TORONTO, Jan. 21, 2015 /PRNewswire/ - Gran Colombia Gold
Corp. (TSX: GCM, OTC: TPRFF) announced today that it has negotiated
a favourable contract amendment with the primary contract miner at
its Segovia Operations and the Company will resume monthly interest
payments on February 28, 2015 on its
Senior Secured Gold-Linked Notes due 2017. The Company also intends
to commence paying interest at the end of February on its Senior
Unsecured Silver-Linked Notes due 2018 on a monthly basis, instead
of the current semi-annual coupon payments. Total combined monthly
interest payments on the senior debt will amount to approximately
US$1.16 million. The weaker Colombian
peso has provided the opportunity and the flexibility for the
Company to pay a fair and reasonable price to its contract workers,
continue to service payment plans to its local suppliers and to
resume payment of interest on its senior debt.
The Company has continued to take the necessary steps to improve
operating cash flow from its Segovia Operations. Gold production at
the Segovia Operations in the fourth quarter of 2014 was 22,427
ounces, up 21% from the third quarter of 2014, driven by an
increase in production sourced from the contract miners which
accounted for 86% of the fourth quarter production. As this will be
a key source of material for the Company as it continues with mine
development and mechanization of operations in the Company-operated
mining areas at the Segovia Operations in 2015, the Company has
negotiated a contract amendment with the primary contract miner
that is expected to generate cost savings, based on current
production and gold prices, of approximately US$700,000 to US$900,000 per month commencing
today. The Company is continuing to work with SRK Consulting (U.S.)
Inc. ("SRK") to optimize its mine plan at the Segovia Operations to
improve future cash flow.
The Company will continue to work closely with its financial
advisor, GMP Securities L.P., as well as Gold and Silver
Noteholders to meet all its commitments and matters related to the
capital structure of the Company, its future debt service
abilities, including the associated principal repayments, put
options of the Gold-Linked Notes and interest currently in arrears
on both Gold-Linked and Silver-Linked Notes. The Company
expects that upon receipt of the optimized mine plan at Segovia
from SRK, it will bring forward a comprehensive restructuring plan
to all stakeholders to include associated consent solicitations
required for changes to material terms of the note trust
indentures.
The Company also announced today that its total gold production
for the fourth quarter of 2014 was 29,043 ounces, up almost 18%
over the third quarter of 2014. Annual gold production for 2014
amounted to 98,622 ounces compared with 102,792 in the prior year.
Segovia's annual gold production in 2014 was 74,506 ounces, down
from 80,226 ounces in 2013, which the Company is addressing through
its mechanization and mine development program in 2015. Annual gold
production at the Marmato underground mine increased to 24,116
ounces in 2014 from 22,566 ounces in 2013. Total silver production
from both mines in 2014 was 125,716 ounces compared with 153,649
ounces in 2013.
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 Segovia
operations.
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 31, 2014, 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.
SOURCE Gran Colombia Gold Corp.