TORONTO, Nov. 13, 2014 /CNW/ - Gran Colombia Gold Corp. (TSX: GCM, OTC: TPRFF) announced today the release of its unaudited condensed consolidated financial statements and accompanying management's discussion and analysis (MD&A) for the three and nine months ended September 30, 2014.  All financial figures contained herein are expressed in U.S. dollars unless otherwise noted.

Third Quarter 2014 Highlights

• The Company now expects that 2014's total annual gold production will be approximately 100,000 ounces. Total gold production in the third quarter of 2014 amounted to 24,666 ounces, below previous expectations as challenges at the Segovia Operations brought on by limitations in the historical mine infrastructure adversely impacted Segovia's gold production in the third quarter while it was continuing to make progress in its mine development program. While the Company has a plan to address these limitations, mainly related to material handling systems and equipment performance, it is now expected that the ramp-up in Segovia's gold production will be more gradual, reaching the 10,000 ounces per month threshold by mid-2015. Some improvements have already begun to take effect as the Company produced a new monthly best total of 11,127 ounces from its Segovia and Marmato Operations in the month of October 2014.
• Revenue of $30.9 million in the third quarter of 2014 was approximately 23% below the third quarter a year ago, attributable to the 20% lower volume in gold sales. However, a $30 per ounce improvement in cash margin per ounce in the third quarter of 2014 over the same period last year, primarily as a result of the Company's cost savings initiatives, mitigated the cash flow impact of this reduction in quarterly revenue.
• The Company's focus on reducing its costs since early 2013 has resulted in a decrease in total cash costs to $1,054 per ounce in the third quarter of 2014. All-in sustaining costs ("AISC") continued to show improvement compared to last year, decreasing to $1,216 per ounce (see the Company's MD&A for the computation of these non-IFRS measures) in the third quarter of 2014. Third quarter 2014 AISC on a per ounce basis was higher than previously expected due to the adverse impact on fixed costs per ounce of the lower gold production and the higher sustaining capital expenditures at Segovia this quarter. With spot gold prices currently in the $1,150 to $1,170 per ounce range, the Company expects that its fourth quarter 2014 AISC will be approximately $1,025 per ounce, benefitting from the natural hedge to spot gold price changes within its cost structure, increased production at Segovia in the fourth quarter and recent weakening of the Colombian peso ("COP") to the current level of about COP 2,100 per USD 1.00.
• The Company continued to control its general and administrative ("G&A") expenses, which amounted to $2.3 million in the third quarter of 2014, bringing the year-to-date total to $6.4 million, equivalent to approximately $90 per ounce sold (excluding depreciation), and on track to meet the Company's guidance of approximately $8 million for the full year.
• Non-operating items, such as foreign exchange gains and finance costs, were the primary contributor to the decrease in the Company's adjusted net loss (see the Company's MD&A for a reconciliation) to $3.0 million, or $0.13 per share, in the third quarter of 2014 compared with an adjusted net loss of $6.8 million, or $0.44 per share, in the third quarter last year. Cost reductions were successful in mitigating the impact on earnings of the lower revenue compared with the prior year period.

Lombardo Paredes Arenas, Chief Executive Officer of Gran Colombia, commenting on the Company's results for the third quarter of 2014, said, "Although we are continuing to make progress in the improvements in the mines at Segovia, we are finding that it is going to take more time than previously expected to complete the mechanization and realize the full benefits of our mine development program. As such, our third quarter production at Segovia did not meet our expectations. In light of the impact on our operating cash flow of the lowered gold production forecast for the balance of this year and next year, together with the current gold price environment, we have engaged advisors to assist us in the evaluation of options to address our liquidity given the debt service requirements of our senior debt and funding necessary to complete the Pampa Verde project through the end of 2015."

Financial and Operating Summary

A summary of the financial and operating results for the third quarter and nine months of 2014 and 2013 is as follows:

Segovia Operations

The Segovia Operations produced 18,479 ounces of gold in the third quarter bringing total gold production for the first nine months of 2014 to 52,079 ounces. The Company is continuing its program to open access to other levels and to develop additional stopes in the mines, with focus on the Providencia, Sandra K and El Silencio mines at the present time. Construction of internal ramps within the mines is also underway to improve efficiency through mechanization of material handling, introducing scoops and jumbos into the mining process. However, the pace of development is being challenged by historical limitations in the mines' infrastructure which create bottlenecks in material handling while both production and development activities are being undertaken simultaneously. Hoisting equipment and other material handling systems within the mines are still generally in older condition making them susceptible to breakdowns that resulted in some downtime in mining operations in the third quarter of 2014 while repairs were completed. The Company spent approximately $0.9 million in the third quarter on sustaining capital expenditures at the Segovia Operations, an increase in the quarterly run rate over the previous couple of quarters, of which approximately $0.6 million related to machinery and equipment, mainly to address issues within the mining operations. Consequently, the expected growth in mining tonnages and gold production from the Company-operated mines is taking longer to realize. Through mid-2015, the Company's current mine plan expects a more gradual increase in total monthly gold production to reach the 10,000 ounces per month threshold as development makes further headway, the introduction of mechanization into the mining process continues, and training of the Company's mining personnel in the new mechanized mining practices is completed. Repair and maintenance programs, including the addition of more experienced management personnel, are also being upgraded to reduce the impact of breakdowns on mining operations. In October 2014, the Segovia Operations produced 8,767 ounces of gold, a new monthly best for the mines since their acquisition by the Company in 2010. Total annual gold production from the Segovia Operations is now expected to be close to 77,000 ounces in 2014, increasing to approximately 115,000 ounces in 2015.

Marmato Operations

At Marmato Underground, an increase in tonnes milled in the third quarter of 2014 resulted in an increase in quarterly gold production to 6,187 ounces, bringing the total gold production for the first nine months of 2014 to 17,500 ounces. In October 2014, the mine produced 2,360 ounces of gold and total annual gold production for 2014 is now expected to be close to 23,000 ounces.

Webcast

As a reminder, the Company will host a conference call and webcast on Friday, November 14, 2014 at 9:30 a.m. Eastern Time to discuss the results.

Webcast and call-in details are as follows:

A replay of the webcast will be available at www.grancolombiagold.com from Friday, November 14, 2014 until Sunday, December 14, 2014.

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.