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Gran Columbia (GCM.t) : 200,000 oz/yr Gold miner

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Gran Colombia Adapts Previously Proposed Debt Financing

in Response to Investor Feedback With Focus on Refinancing Its Senior Secured Convertible Debentures Due 2020 and 2024 and Providing Option for Immediate Liquidity on 2018 Debentures

March 22, 2018

TORONTO, March 22, 2018 (GLOBE NEWSWIRE) -- Gran Colombia Gold Corp. (the “Company” or “Gran Colombia”) (TSX:GCM) announced today that, in response to feedback from current and potential new investors, it is adapting the previously announced proposed debt financing to focus solely on refinancing its Senior Secured Convertible Debentures due 2020 and 2024 (collectively, the “Senior Debentures”) through a private placement led solely by GMP Capital Inc. (“GMP”) of up to 95,000 units (the “Units”) of the Company for anticipated aggregate gross proceeds of up to US$95,000,000 (the “Revised Offering”). The Revised Offering is being made on a best efforts basis and is subject to market conditions, necessary approvals and consents, including TSX and shareholder approvals and consent from holders of the Senior Unsecured Convertible Debentures due August 2018 (the “2018 Debentures”) as described in further detail below, and there can be no assurance that it will be completed.

As of March 20, 2018, the aggregate principal amounts of the 2020 and 2024 Debentures issued and outstanding were US$48.0 million and US$43.4 million, respectively, and the Company had 23.6 million common shares (the “Common Shares”) issued and outstanding.

2020 : 6% : US$48.0 million :
2024 : 8% : US$43.4 million :
Total : == : US$91.4 million :

Target = : US$95.0 million x 124 wts/ $1,000 @c$2.21

If exercised : 11.78 Million shares x C$2.21 = C$26mn Cash

2017 : 1% : US$45.97 million - at 9/30/2017
Conv.Est-: ( US$ 6.14 million): 3/2018; based on 3.15M sh.rise
2018 : 1% : US$39.83 million - at March 2018

x 19% : ----- US $ 7.57 million : CASH to be paid out
x 81% : ----- US $32.26 million / $1.95 = 16.54 Mn shs

Serafino Iacono, Executive Co-Chairman of Gran Colombia commented, “We have been encouraged by the amount of interest received in the private placement process to-date. Investors have focused positively on the turnaround we have completed over the last two years and on the blue sky potential of our high-grade Segovia Operations, reiterating the need for Gran Colombia to maintain an aggressive exploration program to add reserves and resources for future development and exploitation. Investors have also noted our improved cash flow generation since the debt restructuring in early 2016 and the strides we have made since then to reduce the level of debt on our balance sheet. With maturity of the 2018 Debentures just five months away, current and potential new investors interested in participating in the previously proposed private placement have indicated a strong preference to keep a tighter level of debt on the Company’s balance sheet and not to extend the security for the senior debt to include a refinancing of the 2018 Debentures. As a result, the Revised Offering will focus solely on refinancing the Senior Debentures. Concurrently with the 2018 Debentures’ consent solicitation process, we are making an offer to the holders of the 2018 Debentures to allow them to convert their debt now into a combination of cash and shares rather than waiting until August. If we get the requisite consent being requested from the 2018 Debenture holders, those holders who elect not to convert their debt now will benefit from an increase in the annual interest rate from 1% to 5% from the closing of the Revised Offering to the maturity date of the 2018 Debentures. Under the Revised Offering, Gran Colombia will have improved liquidity with a lower debt/EBITDA ratio and improved free cash flow resulting from lower debt service costs compared with the previous debt financing proposal. Upon completion, the Revised Offering will maintain our objective of significantly reducing the potential dilution to shareholders compared with the current capital structure.”
       
The key terms of the Revised Offering include:

  1. Each Unit will consist of US$1,000 principal amount of senior secured gold-linked notes (the “Notes”) and 124 Common Share purchase warrants (the “Warrants”) of the Company. Each Warrant will have an exercise price of CA$2.21 per warrant and will entitle the holder thereof to purchase one Common Share at any time prior to the maturity of the Notes. It is a condition to closing the Revised Offering that the Notes and the Warrants are conditionally approved for listing on the TSX.
  2. The net proceeds of the Revised Offering will be used for the redemption in full, at par, of the Company’s Senior Debentures and for general corporate purposes.
  3. The Notes will have a six-year term and are non-callable for the first three years.
  4. The Notes will represent senior secured obligations of the Company, ranking pari passu with all present and future senior indebtedness and senior to all present and future subordinated indebtedness of the Company.
  5. The Notes will bear interest at 8.25% per annum, paid monthly.
  6. The Company will set aside an amount of physical gold each month in a trust account (the “Gold Trust Account”). On a quarterly basis, the physical gold in the Gold Trust Account will be sold and the sale proceeds will be used to amortize the principal amount of the Notes based on a guaranteed floor price of $1,250 per ounce. The scheduled annual number of physical gold ounces to be deposited into the Gold Trust Account will vary by year, representing approximately 10% of the projected annual gold production from the Company’s Segovia Operations and ranging from 15,000 ounces in the first year down to 10,000 ounces in the final year of the term of the Notes.
  7. There is no mandatory redemption of the Notes prior to maturity, although the Company may be required to make an offer to repurchase the Notes if there is a change of control or following certain asset sale transactions.
  8. The Notes will include standard high yield covenants consistent with transactions of this nature, including standard high yield optional redemption provisions.
  9. Closing of the Revised Offering will take place following receipt of shareholders’ approval for issuance of the Warrants at a special meeting of the shareholders as discussed below and receipt of consent from the holders of the 2018 Debentures as discussed below.

> http://www.grancolombiagold.com/news-and-investors/press-releases/press-release-details/2018/Gran-Colombia-Adapts-Previously-Proposed-Debt-Financing-in-Response-to-Investor-Feedback-With-Focus-on-Refinancing-Its-Senior-Secured-Convertible-Debentures-Due-2020-and-2024-and-Providing-Option-for-Immediate-Liquidity-on-2018-Debentures/default.aspx

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FULLY Diluted - with Cv. Debt Conversions... : 987d-MA

f2NrvSC.gif

9/30/2017 : 20.45 million common shares
Equity 9/17 : $ 229.32 million
Add cv. (3.15mn shs x$1.95): $ 6.14 mn = $ 235.46 million

Book Value : $235.46 mn / 23.60 mn = US$9.98/share ( 3/18)
 + + +
2018 Debs. : $ 32.26 mn / 16.54 mn = US$1.95/share ( 8/18)
= Bk.Value : $267.72 mn / 40.14 mn = US$6.67/share ( 8/18)
 + + +
New Debs.  : $ 20.03*mn / 11.78 mn = US$1.70/share: wt.C$2.21/1.30*= US$
= Bk.Value : $287.75 mn / 51.92 mn = US$5.54/share x1.30= C$7.20
Vs.Cv Debt : $ 95.00 mn @ 8.25%
 -versus-  
Old Debs.  : $ 95.00*mn / 48.72 mn = US$1.95/share:
= Bk.Value : $362.72 mn / 88.86 mn = US$4.08/share x1.30= C$5.30
All Debt Cv:
=========

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FULLY Diluted - with Cv. Debt Conversions... : 987d-MA

f2NrvSC.gif

9/30/2017 : 20.45 million common shares
Equity 9/17 : $ 229.32 million
Add cv. (3.15mn shs x$1.95): $ 6.14 mn = $ 235.46 million

Book Value : $235.46 mn / 23.60 mn = US$9.98/share ( 3/18)
 + + +
2018 Debs. : $ 32.26 mn / 16.54 mn = US$1.95/share ( 8/18)
= Bk.Value : $267.72 mn / 40.14 mn = US$6.67/share ( 8/18)
 + + +
New Debs.  : $ 20.03*mn / 11.78 mn = US$1.70/share: wt.C$2.21/1.30*= US$
= Bk.Value : $287.75 mn / 51.92 mn = US$5.54/share x1.30= C$7.20
Vs.Cv Debt : $ 95.00 mn @ 8.25%
 -versus-  
Old Debs.  : $ 95.00*mn / 48.72 mn = US$1.95/share:
= Bk.Value : $362.72 mn / 88.86 mn = US$4.08/share x1.30= C$5.30
All Debt Cv:
=========

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GOLD Resources : 30-60 Years of Current Production (!?)

(Marmato, Oct. 2017):
Indicated Resources consist of 41.0 million tonnes at an average grade of 2.9 g/t representing 3.9 million ounces of gold and Inferred Resources are 52.0 million tonnes at an average grade of 2.5 g/t representing 4.2 million ounces of gold.
(Segovia, Dec, 2017):
Segovia Operations, leading to an updated Mineral Resource estimate as of December 31, 2017 with 3.4 million tonnes at an average grade of 11.4 g/t representing 1.2 million ounces of gold in Measured and Indicated Resources, an increase of 13% from the March 2017 Mineral Resource Estimate. Inferred Resources include 3.4 million tonnes at an average grade of 10.1 g/t representing 1.1 million ounces of gold, also up 13%. The Company also reported its first Mineral Reserve for Segovia with a total of 1.7 million tonnes at an average grade of 12.4 g/t representing 660,000 ounces of gold as of December 31, 2017.

Type Res: Marmato + Segovia= Total-Oz/174k oz: 50M.shs
Indicated:  3.9 Mn  +  1.2 Mn =  5.1 Mn = 29.3 yrs : 0.10 oz
Inferred- :  4.2 Mn  +  1.1 Mn =  5.3 Mn = 30.5 yrs : 0.11 oz
 = SUM-  :  8.1 Mn  +  2.3 Mn = 10.4 Mn= 59.8 yrs : 0.21 oz

PRODUCTION:  and latest Quarter's Results (> Q4.2017)
July : 10,187e
Aug. : 10,188e
Sep. : 16,664* 16,664 - see below
Oct. : 16,996 :
Nov. : 15,841 : 13,797 + 2,044
Dec. : 18,862 :
'17 : 173,821 : 14,485 :

14,485 :
Mo.  : Production, chg : Segovia : Marmato :
Jan. : 16,700 ------------ : 13,613 + 2,087 :
Feb. : 17,339 +3.83% : 15,248 + 2,091 :
Mar : 18,633 +7.46% : 16,611 + 2,022 / 187,485 > Trailing 12mos:
Q1 - : 52,672 ( +35%) :
====
Q1est 52.6k Est.aNetInc. (x132=$6.9M > x176=$9.3M) x150=$7.89M/ 50M= $0.158/sh. x4=$0.63 x1.28= C$0.81:

C$2.40 = C$0.81: PE: 2.96 Est
====

Qtr- : GoldOz : Mo.Ave: Revenues : per-Oz : CCost, AISC : Net-, All-in : aEbitda /perOz : aNetInc: ExcCF : Earns : ANI/Oz. :
'15 : 116,857 : 09,738 : $134.95M : $1,155 : ------------------ : ----------------- : $38.4M / $329 : (49.3M) 00.0M : (13.1M):
Q4 - : 40,879 : 13,626 : $  50.40M : $1,233 : $725, $899 : $508, $334 : $16.4M / $401 : $03.4M: 00.0M : $
'16 : 149,708 : 12,476 : $185.07M : $1,236 : $706, $850 : $530, $386 : $66.0M / $441 : $15.6M: 02.9M : $03.7M: $104/oz :
Q1 - : 39,008 : 13,003 :
Q2 - : 46,075 : 15,358 :
Q3 - : 37,039 : 12,346 :
Q4 - : 51,699 : 17,233 : $  70.90M : $1,371 : $719, $899 : $508, $334 : $26.8M / $518 : $09.1M: 08.6M : $04.9M: $176/oz :
'17 : 173,821 : 14,485 : $215.40M : $1,239 : $720, $918 : $519, $321 : $75.5M / $434 : $23.0M: 16.4M : $36.8M: $132/oz :
Qtr- : GoldOz : Mo.Ave    : Revenues : per-Oz :   CCost, AISC : Net-, All-in : aEbitda /perOz : aNetInc : ExcCF : Earns   : ANI/Oz. :
====

BkVal: US$224.36M / 20.866M shs = US$10.75 / By 3.27.18: +2.806Mn (2018,20,24 debs) = 23.672M shs
March 27, 2018:
2018 : 43,985k / $1.95 = 22,557k : 81%: 18,271k shs + 19% cash: $8,357k
2020 : 48,023k / $1.95 = 24,627k
2024 : 43,331k / $1.95 = 22,221k
Sum: 135,339k / =====  69,405k shs fully conv

Adjusted to 3.27.18:
BkVal: $224.36k (+2.806M x$1.95) = $229.83k / 23.672M = US$9.71 x 1.277 = C$12.40
If ALL 1% debs are converted:
BkVal: $229.83k (+22.557M x$1.95) = $273.82k / (23.672M +22.557M =  46.229M) = US$5.92 : C$7.56

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GCM - etc .... update : 12mos : 10d :

image.png

(in edit - another comparison):

GCM - vs. GDXJ, RRS.L, UGL ... update

vKimSLZ.gif

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INCOME SENSITIVITY to Production (in Ounces)

======= :  - 2016- :  - 2017 - //  Q1'2017- : Q4'2017- :  Q1'2018-  :
Prod.Oz :  149,708  : 173,821  // 39,008oz :  51,699oz :  52,672oz :
Revenues $185.1M : $215.4M // $ 45.7 M : $ 70.9 Mn : $ 67.4 Est.
Revs/Oz: $1,236oz : $1,239oz // $1172oz : $1371/oz : $1280Est (=$121.3x10.55)
EBITDA :  $ 66.0 M : $ 75.5 M // $ 13.6 Mn : $ 26.8 Mn : $ 26.3 Est :
EB-/Oz. :  $ 441/oz : $ 434/oz // $ 349/oz  :  $ 518/oz : $  500/Est
FinlChg. : $ 32.8 M : $ 32.2 M //  $ 7.88 M :  $ 8.37 Mn : $8.00 Est
Eb-Fin'l.  : $ 33.2M  : $ 43.3 M //  $ 5.72 M :  $ 18.4 Mn : $ 18.3 Mn :
Adj.NetI : $ 15.6 M : $ 22.9 M //  $ 3.10 M :  $ 11.0 Mn : $ 10.0 Mn :
aNI/Oz. : $ 104/oz : $ 132/oz  // $79.4/oz :  $ 213 /oz : $ 190/ Est
ExcessCF : $ 2.9M : $ 16.4 M  //   $ 2.3 M :   $8.60 Mn : $8.00 Est
===
----------------- Yr 2017 : Qtr3'17 : Qtr4'17 :
Revenues: $215.37 : $144.43 : $ 70.94 :
Fin'l.Chg-- : $32.311 : $23.938 : $8.373
AdjNetInc $22.900 : $11.000 : $11.900 :
/40M.shs: $0.57/sh: $0.28/sh: $0.30/sh:
ExcessCF : $16.400 : $ 7.800 : $ 8.600

Financial Charges : $32.3 Million in 2017 > High because Discount on debt is being charged

Debs- rt : YrEnd2016: YrEnd2017: x Rate-- : SinkFd : Effect: Book2017 : Diff'E17 : 2017 Chgs.
2018-1%: $049,744k : $45,160K : $0,452k : $ 4.3M: 47.9% : $33,913M : $11,247 : $20.0 M Est
2020-6%: $101,160k : $48,696K : $2,922k : $ 7.6M: 22.7% : $34,883M : $13,813 : $10.0 M Est
2024-8%: $000,000k : $46,955K : $3,756k : $ 0.0M: 15.5% : $29,967M : $16,988 : $  2.3 M Est
=============================
>TOTAL : $150,904k :$140,811K : $7,130k: $11.9M: 23.0%: $98,713M : $42,048 : $32.3 M Est


Fin'l Chgs - Estimate for 2018
Debs-rt: YrE-2017 : x Rate- : SinkFd : Effect: Diff'E17 : Qtr-1 : Qtr-2 : Qtr-3 : Qtr-4 = 2018
2018-1%: $45,160K : $0,452k : $ 4.3M: 47.9% : $11,247 : $4.0 M : $4.0M : $2.5M : $0.0M = $10.5M Est
2020-6%: $48,696K : $2,922k : $ 7.6M: 22.7% : $13,813 : $2.5 M : $2.5M : $2.5M : $2.5M = $10.0M Est
2024-8%: $46,955K : $3,756k : $ 0.0M: 15.5% : $16,988 : $1.7 M : $1.7M : $1.8M : $1.8M = $07.0M Est
====================================
Total-: $140,811K : $7,130k : $11.9M: 00.0% : $42,048 : $8.2 M : $8.2M : $6.8M : $4.3M = $27.5M Est
--------------------------------------------------------------------- Actual'18 >  ????????
------------ EPS "kick" vs.$8.2 assuming 40mn shs OS'18 >  $0.00  :  $0.00 :  0.035 :  0.098 = $0.133

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Great article on THE TURNAROUND at GCM, from last year

INVESTIGATION: The Turnaround at Gran Colombia Gold

EXCERPTS

When Gran Colombia bought its producing Segovia gold mine [through the acquisition of Frontino Gold Mines] for about $200 million, the company found an entire town of illegal gold miners living underground in the formerly state-owned operation, located in the Department of Antioquia.

1cvme3k-gcm1.jpgTop-of-the-market promise

At the time, GCM investors knew that illegal mining was a problem throughout Colombia, but they were willing to cut Gran Colombia some slack given the lofty promises of its two historic mining districts: Segovia and Marmato.

The Segovia-Remedios mining district – a series of high-grade veins – has been mined for over 150 years and is estimated to have produced over 5 million ounces throughout its history.

The grades are remarkably high – between 9.9 and 19.1 grams per tonne contained in 1.1 million ounces of measured and indicated resources (2017 figures) – which caught the attention of GCM's early investors, including Frank Holmes, CEO of U.S. Global Investors. Holmes told CEO.ca it was the high grades that first prompted him to consider investing in the company. “They’re way above average grade. That was probably the biggest reason for it.”

Although Segovia would represent a reliable producing asset given its history, high grades, and the fact the Colombian government had been running it for 40 years, in the early days Gran Colombia was focused on Marmato, which it acquired in 2011 through a merger with Medoro, a former Iacono-run company that had consolidated the “mountain of gold” located in the heart of the Middle Cauca gold district in the Department of Caldas.

Marmato's mining history goes even further back than Segovia, to pre-Colonial times, when it was worked by the Quimbaya people. The Spanish colonists assumed control of the Marmato mines in 1527 and they have been in almost continuous production ever since. Local history recounts that Simon Bolivar, the revolutionary leader who liberated much of South America from Spanish rule, used the mines as collateral with British banks to secure funding for a war of independence against Spain.

The grades are lower than Segovia – between 2.8 and 4.7 g/t, but the M&I resource is impressive – a whopping 3.897 million gold ounces, as of the latest estimate. In 2011, Gran Colombia charted a course for building out Marmato, particularly unlocking its silver resources, and relocating the town of Marmato, population 10,000, to do it.  The idea was to build a large open-pit mine to exploit the low-grade ore, and the company completed 325,000 metres of drilling to delineate the resource, which made it to prefeasibility, along with $50 million spent on studying how to move the town to get at the ore body.

The company knew it would take a few years to execute its plan, but with gold and silver prices at all-time highs, it decided on a financial instrument that would give investors exposure to high gold and silver prices while they waited. In 2011, it offered 80,000 notes of the company at $1,000 apiece, for a raise of $80 million. The notes, due in 2018, would pay a 5% coupon and upon maturity investors would receive the dollar equivalent of 66.7 ounces of silver per note, or $1,000, whichever was higher.

“We feel this is a creative and innovative financial instrument that provides investors an attractive opportunity to benefit from the long-term cycle in silver prices and is a reflection of our view that precious metals prices will continue to increase in the long term,” Iacono said in the 2011 press release announcing the silver-linked notes.

Investors mopped them up, seemingly a no-lose investment, considering that silver was around $35 at the time. If that continued, in seven years they'd double their initial $1,000 payment per note, and get interest on it to boot.

Encouraged by the success of the silver notes, GCM did the same thing in 2012 with an offering of gold-linked notes, this time hoping to raise $120 million to expand gold production at Segovia, including a new 2,500 tonnes per day mill. In this offering, for every 1,000 units that investors bought, they received a 10% coupon and 250 warrants.

According to Holmes, the “double optionality” of the silver notes was a no-brainer.

. . .

Mike Davies, GCM's chief financial officer, recalls what happened in those black days of April 2013 when gold fell off the shelf - dropping over $200 in just two sessions.

Gold note holders that were up by $300 an ounce when gold was trading at $1700 – with a gold price-linked guaranteed payout of $1400 – found themselves holding an instrument that would only pay them the floor price, plus interest. For the company, it was much worse. Gran Colombia had to make up the difference between the $1400 floor price and the gold price, which in 2015 dropped to $1100 an ounce – a $300 gap.

Meanwhile the stock price was in free-fall, plummeting from $142.50 a share in December 2013 to around $2 at the end of 2015, as investors fled the equity, scared off by the uncertainty in gold and silver prices, the company's plans to develop an open-pit mine in a region over-run by illegal miners, cash costs nearing $1200 an once in 2013, and a board that seemed to have lost its direction.

“We were racing against perception that, with gold going down, we were going out of business,” said Davies. “We found ourselves behind the eight ball with two commodity-linked instruments that, economically, were just way off where the markets were, repayments facing in front of us, and we needed to restructure those.”

At the end of 2014, GCM went into default on both commodity-linked notes. The company took a break on paying interest for two months to re-group and by March 2015 resumed monthly interest payments on both debt instruments while it forged ahead to restructure its debt.

Led by GMP Securities out of Toronto, the debt restructure essentially resulted in either paying out the silver notes [renamed “2018 debentures”], or converting them into shares. If the share price is below US$1.95 (about CAD$2.40 at current exchange rates), Gran Colombia will pay bondholders 19% in cash – which it is saving for between now and next August – and the rest in shares.

The gold notes were renamed “2020 debentures”. In May 2017 Gran Colombia extended the maturity date of $47 million of the 2020 debentures by four years, to 2024.

Whatever excess cash Gran Colombia accumulated, would go towards paying out the 2020 bondholders, while the 2024 bondholders, including Iacono, Frank Holmes and other high-net-worth investors, would keep theirs another four years, enticed by an 8% interest rate.

Davies said the restructure had to satisfy the three sets of bondholders, which is why there are quirks in the arrangement such as the 19% cash payout in the silver notes.

. . .

The effect of the restructuring wasn't immediate. Even though Gran Colombia had several good quarters, some shareholders felt burnt after coming out of the restructuring, and hadn't seen any share price gains for their decision to stay with the company. The stock bumped along at between $1.20 and $1.50 for a year.

Davies said the company also had to contend with stock dilution due to the convertible note structure, and an arbitrage opportunity some bondholders took advantage of between the 2018 debentures and the common shares. That added another 200 million shares in 2016 to the 113 million GCM had at the end of restructuring.

“I think that played havoc with our stock through much of 2016,” said Davies, who noted that the problem has largely been corrected since the company did a 15-to-1 stock consolidation in April 2017 (one post-consolidation share for every 15 pre-consolidation shares). Gran Colombia now has about 20 million shares in the float. (see Table 2)

“In 2016 we were flat where everybody was starting to rise. This reflected things such as people still trying to get comfort in the story, regain confidence after coming out of a restructuring, and contending with the dilution overhang,” added Davies.

Focus on Segovia

The restructuring had the effect of re-positioning Gran Colombia on its key producing asset: Segovia. Large open-pit mines envisioned by the Marmato project were out of favour with investors. The company needed cash, and a way to regain shareholder confidence. The first step was to bring costs down at the Segovia operations. The Colombian government asked management not to slim down the labour force, which had thousands of workers when Gran Colombia took over the mine in 2010.

Both parties knew that making drastic cuts to its Segovia payroll would result in social turmoil in the impoverished region, so Gran Colombia came up with the idea of forming cooperatives. Composed of formerly illegal miners, the new mining co-ops would work in Gran Colombia's concessions and deliver ore to its mill for processing. After four years, nearly all the illegal miners are organized into co-ops; the only difference between them and the GCM workers is the colour of their coveralls. At Segovia the co-op miners bring an average 15 grams per tonne material, for which they receive $450 per ounce in payment.

“This has been one of the biggest misconceptions of the market. People that work in our mine are like any other contract miner that we hire. But because it's a Colombian contract miner, everybody thinks it's a bunch of camperos (campers). This is an organized operation,” said Iacono.

That $450 an ounce figure is key because before the restructuring the major contract mining company was being paid $600 an ounce. How did Gran Colombia sell that to the contract miners? The Colombian peso had fallen significantly in value against the dollar, meaning the co-op miner's costs also dropped.

“We negotiated a reduction that took them from $600 down to $450 an ounce. So $150 an ounce of savings on, like, 50, 60,000 ounces a year. It was a major cost savings,” Davies recalled.

General and administrative (G&A) expenses were also slashed, from around $20 million in 2011 to the current $6 million. Then there was the production. Increased output at Segovia – 75,000 ounces a year in 2014 to 125,000 oz in 2016 – helped drive down fixed costs on a per ounce basis, from close to $1300 an ounce in 2013 to $652 an ounce during the first half of this year. Total cash costs between Marmato (16% of gold sales) and Segovia (84%) in H1 averaged $709/oz.

1cvme52-1cvld1b-segovia1.jpg

The turnaround

While debt restructuring and cost control were undoubtedly two main factors behind Gran Colombia's turnaround over the past four years, another key component in regaining the confidence of investors was adding some new, technical people to the board, according to Frank Holmes.

“Serafino’s always working hard, he’s fixing this problem and that problem, but the board needed some independent technical people to support him. Fino won’t like me saying that but he knows it in his heart,” said Holmes.

For instance, the company brought on Mark Ashcroft, a senior mining executive with expertise in debt financing to lead its technical committee of the board and recruited Lombardo Paredes Arenas to become the new CEO. Holmes praised Lombardo as a competent operator, aided by his background in the Venezuelan oil business, including successfully building and running the $2.6 billion Cardon Refinery Conversion Project.

“What’s really good about the story is they had lots of pain, and they went through some positive restructuring and it showed up. And more important than the stock going up is the production went up. And that made the costs drop. So you did two significant things. The more quarters you do that people are going to start trusting the Fino factor,” he said.

The Davies factor is even more important when talking about Gran Colombia's improved balance sheet. As part of the restructuring, any excess cash that GCM accumulates every quarter gets swept into a “sinking fund” that will be used to pay out the 2020 debentures ahead of maturation – in other words, retiring the debt, which is currently sitting at about $142 million; in July, the company reduced $3.6 million of the 2020 debentures. Bondholders can convert their debentures into shares at any time before maturity at an exercise price of US$1.95.

Perhaps the more important figure is the increased EBITDA. Due mostly to cost cutting, Gran Colombia's earnings before interest, taxes, debt and amortization rose 8% from 2016 to 2017, and now stands, on an annualized basis, at $71 million. Davies said the company's 2017 goal is to generate excess cash flow of $15 million, of which $5.5 million has already been realized in the first half. All that money will go into the sinking funds to retire more debt.

> http://www.kitco.com/commentaries/2017-11-14/INVESTIGATION-The-Turnaround-at-Gran-Colombia-Gold.html

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Wednesday was a good day for GCM's stock

But it is still WAY below adj. Book Value per share at c$12.40 (will come down towards C$5-6 as debs are converted)

GCM.t / Gran Columbian Gold ... 10d : 5yrs : 12mos : $2.55 +0.12 : +4.94%, vol.: 486,383

jH9NLjQ.gif

Recent Comments - from the Stockhouse Bullboard

RE:...:Solid production for March

Thank you Chupaca..
Not long ago I was shareholder of Lake Shore which was sold for $ 950 MM and was producing 170 000 oz /year .Of course there are many other things to consider but Gran Columbia at this price is well undervalued.
21 000 000 shares at $ 2,40=$ 50 M + debt or $ 150 MM.
I d'ont know what I'm missing but Grand Columbia looks to me a ''screaming buy.''
/ 2 /
If you add the warrants and the shares that will likely be issued as part of the 2018 debentures, you end up with about 54m shares outstanding which is still only about 2x EBITDA on current prices. Basically every multiple point increase in the stock is worth about C$2.40/ share and peers trade closer to 6x.
/ 3 /
Keep in mind when reading the twelve trailing months production figure  of 187,485 ozs . that there were 42 days of the strike in that time that effected production figures . Also before the strike workers were intimidated by the rebels to miss work . As well , equiment was damaged and capital work at Segovia was disrupted , so the next 12 months are going to see a lot of improvement . If no other problems come up we should be well past 200K ounces of gold .
/ 4 /
You make good points wayned - GCM became a 200,000+ oz producer by doubling production in 2 years - despite some extraordinary headwinds. Having cleared these hurdles there's every reason to expect GCM to continue to outperform.
Method has calculated the fully diluted price to EBITDA to be just 2x. Production should continue to rise, and AISC decline. It would seem that forward fully diluted price to EBITDA might be more like 1x. I don't think there is a rational justification for GCM being this cheap.
/ 5 /
"Why do the Big Houses avoid it?"
Waiting to see how the debentures get sorted out is my guess . Hopefully in a few weeks that will all change .

/ 6 /
Ownership: Who owns the largest blocks of GCM?
Co-chairman Serafino Iacono owns approx. 8% of the company
. If the restructure works as planned he will own close to 10% .  He told me some time ago  if he bought any more he would have to declare he was trying to take ownership under TSX rules . I don`t know if that`s true or not but there is lots of insider ownership .
/ 7 /
Why so cheap? - Country risk, ie Columbia?
There is little country risk in Colombia anymore . I posted only a few days ago about friends who had just returned from vacation there . The World Bank rates Colombia #7 in the world for investment safety , tied with Canada . I would say Colombia is a better bet for resource developement  than Canada . Just look at the companies that have left Alberta or look at  Kinder Morgan throwing in the towel frustrated with Canada . The Ring of Fire has been symied by First Nations for 15 years . I could go on all day about broken hopes in Canada but Colombia is a very good place to be for resource investment  .

/ 8 /
Great volume again today (Monday was: 327,998 shares; Tue.: 285,448; Wed.: 486,385)
Not sure how they are keeping it down, but hopefully deal gets done Thursday and the lid comes off. Been adding weekly in anticipation of a nice pop. Would like to get close to real value. Thoughts?
/ 9 /
Method wrote: What insider sales are you referring to?
(Miller only owned GCM.DB.V so they should be getting all cash in a few weeks if everything goes according to plan and GCM.DB.V hasn't really traded.)
Subin was liquidating shares and 2020 debs on the 20 and 21st of Feb. Actually the insider report shows selling all throughout Feb. Do you understand what happened after Miller died and why Subin controls all the assets and why the selling occurred? No reason to panic.
( Yup, I understand It and think I was the first to mention it here but he only sold some bonds and never converted any to shares. He also only sold bonds above par which makes sense if he planned to sell the entire position anyway on the redemption.
i agree there is no reason to panic and wasn’t suggesting anyone do so. )

>  more http://www.stockhouse.com/companies/bullboard?symbol=t.gcm

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DEBT RESTRUCTURING - is up for Bondholder approval today

Seems likely to pass, and the GCM stock is performing well. Last: C$2.63 +0.08, +3.14%

GCM.t / Gran Columbian Gold ... update

YrCvprH.gif

Outstanding Debentures

Deb-rate : YrE-2017 : Converted:  3/27/18 : Sh.Issued: Converted: 4/20/18
2020-6%: $48,696K :  $0,674K : $48,022K :  0,345.4k
2024-8%: $46,955K :  $3,624K : $43,331K :  1,858.7k
Sub-Total $95,651K :  $4,298K : $91,353K :  2,204.1k
2018-1%: $45,160K  :  $1,174K : $43,986K :  0,602.0k :  $7,260K : $36,726k :
===================: ====================== :
Total-   : $140,811K :  $5,472K: $135,339K: ----------------> (7,260K): $128,079K DEBT O/S
SinkFd. ( $11,900K) : -------------------------------- : ----------------> --------------> (11,900K)
Shares OS : 20,866K : + 2,806K = 23,672K : ---------------->  3,016 K  :  26,687K :
$7,000K x 19% ($1,379,525 Cash)

 

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Receives Requisite Securityholder Approvaval

http://www.grancolombiagold.com/news-and-investors/press-releases/press-release-details/2018/Gran-Colombia-Gold-Receives-Requisite-Securityholder-Approval-and-Consents-and-Expects-to-Close-Previously...read more
==

MAJOR HOLDERS

Name-------------------------------- Shares Held As Of Date
Neil S. Subin                         9.65 M 02/20/18
Serafino Rose Iacono          1.12 M 01/11/18
Frank Giustra                        1.07 M 11/25/16
Miguel Angel de la Campa 1.07 M 01/11/18
Radcliffe Corp.                     769.1K 11/25/16
Hernn Juan Jose Martnez Torres 462.0K 10/11/17
Blue Pacific Assets Corp.   235.9K 10/31/17
Michael M. Davies                56.72K 10/31/17
Rodney D. Lamond               18.33K 04/3/17
Laureano von Siegmund       1.77K 10/31/17

 

 
 

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suberb NEWS!

superb news!

23,7 mio shares outstanding + 3 million shares end of April (2018 debentures) + 12 milion shares from warrants

=38,7 million shares

+appr. 19 million potential shares August 11 2018 if the company pays not in cash  37 million USD 2018 debentures ramaining)

=57,7 million shares (fully diluted sharecount)

...this is perfect news!!!!!      + a lot of cash at the balance sheet (appr. 20-25 million USD end of april 2018?)  ...most undervalued gold company out there ...  marketcap near 100 million USD fully diluted  , debt down a lot, cash up , stong cashflow , 15 million oz of gold ressources ...    thats unbelieveable

..normally SP has to rise to 7-8 CAD

Read more at http://www.stockhouse.com/companies/bullboard#Qd3kcA6DiyTcbXz4.99

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POSTS - from Stockhouse
gold trust
1
This is from the term sheet:

The Company will provide the investor with an amount of gold each year (stored in escrow monthly) in a trust account (the “Gold Trust Account”). The value of the gold in the Gold Trust Account shall be used to amortize the Notes on a quarterly basis. At any price between the Floor Price and the Cap Price, the Notes will be amortized at a premium to par, so the outstanding principal balance of the Notes will decline according to the schedule below regardless of the spot price of gold (with the difference being received by the investor as a premium).

Like you said they removed the Cap price but they kept the floor price. Do you agree with my interpretation?
2
There's no bonus per se for price over $1250.  The debt just amortize faster - you get paid back faster and not getting paid extra.  They remove the clause where the company gets to retain the excess if gold is over $1400 - I guess the debt holder really wants to ensure the money goes toward paying down debt.
Then in a later PR

Serafino Iacono, Executive Co-Chairman of Gran Colombia commented, “Our operations are continuing to meet expectations in early 2018. In January, we produced a total of 16,700 ounces of gold with Segovia contributing 14,613 ounces and another 2,087 ounces coming from our Marmato Operations. We’ve had good response to our proposed Offering and in light of investor feedback in the current gold market, we have decided to remove the US$1,400 per ounce ceiling on the premium that investors will receive on the quarterly sale of the ounces in the gold trust account. This will provide investors with full upside participation in gold prices above the guaranteed floor price of US$1,250 per ounce, enhancing their potential return on investment.”
> http://www.stockhouse.com/companies/bullboard?symbol=t.gcm&postid=27917838

gcm securities attractive
Question regarding outstanding shares- Thanks in advance for help. After the notes are converted what will be the number of outstanding shares. By knowing that we can estimate earnings per share and apply a reasonalbe p/e ratio. Furthermore the tie up with Iamgold is the diamond in the rought which is not valued. Should GCM spin it off?  That is a valid question at this point
2
the remaining 2018 debbentures will be settled on August11 2018 ....
-38 million shares if they choose paying in cash (not likely)
-57 million shares if they choose pay down the remaining 37 million USD (2018 debentures) in shares   ..more likely...
3
nothing is horrible for the company and shareholders...   the notes saves us from bigger dilution .. without the refinancing the fully sharecount was near 70-80 million shares  ..  
a rise in the POG of 100$ (from 1250$) means potential lower revenue from gold (gold in the trust)  of only 1,5 million$ p.a.  .... thats peanuts...
...the company is an an wonderful postion now ...   cashed up bigtime and huge free cashflow...  enough monay at the pocke for Capex of Segovia (tailings,filter presses, modernisation of underground-operations , exploration... this will lead to a more stable production, more reserves , lower enviormental footprint ->maybe repayment of enviormental bands)....
...Marmato will be the next big thing..
4
notes not trading higher- The notes will give owners six year options at 2.21, so in the money, and notes that pay 8.25%. What am I missing here? seems to me the notes are a buy.
5
The new notes aren't listed and haven't even been issued yet. Not sure what you mean by "notes not trading higher".
6
ZANCUDO : I haven`t looked at the deal with IAM Gold for a long time but I don`t think it should be spun off . Zancudo , if historical work means anything could be the biggest of the three properties . GCM simply did not and has not got the money to develope it . That was one of the reason they abandoned drilling there .  This way we could eventually get 1/3 of a mine at no cost to us . I believe we will also collect some nice stage payment and don`t quote me , but a royalty . This is one hell of a deal for us .

> http://www.stockhouse.com/companies/bullboard?symbol=t.gcm&postid=27924126

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Bullboard = "excitement for 2018"

kkkrrr wrote:
from the Q4 report.. there was a internal PEA on Segovia for 6years minelife at 1250$ POG.. appr. 170 million USD  NPV ...    this is only for the next 6 years minelife and for the reserves +  indicated resources ...     you get all Segovia inferred resources + exploration upside , Zancudo , Marmato (10 million oz + )  for free   ....hang on and hold on your shares ;)

I think beyond getting to some normal valuation, the excitement in the story for 2018 will likely be the exploration program at Segovia as they drill the 60% of the concession that is unexplored. 
Read more at http://www.stockhouse.com/companies/bullboard#sKfmxBI7QCTMS22H.99

800d MA is now support

It is not a Fibo# like 610 and 987, but this chart shows it provided Resistance -- update 800d chart

xtIVaNL.gif

Now that GCM broke through, it could/should be support

Almost a Double from the Aug. Low

gcm ... update

MCCpfs9.gif

Ratio: GCM-to-GOLD

66zlh4r.png

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GCM has been one of the strongest performing Gold shares, but is still "too cheap"

 Compare:
===== : -$-Last : change : %-chg. : volume
GCM.t : C$2.68 : + 0.07  : +2.68%: 110,604
GDXJ  :  $32.51 : - 0.52  : - 1.57% : 9.65 M.
GDX - :   $22.28 : - 0.45  : - 1.98% : 45.5 M.
GLD - :   124.59 : - 0.91  : - 0.91% : 9.59 M.
CAD - :   $0.779: +.0006: +0.08% : - n/a-

GCM.t / Gran Columbian Gold ... 3-years : 10d :

JUS62yp.gif

GCM's debt restructuring was completed yesterday, 4/30/18.

This should clear the way for further improvements in the stock price, since potential stock dilution is much reduced,

and the Balance sheet now looks more "normal"

 

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New Gran Columbia Balance Sheet

=======
Equity -  :                    28.11 Million shs x C$2.68 x 0.78 = US $ 58.8 Million MktCap
5%debs : converted
- - - - (A) : At $1.95 = 17.64 Million shs ($34.4 Mn / 1.95)
- - - - (B) : At 81% cv. 14.29 Million shs
- - - - - - - :    19% : US$ 6.54 Million cash to pay by Aug. 2018. + 5% interest for 3.5 mos = $502k
Equity combined: 42.4 - 45.75 Million shares xUS$2.09 = (US$88.6 - 95.6 Million, after 5% debs retired)
8.25% debs : US $98 Million
Wts.@c$2.21: on 12.15 million shares > dilluted: 54.55 - 57.9 Million shs, 56m x 2.09= US$ 117 Mn MktCap w/ wts. exercised

 

Gran Colombia Gold Announces Closing of US$98 Million Debt Financing and Early Settlement of US$7.3 Million of 2018 Debentures April 30, 2018

Wts are In the Money

C$2.68 - C$2.21 = C$0.47 x 124 wts/deb = C$58 x 0.78 = USD 45, an extra 4.5% (?) on value of Debs.

Will be split-able in 45 days, and should start trading after 4-months Hold period

Gran Colombia Gold Corp. (the “Company” or “Gran Colombia”) (TSX:GCM) announced today that it has closed its previously announced proposed debt financing (the “Offering) of 97,992 units (the “Units” and each, a “Unit”) for aggregate gross proceeds of approximately US$98 million. The Offering was led by GMP Securities L.P. as sole lead agent and sole book-runner. Each Unit consists of US$1,000 principal amount of senior secured gold-linked notes (the “Notes”) and 124 common share purchase warrants (the “Warrants” and each, a “Warrant”) of the Company (12,151,008 Warrants in aggregate). Each Warrant has an exercise price of CA$2.21 and entitles the holder thereof to purchase one common share in the capital of the Company (a “Common Share”) at any time prior to the maturity of the Notes. The Notes and Warrants comprising each Unit will not separate until 45 days following the closing of the Offering. The Notes and the Warrants are also subject to a hold period equal to four months and a day following the closing of the Offering, and the Company will take commercially reasonable steps to obtain approval for the listing and trading of the Notes and the Warrants on the Toronto Stock Exchange by the end of the hold period.

As of the day hereof, there are US$48,022,940 and US$42,872,953 of Senior Secured Convertible Debentures due 2020 and 2024, respectively (collectively, the “Senior Debentures”), issued and outstanding. The Company announced today that it has provided notice (the “Redemption Notice”) to the trustee (the “Trustee”) of its Senior Debentures that, on May 14, 2018 (the “Redemption Date”), the Company will redeem all of the principal amount of its outstanding Senior Debentures at a redemption price equal to US$1 for each US$1 principal amount of Senior Debentures, plus accrued and unpaid interest up to (but excluding) the Redemption Date.

Early Settlement of 2018 Debentures

The Company also announced today that it completed the early redemption of US$7,260,659 aggregate principal amount of its Senior Unsecured Convertible Debentures due August 2018 (the “2018 Debentures”) from holders who elected to exchange their 2018 Debentures at the closing of the Offering for a cash payment equal to 19% of the principal amount of their 2018 Debentures, representing a total payment of US$1,379,525 funded by cash held in the sinking fund for the 2018 Debentures, and the remaining 81% of the principal amount settled with Common Shares, representing the issuance of a total of approximately 3,015,966 Common Shares, based on the conversion price of US$1.95 per Common Share. As of the date hereof, there are US$34,399,642 aggregate principal amount of 2018 Debentures and 28,115,533 Common Shares issued and outstanding. Furthermore, the annual interest rate on the issued and outstanding 2018 Debentures will increase from 1% to 5%, effective April 30, 2018.

> http://www.grancolombiagold.com/news-and-investors/press-releases/press-release-details/2018/Gran-Colombia-Gold-Announces-Closing-of-US98-Million-Debt-Financing-and-Early-Settlement-of-US73-Million-of-2018-Debentures/default.aspx

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Interesting calculations here...

CASH and Cash flow...

RE:RE:RE:RE:Strong morning

some things..

-in the sinking fund were 11.9 million USD End of 2017 ..now the needed appr. 1 million USD for earlier repayment of 2018er debentures
...appr. 11 million USD will go back to the cash balance

-the Notes:98 million USD .. they will need only 91 million USD for repayment of the 2020/2024 debentures +app. 1-2 millionUSD interest payments until may 15
...appr. 5-6 million USD will go to the cash balance

-12,2 million warrants from the notes
... appr. 20 million USD potential cash from this

-free cashflow Q1 after Capex spending minimum 10 million USD

-Cash end of 2017 appr 3 million USD

Cash now: appr 47 million USD (including cash from warrants)  ...  

..Marketcap 120 million USD fully diluted (57 million shares (remaining 2018er debentures paid in shares on August11 + all warrants converted)
...the company is swimming in cash now and has strong quarterly cashflow...    cheapest gold-stock out there...


Read more at http://www.stockhouse.com/companies/bullboard#7H1hftvZLa3GOG9w.99

i think: $47m - $20m = $27m

because:

-12,2 million warrants from the notes
... appr. 20 million USD potential cash from this
-- did not happen yet!!

and also, the debt exchange probably cost them $1-2 million

And there is ongoing capex

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Good Press this week - Let's see if the earnings prove strong also

Frank Holmes interview

"Frank Holmes thinks GCM could quadruple"

TGR: How should gold fare in all of this?

FH: Gold is extremely undervalued. Over the last 50 years, the U.S. dollar has replaced gold for what I call the Fear Trade. The U.S. government prints billions of dollars, and 80% of the $100 bills are held outside of America. One of my employees is from Latin America, and he always has three $100 bills in his passport just in case there's a crisis. The U.S. dollar has become the currency of safety and last resort. When the hurricane shut down Puerto Rico, it was dollars, not cryptocurrency, that people used. If you had silver coins and gold coins, you could turn around and get things with them, but more important were U.S. dollars.

And so, I think the government realizes it's like a free source of currency, and it prints billions of dollars. It's estimated that something like $25 billion a year gets lost in overseas currency. And sure, they buy products with it, legal and illegal products, but it's a huge source of funding for the U.S. So, I think it's in conflict with gold.

. . .

TGR: For investors, do you want to talk about companies that you think would be good for them to take a look at?

FH: Last year I launched a smart beta gold equity ETF called the U.S. Global GO GOLD and Precious Metal Miners ETF (GOAU:NYSE), and it has shown competitive performance against the GDXJ (VanEck Vectors Junior Gold Miners ETF) since its launch. Why could that be? In my opinion, when you look at the GDXJ constituents, 60 some-odd gold stocks, they have a propensity to issue shares or make acquisitions that are potentially dilutive to the value metrics that people might use to make their stock go up. So it appears there's been a 40% dilution a year. And either gold can go up 40% a year or their production can rise 40% a year or these stocks might just have to lag. With GOAU, we try to focus on smaller stocks that really aim to protect their value metrics per share.

On individual names, I would say to go for a speculative turnaround where something has to happen with it, like Gran Colombia Gold Corp. (GCM:TSX). This company has seen free cash flow. It restructured its balance sheet. And if you look at Gran Colombia's market cap:enterprise value, to companies producing 150,000 ounces of gold, I think this stock has the potential to quadruple. And I think that that's where I would tell investors to look. It has a strong board of directors with lots of mining credentials—Mark Wellings, Mark Ashcroft. These are people whose families have been in the mining business. They're engineers. They've worked in investment banking. So it really helps in the stewardship of that company going through a restructure and turnaround. I think that that's one.

And for the real safe players that are wanting a big chip, I personally would rather buy Franco-Nevada Corp. (FNV:TSX; FNV:NYSE), Wheaton Precious Metals Corp. (WPM:TSX; WPM:NYSE) or Royal Gold Inc. (RGLD:NASDAQ; RGL:TSX). They represent 30% of the GOAU ETF.

> https://www.oilandgas360.com/supercycle-may-be-setting-up-for-higher-commodity-demand/ 
 
/ 2 /

TORONTO, May 03, 2018 (GLOBE NEWSWIRE) -- Gran Colombia Gold Corp. (TSX:GCM) announced today that it will release its financial results for the first quarter of 2018 after market close on Thursday, May 10, 2018 and will host a conference call and webcast on Friday May 11, 2018 at 9:30 a.m. Eastern Time to discuss the results.

Webcast and call-in details are as follows:

Live Event link: https://edge.media-server.com/m6/p/tck6woh8

Read more at http://www.stockhouse.com/news/press-releases/2018/05/03/gran-colombia-gold-announces-details-for-its-first-quarter-2018-webcast#TVMzebQOYkBWuC5W.99

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Gran Colombia Gold Q1 Earnings Per Share $0.25 > x4 =$1.00 (that's a PE of just 2.60!)

Reuters-14 hours ago
May 10 (Reuters) - Gran Colombia Gold Corp: * GRAN COLOMBIA GOLD REPORTS FIRST QUARTER 2018 RESULTS; FILES NATIONAL ...
 

INCOME SENSITIVITY to Production (in Ounces)

======= :  - 2016 - :  - 2017 -:  //  Q1'2017- : Q4'2017- :  -Q1'2018  : Q2'2018- :
Prod.Oz :  149,708  : 173,821  // 39,008oz :  51,699oz :  52,672oz :  50,000oz :
Au. Sold : ======> : ======> //  38,434oz :  ======> :  49,610oz :   50,000oz :
Revenues $185.1M : $215.4M // $ 45.7 M : $ 70.9 Mn : $ 64.8 Est : $ 65.0 Est :
Revs/Oz: $1,236oz : $1,239oz // $1189oz : $1371/oz : $1306/oz. : $1300Est (=$123.2x10.55)
EBITDA :  $ 66.0 M : $ 75.5 M // $ 13.6 Mn : $ 26.8 Mn : $ 27.4 Mn : $ 25.0 Est :
EB-/Oz. :  $ 441/oz : $ 434/oz // $ 349/oz  :  $ 518/oz : $  520/Est : $  500/Est :
FinlChg. : $ 32.8 M : $ 32.2 M //  $ 7.88 M :  $ 8.37 Mn : $8.00 Est  : $8.00 Est  :
Eb-Fin'l.  : $ 33.2M  : $ 43.3 M //  $ 5.72 M :  $ 18.4 Mn : $ 18.3 Mn :
Adj.NetI : $ 15.6 M : $ 22.9 M //  $ 3.10 M :  $ 11.0 Mn : $ 9.85 Mn : $10.0 Mn
aNI/Oz. : $ 104/oz : $ 132/oz //  $79.4/oz :  $ 213 /oz : $ 186 /oz : $ 200/ Est.
Net Inc.- : $ - n/a -  : $ - n/a -  : //   ( 0.8 M ) :  $ - n/a - -  :  $ 5.4 Mn :  $ ??? Mn .
ExcessCF : $ 2.9M : $ 16.4 M  //  $ 2.28 M : $8.60 Mn :  $2.55 Mn  : $6.00 Est
===

National Instrument 43-101 Technical Report for Segovia Operations : A/T Cash Flow, 6 YRS : $148 million @ $1300

Gran Colombia announced today that it has filed a prefeasibility study (“PFS”) technical report on its Segovia Operations (the “Technical Report”) pursuant to National Instrument 43101 - Standards of Disclosure for Mineral Projects (“NI 43‐101"). The Technical Report supports the disclosure made by the Company in its 2017 Annual MD&A dated March 27, 2018 and related news release and is based on the Mineral Reserve and Mineral Resource estimate for the Segovia Operations with an effective date of December 31, 2017.

The PFS has provided Segovia’s first reported Mineral Reserve of 660,000 ounces of gold based on 1.7 million tonnes of material at an average head grade of 12.4 g/t. Although the preliminary results announced on March 27, 2018 identified all of the Mineral Reserve as probable, the final results included in the Technical Report comprise 68,000 ounces of proven Mineral Reserve based on 46,000 tonnes at an average head grade of 45.4 g/t and 592,000 ounces of probable Mineral Reserve based on 1.6 million tonnes at an average head grade of 11.4 g/t.

The PFS life-of-mine (“LoM”) production schedule foresees the total 1.7 million tonnes of material being processed over a six-year mine life resulting in a total gold production of 610,000 ounces produced at an average LoM total cash cost (1) of $669 per ounce and an AISC(1) (excluding corporate G&A) of $896 per ounce. At an expected long-term gold price of $1,300 per ounce, total LoM undiscounted after-tax free cash flow from mining operations amounts to $148 million. The PFS production schedule includes only proven and probable Mineral Reserves, and as such, the projected mine life for the PFS will be shorter than the Company’s current expectations (which remains at 2026 as per the previous Preliminary Economic Assessment)

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BULLBOARD COMMENTS

RE:Expectations

the question will be..how much money they spended for Capex  (tailings, filterpresses and ventilation at Sandra K -mine) ...    Q1 is not imoportant for me because we get the first CLEAR balance sheet after all financial restructuring with the Q2 report .......

Q2 will be an eye-opener ...  no sinking fund (higher cash balance), cash from the notes offering , much lower long-term-debt , simple share-structure , book-value around 7-8 CAD per share     ...hope wie get some news about marmato and Zancudo after the 2020/2024 debentures are gone .... i think management is holding back some news because they don't want a hifgher SP until the 2020/2024 debentures are gone..they want keep the sharecount low...

Read more at http://www.stockhouse.com/companies/bullboard#JlcU2oAWM8Rkzq0D.99

Perfekt Numbers!

-Adjusted net income (1) for the first quarter of 2018 of $9.8 million, or $0.46 per share         .....P/E-ratio extremely low
Adjusted EBITDA(1) doubled in the first quarter of 2018 to $27.4 million compared with $13.6 million in the first quarter of 2017, bringing the trailing 12-months total adjusted EBITDA at the end of March 2018 to $89.3 million, up 18% compared with 2017.

RE:Results out

wonderful!!!!  just wonderful!
2.
Most important takeaways from the call I thought were that April production was a bit lower t han Q1 run rate because of heavy rains for three weeks but May is better. Also, if production stays strong they will produce above the high end of the guidance range. 

3.

holders of the issued and outstanding senior debentures will not be able to convert their senior debentures after 4 p.m. (Toronto time) on May 11, 2018.

 
CALL NOTES:

shares: now 29.3 mn > 47mn, if fully converted
debs redeemed monday
27.3m ebitda, best yet
45g proven > 19g probable

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(last week)

He was paid out / will be redeemed - by new investors in 8.25% Debs

Neil S. Subin Elects to Redeem Gran Colombia Gold Corp. 2020 Senior Secured Convertible Debentures

| Source: Neil S. Subin

WEST PALM BEACH, Fla., May 03, 2018 (GLOBE NEWSWIRE) -- As a result of certain recent actions taken by Gran Colombia Gold Corp. (“Gran Colombia” or the “Company”) allowing for early redemption of its Senior Secured Convertible Debentures due 2020 (the "Debentures"), holders of the Debentures may elect to have the Debentures redeemed at par on May 14, 2018.

Mr. Neil S. Subin (“Mr. Subin”), having control or direction over US$18,334,092 principal amount of the Debentures, which are convertible into approximately 9,402,098 common shares of Gran Colombia (“Common Shares”), representing approximately 25.07% of the outstanding Common Shares on a partially diluted basis taking into account only the outstanding Common Shares, as reported by the Company, and the Debentures over which Mr. Subin controls or has direction over and no others, has elected to have all of the Debentures held redeemed at par.

Mr. Subin and his joint actors elected to have all holdings of the Debentures redeemed as part of their normal investment activities. Depending on the evolution of Gran Colombia business, financial condition, the market, if any, for Gran Colombia securities, general economic conditions and other factors, Mr. Subin and his joint actors may acquire securities of Gran Colombia in the open market, by private agreement or otherwise, subject to their availability at attractive prices, market conditions and other relevant factors.

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MORE POSTS on the Bull Board:

No more Dilution - the Line was crossed on Friday May 11th

1. M :

holders of the issued and outstanding senior debentures will not be able to convert their senior debentures after 4 p.m. (Toronto time) on May 11, 2018.

2. K :

the 2020/2024 debentures are gone now ...  restructure of debt weill end with below 60 million shares fully diluted (the 12 million warants from the Notes included ,wich means 20 million USD potential cash) ... very nice
..operational Segovia looks fine , now lets grow reserves there    , drill results Zancudo , start drilling at Marmato with the goal of a  PEA end of the year....  ...interesting times

3. W :

I have an idea of what may happen at Gran Colombia but this is only my opinion so please if you have to dump on me be gentle .   I notice that lately M+A activity is heating up .  There are just not any big deposits being found anymore in safe locals with friendly governments .  GCM is an obvious candidate . It is already permitted and operating . It`s proven reserves aren`t that big but it`s possible ounces are huge . Remember Marmato as an open pit plan was over 10 million ozs.without the deep deposit . And Sergovia has blue sky , high grade upside .  Both deposit areas are mostly unexplored . The most likely candidate would be IAM Gold who are already there at Zancudo .  They are not obliged to give us information on their drilling but we are owned money before too long  .  Mining CEO`s are famous for not buying companies when they are cheap but waiting till they are fully priced then driving the price up some more .  I would be very suprised if GMC didn`t eventually fetch above $10 .   This all depends of course on the price of gold but In this world it can only be going up .  My GCM shares are a long , long time hold .
Read more at http://www.stockhouse.com/companies/bullboard#AGFqQeTPFKC30F48.99

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DEBT Reconciliation

Most recent report, as of May 10th, on the company website:

$ 47.7 million 2020 debentures outstanding
$ 40.8 million 2024 debentures outstanding 

Was previously reported (April 30) at:

As of the day hereof, there are $48,022,940 (U.S.) and $42,872,953 (U.S.) of senior secured convertible debentures due 2020 and 2024, respectively, issued and outstanding.
 
Dilution removed: 80 mn shares @ US$1.95
Capital structure was:
2020 Debentures--»$ 47,7 M----»24,5 M shares issued
2024 Debentures--»$ 40,8M-----»20,9 M shares issued

So the total share issued and debentures paid (would have been) 92,300,000 issued shares.
Instead, there are now warrants: $98M x 124 / per $1,000 Debs:  (12,152,000) @ C$2.21
-------------------------------------------> REDUCTION in shares to be issued:  80,148,000 shares
 
NOW: fully diluted (57 million shares (remaining 2018er debentures paid in shares on August11 + all warrants converted)
 

...RE:Results out

sharecount:
30.40 milkion outstanding
+2 million options (2.55 CAD)
+12.1 million warrants from Notes
+ appr 14.2 million from 2018 debentures (GCM will settle 19% of the outstanding debentues in cash = 14.2 million potential shares ddwon from 17.6)

=58,7 million shares fully diluted

Cash , including cash from warrants appr. 40 million USD , big inventory,income taxes mostly paid for 2018 ...   long term debt 98 million USD ....    strong cashflow, big resources ....     absolutely crazy valuation ;))))))  ..SP should be at 7-8 CAD now ;)
/ 2 /
On the 2018 debs, why do you think so kkkrrr?
They put this in the earnings press release: "The Company continues to expect that it will use its option to settle its remaining 2018 Debentures, of which $34.4 million aggregate principal amount is currently issued and outstanding, at maturity in August 2018 with common shares to the maximum extent possible."

On that basis, I'm getting to ~62m fully diluted shares and net debt of US$55m using the treasury method. 

Net debt also falls pretty quickly based on debt amortization schedule. 


Read more at http://www.stockhouse.com/companies/bullboard#VLD4DsKKdOs2diYK.99

So long as GCM.t is trading above US$1.95 / 0.785 = C$2.XX, rational things is to convert 100% of 2018 debs to shares

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As of today, the Company’s capital structure is as follows:

Securities TSX 
Symbol
Number Shares 
Issuable
Exercise price 
per share
Expiry date
           
Common shares GCM 30,466,462      
           
Stock options   47,000 47,000 CA$27.60 July 2019
    709,999 709,999 CA$2.55 April 2021
    1,006,328 1,006,328 CA$2.55 April 2022
    81,666 81,666 CA$2.55 December 2022
    1,844,993 1,844,993    
         
Senior convertible debentures        
2018 Debentures GCM.DB.U 34,389,642 17,635,713 US$1.95 August 11, 2018
           
Warrants GCM.WT.A 4,211,918 280,795 CA$48.75 March 18, 2019
           
Units (1) Unlisted 97,992 12,151,008 CA$2.21 April 30, 2024
           
  1. Represent Units issued by the Company on April 30, 2018 (the “Closing Date”) pursuant to the Offering. Each Unit consists of US$1,000 principal amount of Notes and 124 Warrants. The Notes and Warrants comprising each Unit will not separate until 45 days following the Closing Date. The Notes and the Warrants are also subject to a hold period equal to four months and a day following the Closing Date and the Company will take commercially reasonable steps to obtain approval for the listing and trading of the Notes and the Warrants on the TSX by the end of the hold period. (Four months holding period ends: end of August, so trading of the new debentures & warrants should begin in early September.)

Read more at http://www.stockhouse.com/companies/bullboard#bylV6sG3hOEb7Qc2.99

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Non-Marginable:
Stock price below 2 CAD Reg T Margin
Cash or RSP/TFSA
100% * Stock Value
100% * Stock Value
Stocks with Market Capitalization below 250 million USD Reg T Margin
Cash or RSP/TFSA
100% * Stock Value
100% * Stock Value
Stocks traded on Venture exchange. Reg T Margin
Cash or RSP/TFSA
100% * Stock Value
100% * Stock Value

> Source, IB: https://www.interactivebrokers.ca/en/index.php?f=marginCA&p=stk

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GCM made a new Closing High on Tuesday

Updated, Last: C$2.84 at 5/23/2018 - Versus 610d.MA : 987d.MA : 700-800d :

image.png

https://imgur.com/a/A6WhtQg

AoQ6uY6.gif

Oddly, the 700d & 800d MAs provided resistance. 

900d? We shall see.

1/5% Debs are worth : ($1000/1.95=512.8 shs) x (C$2.84 x 0.779-$2.21) = US$1,133, or $113.3

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