Mineros 3Q 2017 Profits Rise 7.46% Year-on-Year; Gran Colombia, Red Eagle Post Losses

Medellin-based gold mining giant Mineros SA reported November 14 that its consolidated third quarter (3Q) 2017 operating income rose 14% year-on-year, to COP$589 billion (US$195 million), while net income rose 7.46%, to COP$91 billion (US$30 million).

In its mainly alluvial mining operations in Colombia, Mineros SA’s net income rose a slight 0.7% year-on-year, to COP$93 billion (US$30.8 million), while operating income dipped 0.1%, to COP$290 billion (US$96 million).

Colombian mining operations saw a 0.1% dip in production, combined with a 3.5% decline in the price of gold as measured in Colombian pesos, the company noted.

Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) rose 9% year-on-year in the latest quarter, to COP$193 billion (US$64 million).

In the “Hemco” division in Nicaragua, net income rose 174% year-on-year, to US$11 million, while operating income rose 38%, to US$101 million.

The Nicaragua division saw production rise 33% year-on-year, but EBITDA margin was better in Colombia, at 47%, versus 23% in Nicaragua.

Gran Colombia Gold Results

Meanwhile, Toronto-based Gran Colombia Gold on November 13 posted a US$1 million net loss for 3Q 2017, down from a net profit of US$8.1 million in 3Q 2016

Commenting on the report, Gran Colombia CEO Lombardo Paredes Arenas pointed out that the 42-days-long miners’ strike in Segovia, Antioquia, cut gold output 5% year-on-year.

Despite the strike, “we demonstrated our resiliency once operations returned to normal in early September, rebounding with two of our best production months this year,” Paredes said.

“We have since signed some new contracts with small mining cooperatives in Segovia and negotiations are continuing with the rest. We now believe our 2017 gold production will total between 165,000 to 170,000 ounces.”

However, year-to-date gold production of 122,122 ounces is up 12% over the first nine months of 2016, he added.

Revenue so-far this year is up 8% year-on-year thanks to higher gold production, worth US$144.4 million. However, output disruption during the strike, combined with a 4% decline in world gold prices, contributed to a 17% year-over-year decline in 3Q 2017 revenue to US$42.7 million.

“With Segovia’s operations back to normal and spot gold prices in October and the first half of November generally above $1,270 per ounce, Gran Colombia is expecting stronger revenue performance in the fourth quarter of 2017,” according to the company.

Gran Colombia’s 3Q 2017 total cash costs averaged US$748 per ounce, while its all-in sustaining costs (AISC) averaged $970 per ounce, “reflecting the adverse impact of the reduced level of production on fixed costs and capital spending on a per-ounce basis,” according to the company.

Red Eagle Results

Meanwhile, Vancouver, Canada-based Red Eagle Mining – developer of gold-mining operations in Antioquia, Colombia — reported November 15 a US$5 million net loss for third quarter (3Q) 2017, down from a US$568,000 net loss in 3Q 2016.

Net losses so far this year total US$11.9 million, compared to a net loss of US$1.2 million for the first nine months of 2016, according to the company.

“The net loss increased compared to the 2016 period primarily due to increased expenses associated with the ramp-up of the San Ramon gold mine and mill during the 2017 period, which also resulted in the increased values of total assets and shareholders’ equity,” according to the company.

“Underground development at the San Ramon gold mine continues to advance according to plan with 1,756 meters completed in the third quarter, 438 meters in October and 4,493 meters completed year-to-date.

“Stope mining operations resumed in October with 4,373 tonnes at 6.09 grams per tonne gold mined and stockpiled. Prior to the anticipated mill start-up in January 2018, Red Eagle Mining expects to have stockpiled 21,000 tonnes of ore.

“Upon completion, the additional development, infill drilling and back fill system will allow consistent production resulting in an estimated 50,000 ounces of gold produced during 2018,” according to the company.