TORONTO, Nov. 14, 2013 /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 third quarter of 2013.  All financial figures contained herein are expressed in U.S. dollars unless otherwise noted.

Third Quarter Highlights

• Total gold production of 29,186 ounces for the third quarter of 2013, an 8.4 percent increase compared to the third quarter of 2012.  For the first nine months of 2013, the company produced a total of 80,687 ounces of gold and 118,087 ounces of silver, up 2.4 percent and 29.7 percent respectively, over the same period in 2012. With October 2013 gold production of 8,152 ounces, the company is trending toward total gold production of 106,000 to 108,000 ounces in 2013. This gold production update for 2013 takes into account the impact of lower head grades from the contract miners at Segovia in October.
• Revenue of $40.1 million in the third quarter of 2013 reflected the sale of 30,125 ounces of gold at an average realized price of $1,299 per ounce and 39,320 ounces of silver at an average realized price of $21 per ounce.
• Cost reduction initiatives this year have resulted in a 12 percent decrease in total cash costs to $1,127 per ounce of gold in the third quarter of 2013 and a 20.6 percent decrease in all-in sustaining costs¹ (AISC) over the same period to $1,226 per ounce in the third quarter of 2013.  Year to date, the company has implemented total annualized cost savings of $21 million at its Segovia Operations and in general and administrative (G&A) expenses, predominantly through a 38 percent reduction in its work force since the beginning of the year. Some further cost savings are being implemented in the fourth quarter of 2013 that will lower operating costs and bring all-in sustaining costs for the fourth quarter of 2013 down to about $1,200 per ounce.
• G&A expenses decreased to $2.5 million, equivalent to $83 per ounce sold, in the third quarter of 2013. This represents a 30 percent reduction from the first quarter of 2013 and a 40 percent reduction from the third quarter of 2012. The company continues to expect total G&A expenses of $11.5 million for the full year 2013, $5.0 million or 30 percent lower than in 2012.
• An adjusted net loss² of $6.8 million ($0.44 per share) in the third quarter of 2013 compared with an adjusted net loss of $1.6 million ($0.11 per share) in the third quarter of 2012. The adjusted net loss for the first nine months of 2013 was $13.2 million ($0.87 per share) compared with an adjusted net loss of $6.8 million ($0.45) in the same period last year. The increase in the adjusted net loss in the third quarter and first nine months of 2013 over the prior year periods is attributable to the adverse impact of the decline in gold and silver prices in 2013 which has been partially mitigated in 2013 through the company's program to reduce operating costs and G&A.
• Development of the Pampa Verde expansion project at the company's high-grade Segovia Operations has entered the construction phase and remains within its capital budget. At September 30, 2013, the company had $45.8 million of cash in trust to fund the remaining project expenditures and the monthly interest on the Gold Notes through October 2014.

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¹ For 2013, in conjunction with a non-GAAP initiative being undertaken within the gold mining industry, the company has adopted an "all-in sustaining costs" non-GAAP performance measure that the company believes more fully defines the total costs associated with producing gold; however, this performance measure has no standardized meaning. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Refer to page 19 of the company's MD&A for a reconciliation of all-in sustaining costs.

Serafino Iacono, Executive Co-Chairman of Gran Colombia, commenting on the company's third quarter achievements, said, "We continue to focus on reducing our all-in sustaining costs and implementing the actions essential to growing our production, better positioning the company to generate improved cash flow as work continues to bring our high-grade, low-cost Pampa Verde project on-line in the fourth quarter of next year."

Financial and Operating Summary

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

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² "Adjusted net loss" and "Adjusted net loss per share" are non-GAAP measures. Refer to the company's MD&A for a reconciliation of these measures with net loss attributable to shareholders and net loss per share as reported in the unaudited condensed consolidated financial statements.

³ "Total cash costs" are presented on a per ounce sold basis and represent consolidated averages for the company from both the Segovia Operations and Marmato Underground mine. Refer to "Additional Financial Measures" in the company's MD&A.

⁴ "Gross margin" represents total revenues, net of operating costs, production taxes and depreciation, depletion and amortization.

⁵ 2013 includes $45.8 million set aside to pay capital costs of the Segovia expansion and interest on the Gold Notes until October 2014.

⁶ 2013 includes the Silver Notes and Gold Notes at fair values of $77.7 million (principal amount - $78.6 million) and $79.6 million (principal amount - $100.0 million). 2012 includes the Silver Notes at fair value of $65.9 million (principal amount - $78.6 million).

Segovia Operations Update

At the Segovia Operations, the company took further steps in early August to reduce its all-in sustaining cost.  This was achieved through a workforce reduction at the lower grade company-operated mines, decreasing the tonnages processed from these mining areas commencing in mid-August and focusing effort on the ongoing mine development program to access higher grade areas in the Providencia and Sandra K veins.  As a result, head grades in October from the company-operated areas have already shown improvement, averaging 5.3 g/t in the month, and are expected to increase further in 2014.  Gold production in the third quarter benefitted from the recovery of 542 ounces of gold during a five-day period in late August when the Maria Dama plant reduced operations to complete certain annual maintenance procedures, including replacement of the mill liners. Concurrent with the reduction in tonnages from the company-operated mines, the company increased the processing of tonnages from the higher-grade contract mining operators by 15 percent over the second quarter of 2013. As a result, total tonnes processed at the Maria Dama plant fell to 910 tpd in the third quarter but total gold production was up, with head grades increased to an average of 9.4 g/t in the quarter. In October 2013, gold production at Segovia, which had been averaging approximately 7,500 ounces per month over the last seven months, decreased to 6,337 ounces as head grades from the contract miners declined temporarily to about 13 g/t. Consequently, it is expected that total gold production from the Segovia Operations in 2013 will be about 84,000 to 86,000 ounces.

The Pampa Verde Project (PVP) will transform the company's high-grade Segovia asset into a modern, low-cost, underground mining operation.  The PVP includes a new scalable 2,500 tonne per day plant and underground, mechanized mining. Recent progress against key deliverables includes:

• The company has received all of the permits necessary to complete construction of the PVP.
• Construction contractors, their work crews and machinery are on-site and have two, eight-hour shifts working.  Current construction activities are focused on the earthworks at the plant site.
• All of the major equipment for the new processing plant has been purchased and most of it is currently being stored in a local warehouse.
• Mine development work is ongoing.  At the company's Providencia mine, development work has reached level 12 and is approximately 70 meters from level 13, where the initial ore to supply the new Pampa Verde plant will be mined.

Marmato Operations Update

At Marmato Underground, the crusher upgrade was successfully completed in mid-August with minimal disruption on production. Operations remained steady in the third quarter of 2013, with 807 tpd milled at an average head grade of 2.88 g/t and a mill recovery of 88.5 percent, resulting in gold production of 6,079 ounces for the third quarter. In October 2013, the mine produced 1,814 ounces and gold production is expected to reach 22,000 ounces for the full year.

Outlook

In 2013, the company remains focused on the controllable aspects of its cash generation, reviewing all spending to become a leaner organization and to ensure it meets all financial obligations while the PVP at Segovia is being constructed. Taking into account the impact of lower head grades from the contract miners on October's production at the Segovia Operations, total gold production for the company is trending toward 106,000 to 108,000 ounces for 2013.  To date, management has identified and implemented $21 million in annualized cost savings in three phases. Additional cost savings are being implemented in the fourth quarter of 2013 that will lower operating costs and bring all-in sustaining costs for the fourth quarter of 2013 down to about $1,200 per ounce. The company is continuing to evaluate divestiture opportunities for certain non-core assets such as its El Zancudo and Mazamorras exploration properties to bolster its cash position.

Webcast

As a reminder, the company will host a conference call and webcast on Friday, November 15, 2013 at 9:00 a.m. Eastern and Bogota time to discuss third quarter results and provide an operational update.

Webcast and call-in details are as follows:

Live Event link:   http://www.media-server.com/m/p/revo8jd5

A replay of the webcast will be available at www.grancolombiagold.com from Friday, November 15, 2013 until Sunday, December 15, 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 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 statements.

SOURCE Gran Colombia Gold Corp.