gran Colombia Gold (GCC) – operator of Colombia’s largest underground gold-mine in Antioquia – on August 14 reported second quarter (2Q) 2019 adjusted net income of US$14 million, up from US$8.2 million in 2Q 2018.
Meanwhile, for the first half (1H) 2019, adjusted net income rose to US$27 million, up from US$18.1 million in 1H 2018.
“Improved earnings in the second quarter and first half of 2019 compared with the corresponding periods last year continued to reflect the significant contribution of Segovia [Antioquia] operating performance in 2019 on revenues, total cash costs per ounce, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and income from operations,” according to GCC.
“With the recent run up in gold prices, well above the average for the first half of this year, our second half earnings, cash flows and cash balance are poised to benefit from our leverage to gold prices,” added GCC CEO Lombardo Paredes.
“We’ve continued to improve our liquidity in the second quarter, bolstering our mid-year cash position to US$51.3 million, including the net proceeds of the convertible debentures financing completed in April.
“The recently announced high-grade results from our drilling program at Segovia in the first half of 2019, and the work we are doing to identify and prioritize step out and brownfield drilling targets, increase our confidence in the potential to add mineral reserves and extend mine life at our flagship operation.”
GCC raised its annual gold production guidance for 2019 to a range of between 225,000 and 240,000 ounces. Total gold production of 57,882 ounces in the second quarter of 2019, up 9% over the second quarter last year brought the total for the first half of 2019 to 118,483 ounces, up 12% over the first half last year.
“With another 18,166 ounces produced in July, the company’s trailing 12-months’ gold production at the end of July 2019 now stands at 229,776 ounces, up 5% over 2018’s annual production,” according to GCC.
“Despite a 1% year-over-year decline in spot gold prices to an average of $1,307 per ounce in the first half of 2019, the company reported a $6 per ounce improvement in realized gold prices to an average of $1,296 per ounce in the first half this year.
“This was the result of lower charges in a new refining contract that the company entered into in January 2019 with an international refinery, saving approximately $20 per ounce sold compared with its previous arrangement.
“With the ‘London P.M. Fix’ gold price ranging from a low of $1,390 per ounce to a high of $1,506 per ounce thus far in the third quarter, the company expects to see a significant increase in revenue and operating cash flow in the second half of 2019 compared with the first half of 2019 if spot gold prices remain at the current level.”
Total cash costs per ounce came-in at $655 per ounce in 2Q 2019, down from $696 per ounce in the 2Q 2018, bringing the average for the first half of 2019 to $638 per ounce, down from $683 per ounce in the first half last year.
Adjusted EBITDA rose 25% year-on-year to US$33.2 million, bringing the total for the first half of 2019 to $68.5 million, up 27% over the first half last year.