Gran Colombia Gold Posts Full-Year 2019 Net Loss on Marmato Write-Down

Toronto-based Gran Colombia Gold – Colombia’s biggest gold miner, principally in Antioquia – on March 30 reported a full-year 2019 net loss of US$131 million, far worse than the US$3.4 million net loss in 2018 — all because of a one-time accounting write-down.

The loss was the result of an after-tax charge of US$153.6 million “associated with the company’s exploration and evaluation assets in Zona Alta and Echandia at the Marmato project” in Colombia, according to Gran Colombia.

Fourth-quarter (4Q) 2019 net loss was US$148.8 million compared with net income of US$8 million in 4Q 2018, all because of the Marmato write-down.

However, if excluding the Marmato write-down, then adjusted net income for 4Q 2019 actually rose to US$17.1 million, up from $14.5 million in 4Q 2018.

For full-year 2019, adjusted net income rose to US$60.5 million, up from US$42.5 million in 2018.

“The year-over-year increase in 2019’s adjusted net income largely reflects the positive impact of Segovia [Antioquia] production growth, the increase in realized gold prices and the reduction in total cash costs per ounce sold on income from operations in 2019, net of an associated increase in income tax expense,” according to the company.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose to US$146 million for full-year 2019, up from US$102 million in 2018, while 4Q 2019 adjusted EBITDA rose to US$40 million, from US$23 million in 4Q 2018, according to the company.

Commenting on the results, Gran Colombia Gold executive chairman Serafino Iacono stated: “We had a very solid year in 2019 with record production and new highs for revenue, adjusted EBITDA, free cash flow and adjusted earnings that helped us to significantly strengthen our balance sheet.”

Gold production in 4Q 2019 rose 18% year-on-year, to 65,237 ounces, while total annual production for 2019 rose 10% year-on-year, to 239,991 ounces — both all-time records.

Revenues in 4Q 2019 rose 30% year-on-year, to US$88.5 million, “getting a boost from the 21% increase in spot gold prices. For 2019, production growth, the higher spot gold and silver prices and the reduction in refining charges all combined to increase annual revenue to $326.5 million, up 22% over last year,” the company added.

Total cash costs per ounce averaged US$685 per ounce in 4Q 2019 compared to US$698 per ounce in 4Q 2018, “reflecting a reduction in Segovia’s total cash cost to $607 per ounce in 4Q 2019 from $623 per ounce in 4Q of last year. In 2019, the company’s total cash costs decreased to $661 per ounce from $680 per ounce in 2018,” Gran Colombia added.