TORONTO, Feb. 3, 2014 /CNW/ - Gran Colombia Gold Corp. (TSX: GCM) (OTC:
TPRFF) announced today that it has implemented actions to strengthen
its management team, improve its cost structure and has secured bridge
financing in advance of its prospectus financing (see the company's
press release dated November 19, 2013).
The Board of Directors has appointed Mr. Lombardo Paredes Arenas as
Chief Executive Officer (CEO) of Gran Colombia Gold. Ms. Maria Consuelo
Araujo will be appointed in a new role, as President of the company and
focus her efforts on governmental relations and corporate
Commenting on today's announcements, Serafino Iacono, Executive
Co-Chairman of Gran Colombia Gold, stated, "We are excited to have Mr.
Paredes join our team as we prepare for the implementation of our new,
modern mining operation at Segovia and focus on improving the
efficiency of our existing operations." Looking forward to 2014, Mr.
Iacono added, "We are currently completing our 2014 operating plan
which is designed to deliver a cost structure that positions the
company to generate the cash flow needed to meet our 2014 financial
Mr. Paredes assumed the role of CEO effective February 1, 2014 and
brings to his position over 20 years of corporate leadership and
operations management experience in the resource sector in Latin
America. Before becoming an independent consultant on energy and
environment project development, Mr. Paredes, within Petroleos de
Venezuela (PDVSA), held several roles with responsibility for regional
planning of investments and social development for Eastern Venezuela,
and was Managing Director and a Board Member of Maraven S.A. (an
affiliate of PDVSA), with responsibility for the construction and
commissioning of the Cardon Refinery Conversion Project in Venezuela, a
US$2.6 billion project, and was General Manager of its Production
Operations Division, with 5,000 employees and oil production of 800
KBbls per day. Mr. Paredes holds a Bachelor of Science in Mechanical
Engineering and Master of Economic Analysis and Financial Economics.
In January 2014, Gran Colombia completed a restructuring of its
operations at Segovia to continue the expansion and modernization of
mining activities and improve security in the mining and processing
operations. Certain key functions will be directly employed by Gran
Colombia and a local contractor has been engaged to carry on the mining
activities in the company-operated areas at Segovia. This new mine
contractor will be remunerated for their services based on tonnes
mined, thereby lowering mining costs per tonne and turning the former
fixed operating cost structure into a variable cost more closely
aligned with production, revenues and cash flows.
As a result of this operating cost restructuring and focusing the 2014
mine plan on higher grade areas at Segovia, supported by the company's
continuing investment in mine development, the company expects that its
all-in sustaining cost ("AISC") will decrease in 2014 to an annual
average of about $950 per ounce, down from our preliminary annual
average of about $1,300 per ounce in 2013. The AISC per ounce estimate
for 2014 is based on current gold price levels and will increase or
decrease to some extent as a result of the company's natural hedge in
its cost structure to gold price fluctuation related to its artisanal
mining contracts that remunerate the cooperatives for their mining
services under a formula tied to recovered gold and the spot price of
gold. The company will also require approximately $200 per ounce to
service its debt and other financial obligations in 2014, including its
Gold and Silver-linked notes.
On November 19, 2013, Gran Colombia announced the filing of a
preliminary short form prospectus in all of the provinces of Canada,
except Quebec, in connection with a "best efforts" offering of a
minimum of US$7 million up to a maximum of US$15 million of units of
Gran Colombia at a price per unit to be determined in the context of
the market. The company also announced that certain current
shareholders and principals of the company have indicated that they
intend to purchase a minimum of US$5 million of units of the offering.
In advance of this proposed offering, Gran Colombia has received a US$4
million, interest free bridge loan from the aforementioned shareholders
and insiders, which shall be redeemed and accounted for as a
subscription for shares in the proposed offering. The proceeds of the
bridge loan are being used to finance the operational restructuring
referred to above and for working capital.
The aforementioned securities offering have not and will not be
registered under the United States Securities Act of 1933, as amended
(the "U.S. Securities Act"), or any U.S. State securities laws and may
not be offered or sold, directly or indirectly, within the United
States or its territories or possessions or to or for the account of
any U.S. person (as defined in Regulation S under the U.S. Securities
Act) other than pursuant to an available exemption from the
registration requirements of the U.S. Securities Act. This news release
does not constitute an offer to sell or a solicitation of an offer to
buy any such securities within the United States, or its territories or
possessions, or to or for the account of any U.S. person.
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. Gran Colombia is currently advancing a
project to develop a modern, large-scale, gold and silver mine at its
Additional information on Gran Colombia can be found on its website at www.grancolombiagold.com and by reviewing its profile on SEDAR at www.sedar.com.
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 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
SOURCE: Gran Colombia Gold Corp.
For further information:
VP, Investor Relations