TORONTO, June 8, 2012 /PRNewswire/ - Gran Colombia Gold Corp. (TSX: GCM) is continuing to progress its efforts to expand capacity and increase gold production at its Segovia Operations, but due to delays in reaching its targeted capacity at Maria Dama in the second quarter of 2012, combined with lower than planned grades of ore in March, April and May, the Company has revised its full year 2012 production target for the Company to a range of 115,000 to 135,000 ounces of gold from its Segovia and Marmato Operations, from the previously expected 155,000 ounces of gold.
Gran Colombia is in the process of upgrading the Maria Dama plant to achieve a targeted capacity of 1,500 tonnes of ore per day at its Segovia Operations. In the first quarter of 2012, the plant processed an average of 509 tonnes per day and the Company had expected the plant to ramp up to 1,000 tonnes per day by early in the second quarter and to 1,500 tonnes per day by the end of 2012.
The new ball mill at the Maria Dama plant came on-line in mid-May and continues to be tested under increasing loads. After experiencing delays related to power supply interruptions due to problems at EPM's La Cruzada substations, together with the mill's motor bearings overheating due to misalignment problems, and subsequent delays due to problems with the original crusher, the mill has averaged only 510 tonnes per day in April and May, despite achieving maximum loads of 850 to 900 tonnes per day.
Additionally, the Company has recorded lower than expected head grades at its Segovia Operations, due to capital development work in its mines to open new ore faces. This negatively impacted grades in March and continued in April and May of 2012.
As a result of these developments, the Company now expects 2012 gold production at its Segovia Operations to be between 90,000 and 110,000 ounces of gold. The Company continues to expect production from the underground mine at Marmato to total approximately 25,000 ounces of gold, resulting in expected total production for the Company of between 115,000 and 135,000 ounces of gold for the full year of 2012.
"Our longer term plan remains on track. While we are disappointed by the delays that we have experienced in ramping up the production capacity at our Segovia Operations in the second quarter, we remain confident in our ability to achieve our longer term target of an annual production rate of 200,000 ounces of gold at Segovia by 2014," said Maria Consuelo Araujo, Chief Executive Officer of Gran Colombia Gold. "We will remain focused on achieving our longer term target production levels and will continue to invest in our key initiatives, adjusting our discretionary spending plans accordingly."
About Gran Colombia Gold Corp.
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.
Cautionary Statement on Forward-Looking Information:
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. 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. Forward-looking statements contained herein are made as of the date of this press release and Gran Colombia disclaim, 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.
SOURCE Gran Colombia Gold Corp.