Gran Colombia Gold (GCM.T) is going big, Executive Chairman Serafino Iacono told me over the phone. “We mine gold in Colombia, but our operations have expanded. As well as gold in Colombia, we are recovering silver, and will have a new plant coming online which will process our tailings and extract lead and zinc as well. Then we have acquired the Toroparu gold and copper property in Guyana, which has almost 11 million ounces of gold and significant copper. So now we are adding diversification with polymetallic and multi-jurisdictional.”
That’s the big picture, meanwhile, Iacono wants to talk about Gran Colombia’s steadily improving operations. “Ten years ago, we produced around 60,000 ounces of gold from our Colombian mines, this year we are on track to produce between 200,000 and 220,000 ounces. The grades in our mines are still good, 13 grams per tonne on average and we are opening new faces in the mines.”
“We just put out exploration results,” said Iacono. In that release, Iacono is quoted as saying, “With the discovery of two additional high-grade veins at the El Silencio mine, close to the mine workings currently in production, we remain confident that we will continue to expand mineral resources and add to the mine life for this operation. These new discoveries are further evidence that our main mines remain under-explored and have the potential to be larger than what we understand today.” In one hole Gran Colombia reported just over half a meter of 137.44 gpt gold and in another half a meter of 93.19 gpt gold.
“These are narrow veins,” said Iacono. “But that is what we mine.”
On the processing side, Gran Colombia is expanding. “We’re increasing our production capacity to 2,000 tonnes per day,” said Iacono. “And in September we’ll be inaugurating our polymetallic concentrate plant. We have been stockpiling tailings for a decade. We know our current process misses about 10% of the gold and 40% of the silver. And we have never tried to recover the zinc and lead.”
Those numbers add up. The main processing facility runs 2,000 tonnes a day and the new facility will process 200 tonnes per day. “We will add to our cash and, from an ESG perspective, remediating the tailings, getting rid of the lead and zinc, just makes sense,” said Iacono. “And money.”
The other production story is that Gran Colombia will begin to operate in Guyana. On June 4, 2021 Gran Colombia announced the completion of a transaction to buy Gold X Mining Corp and acquire that company’s Toroparu Gold Project. Iacono is quoted in that release saying, “With the closing of the Gold X acquisition today, we have created a new mid-tier Latin-American gold producer with a complementary asset portfolio including the world-class, free cash flow generating Segovia Operations located in Colombia and the large, high-growth and substantially de-risked Toroparu Gold Project in Guyana. On a combined basis for Segovia and Toroparu, our measured and indicated gold resources now total 8,778,000 ounces (256.5 Mt grading 1.06 g/t Au) and we have another 4,359,000 ounces of gold in the inferred category (132.6 Mt grading 1.02 g/t Au).”
“We tried for a year and a half to close this transaction,” said Iacono. “It’s almost 11 million ounces of gold, drilled in reserve, it’s there.”
“The drilling at Toroparu shows typical greenstone belt mineralization,” said Iacono. “Millions of little veinlets running 1-1.5 gpt. But we have also seen cigar-shaped intrusives which are 20-30 meters thick and grading 3 to 10 gpt.”
“These go down into “shoots”, and they go deep,” said Iacono.
The market still looks at Gran Colombia as it was ten years ago, a relatively small gold producer with a shaky balance sheet. With the Toroparu Project in Guyana getting started after the study is completed this year, Gran Colombia is on its way to becoming a mid-tier gold producer and a significant polymetallic operator with a solid balance sheet.
Currently Gran Colombia’s shares trade at between $4.50 and $5.00 for a market cap of around $450 million. At current prices, it is paying a monthly dividend, which works out to a yield of ~4% per year. Better than your bank with a lot more upside potential than your savings account.
I own shares in Gran Colombia and have recently doubled my position. Iacono is just that persuasive.