Gran Colombia Gold 2Q 2021 Net Income Improves Year-on-Year

Toronto-based gold miner Gran Colombia Gold (GCG) announced August 12 that its second quarter (2Q) 2021 net income climbed to US$29.8 million, a reversal from a US$18.6 million net loss in 2Q 2020.

The reversal “reflects a $9.2 million improvement in income from operations and a gain on financial instruments of $1.5 million in the second quarter of 2021 compared with a loss on financial instruments of $35.4 million in the second quarter of 2020,” according to GCC.

As for first half (1H) 2021, net income soared to US$148.1 million compared with $5.7 million in 1H 2020.

The 1H 2021 gains reflect both operational improvements as well as a “$56.9 million gain on loss of control of Aris Gold, a $44.3 million gain on financial instruments (compared with a $18.9 million loss on financial instruments in the frst half last year) and the $8.9 million gain on sale of the Zancudo Project,” according to GCC.

“Gran Colombia has completed a major step forward in its strategy to grow through diversification, completing an acquisition on June 4, 2021 of all the shares of Gold X Mining Corp. that it did not already own, and then closing a $300 million offering on August 9, 2021 of 6.875% Senior Unsecured Notes due 2026 to fund the development of the Toroparu Project in Guyana, to prepay the remaining $18 million balance of its Gold Notes and for general corporate purposes,” the company added.

“The company added a 27% equity interest in Denarius Silver Corp. to its portfolio in the first half of 2021, giving it exposure to the Lomero-Poyatos polymetallic deposit located in Spain, in close proximity to the Matsa JV project in the Iberian Pyrite Belt, and to the Guia Antigua and Zancudo Projects in Colombia.

“In February 2021, Gran Colombia also successfully brought its spin out of the Marmato [Colombia] Mining Assets to a conclusion, one in which the company has a continuing equity ownership of 44% in Aris Gold Corporation. The Marmato operating and financial results are only consolidated up to February 4, 2021 and thereafter the company equity accounts for its investment in Aris.”

GCC’s gold production from its core Segovia, Antioquia operations totaled 52,198 ounces in the 2Q 2021, up from with 44,377 ounces in 2Q 2020. Total gold production from Segovia in 1H 2021 amounted to 101,256 ounces, compared with 94,723 ounces in 1H 2020.

“The company remains on track with its annual production guidance of 200,000 to 220,000 ounces of gold from Segovia in 2021,” GCC added.

Consolidated revenue in 2Q 2021 rose to $96.4 million, from $77 million in 2Q 2020, while 1H 2021 revenues rose to $198.3 million, up from $178.1 million in 1H 2020.

“The year-over-year increase in revenue largely reflects an increase in the company’s realized gold price, which averaged US$1,805 per ounce sold in the first half of 2021 compared with an average of $1,622 per ounce sold in the first half last year,” according to GCC.

“At the Segovia operations, total cash costs averaged $767 per ounce in the second quarter of 2021, compared with $654 per ounce in the second quarter of 2020, bringing the average for the first half of 2021 to $796 per ounce compared with $625 per ounce in the first half last year.

“The year-over-year increase in Segovia’s total cash cost per ounce in the second quarter and first half of 2021 reflect an increase in contractor and artisanal mining payment rates (which had not changed since 2017) implemented in the third quarter of 2020 in response to the current gold market conditions; higher spot gold prices which increased production taxes on a per ounce basis; and additional costs to maintain the necessary Covid-19 protocols required to protect the health and safety of Segovia’s workers and the local communities,” GCC added.