Gran Colombia Gold announces an 11 percent increase in average daily gold production in April and May 2013 and further improvement in cash costs at the company's Segovia Operations
TORONTO, June 24, 2013 /PRNewswire/ -- Gran Colombia Gold Corp. (TSX: GCM) announced total gold production at its Segovia Operations in April and May 2013 of 14,367 ounces, or 235 ounces per day, an increase of 11 percent over average gold production of 212 ounces per day in the first quarter of 2013.
The month of May also reflected positive results from the company's cost cutting initiatives, with cash costs at the company's Segovia Operations improving to $1,073 per ounce, down from $1,315 per ounce in the first quarter of 2013.
"In May, we achieved the highest monthly production in the company's history at our Segovia Operations", said Serafino Iacono, Executive Co-Chairman of Gran Colombia. Mr. Iacono further noted that, "I am pleased to announce that we continue to progress towards meeting our annual production target for 2013, and that the cost cutting initiatives identified and implemented across all aspects of our business are resulting in significant reductions in our cost structure that will allow the company to meet its 2013 cash flow targets in the current gold price environment".
Production improvements in April and May were driven by continued improvement at the company's Segovia Operations, with the daily average mill rate at the Maria Dama plant processing more than 1,000 tonnes of ore per day for the third consecutive month. The Marmato Underground operations remained steady in April and May, producing a total of 3,342 ounces of gold, or 55 ounces per day. This resulted in total gold production for the company in April and May of 17,709 ounces of gold, or 235 ounces per day, a 7 percent improvement from the first quarter of 2013.
In May 2013, Segovia Operation's cash cost decreased to $1,073 per ounce of gold due to the cost reduction initiatives implemented by the company in 2013, the impact on fixed costs per ounce of the higher production rate, the impact on artisanal mining costs of lower gold prices and weakening of the Colombian Peso against the U.S. dollar. In 2013, management embarked on a comprehensive review of its operations, identifying and implementing $16.2 million in annualized cost savings. This program resulted in $850,000 per month of savings starting in February 2013, and further actions were implemented in May to reduce approximately $500,000 per month on a phased-in basis over the next couple of months, continuing to reduce cash costs per ounce in the second half of 2013.
The company also confirms that it is on track to make the scheduled 5 percent semi-annual interest payment on its silver-linked notes on June 30, 2013.
About Gran Colombia Gold
Gran Colombia is a Canadian-based gold and silver exploration, development and production company with its primary focus in Colombia. Gran Colombia is currently the largest underground gold and silver producer in Colombia with several underground mines in operation at its Segovia and Marmato Operations. In addition, Gran Colombia is advancing a project to develop a large-scale, gold and silver mine at its Marmato operations.
This news release contains "forward-looking information", which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its projects and, specifically, statements concerning anticipated growth in annual gold production and reduction of cash costs. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Gran Colombia to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements are described under the caption "Risk Factors" in the Company's Annual Information Form dated as of March 26, 2013 which is available for view on SEDAR at www.sedar.com. Forward-looking statements contained herein are made as of the date of this press release and Gran Colombia disclaims, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.
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SOURCE Gran Colombia Gold Corp.