TORONTO, Sept. 21, 2011 /CNW/ - Gran Colombia Gold Corp. (TSX: GCM)
announced today that it has taken a number of actions this month to
increase production and reduce costs at its operations in Segovia which
are expected to reduce costs by more than US$2 million per month or
approximately US$400 per ounce at the current level of gold production.
On September 6, 2011, the Company reached the first anniversary of the
re-start of operations at its Segovia operations. During this period,
the Company honored its acquisition-related obligation to maintain
employment of 1,428 workers during the first year of operations.
During this time the Company completed development and expansion
projects at the mine, identified areas of opportunity to improve
efficiencies and laid the groundwork for a reduction in the labor force
predicated on finding suitable alternative employment for the displaced
workers. In early September, Gran Colombia successfully completed this
initiative with a reduction of 603 workers, or 42%, bringing the number
of employees in the Segovia operations down to approximately 825.
Maria Consuelo Araujo, Chief Executive Officer of Gran Colombia
commented "this reduction in our workforce at Segovia was an important
step forward for our Company, balancing our responsibility to take into
consideration the impact of our actions on the community with the
Company's need to improve its operating performance."
Small Miner Contract Revision
Additionally, the Company renegotiated contracts with small miners. A
portion of Gran Colombia's gold production from its Segovia mining
operations is sourced from ore mined by small to medium mine
contractors operating within its mining property and purchased by the
Company pursuant to a formula based on estimated gold content and the
market price for gold. In addition, the Company has entered into
additional contracts with newly formed mine contractors that included
certain of the displaced workers. As a result of the actions taken in
September, the Company has secured arrangements to purchase ore at a
lower cost, averaging approximately 55% of the market price for gold,
down from the original 70% while continuing to ensure environmentally
compliant processing is maintained for such production.
The Maria Dama mill in Segovia has been producing at an average rate of
535 tonnes per day in 2011. Earlier this week, a new crusher-jig-sifter
system was placed into operation that will increase mill capacity to
700 tonnes per day. Gran Colombia has also acquired a new ball mill to
replace four existing smaller ones. The new ball mill, being shipped
from the United States, is scheduled to be onsite in the fourth quarter
of this year and is expected to be fully operational in the first
quarter of 2012, increasing mill capacity to 1,000 tonnes per day.
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 six underground mines in operation. In
addition, Gran Colombia is also developing a large-scale, open-pit gold
and silver mine at Marmato. The Company also has a highly-prospective
land position in Colombia as well as an advanced stage property in
Venezuela and earlier stage properties in Mali.
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.
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.
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