Download - Q2 2012 Results and Operaional Update

August 15, 2012 TSX: GCM

Business Update - Maria Consuelo Araujo (CEO)

Q2 2012 Results - Mike Davies (CFO)

Operational Update - Don East (COO)

Q&A

Q2 2012 Results and Operational Update

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This presentation contains "forward-looking information", which may include, but is not limited to, statements with respect to the future financial or operating performance of Gran Colombia Gold Corp and its subsidiaries (“Gran Colombia” or “GCM”) and their respective 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 presentation based on current expectations and beliefs 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.

DISCLAIMER FORWARD-LOOKING STATEMENTS

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BUSINESS UPDATE Maria Consuelo Araujo, Chief Executive Officer

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Corporate

Grow gold production in FY 2012

Q2 Production of 25,607 ounces, +15% vs Q2’11

Now expecting 113,000 to 123,000 oz in FY 2012, increase of 24% to 35% compared to 2011

Close US$100M financing for Segovia expansion

Achieve significant cash flow from mining operations

$7.8M in Q2 & $19.8M YTD, +$14.9M vs 1H’11

Positive Agent of change in our communities

2012 Plan – Progress Q2 2012 BUSINESS UPDATE

Issues Addressed, Next Stage Growth Plans

Underway

DD Progressing, Exploring Options to Expedite

Continued Progress

Ongoing

Q2 PROGRESS

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Segovia

Increase capacity at Maria Dama to 1,500 tpd by 2013

Adding new underground mining equipment and capital development

Begin development of new mechanized mine

Continued exploration with 51,000 m drilling program (Q3 2013)

Marmato

Prefeasibility study

delayed completion to explore impact of deep zone mineralization on options for project development

2012 Plan – Progress Q2 2012 BUSINESS UPDATE

Ongoing

Q3 Start

Basic Eng. Completed, Start Post-Financing

Ongoing

Achieved 1,000 tpd, Addressing Next Phase

Q2 PROGRESS

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Q2 2012 RESULTS

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Mike Davies, Chief Financial Officer


Production 25,607 oz Au, a 15% increase YoY & 21% increase YTD

Revenue US$40.7M, 47% higher than Q2’11

Consolidated Cash Cost US$1,313 per ounce, up 10% QoQ, primarily due to lower recovery rates at Segovia … expecting $1,100 in Q4

Gross margin of US$3.7M - poised to grow as production increases

G&A of $4.2M, includes advisory fees of $0.3M, and $7.8 YTD, a 25% improvement over 2nd Half 2011

Net loss US$13.7M – included US$3.4M impairment charge against Mazamorras, $3.3M Fx loss and $2.9M mark-to-market loss on financial instruments

FINANCIAL RESULTS

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Q2 2012 Highlights


FINANCIAL RESULTS

Gold ounces

Q2 2012 Actual

Q1 2012 Actual

YTD Actual

FY 2012 Target

Segovia

Company Operated 6,804 7,022 13,826

Artisanal 13,805 13,615 27,420

Total Segovia 20,186 20,637 41,247 90-100,000

Marmato 4,997 5,623 10,620 23,000

Consolidated 25,607 26,260 51,867 113-123,000

Segovia production expected to ramp through 2012

Processed average 737 and 792 tonnes per day in June and July

Acceleration of phase 2 of Maria Dama expansion plan underway

Marmato worked through lower grade zones in Q2; expecting 2.9 g/t in 2nd half

Silver production of 28,202 ounces

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Production


FINANCIAL RESULTS

US$

Q2 2012 Actual

YTD 2012 Actual

Q4 2012 Target

FY 2012 Target

Average Gold Price $ 1,623 $ 1,650 $ 1,575 $ 1,600

Segovia

Company Operated $ 1,548 $ 1,439 $ 950 $ 1,200

Artisanal $ 1,212 $ 1,166 $ 1,130 $ 1,160

Total Segovia $ 1,320 $ 1,256 $ 1,050 $ 1,180

Marmato $ 1,288 $1,242 $1,100 $ 1,180

Consolidated $ 1,313 $ 1,256 $ 1,060 $ 1,180

Segovia cash cost per ounce at Company-operated mines will improve 80% growth in tonnes mined expected in 2nd half from Company-operated mines Recovery rate return to ~90% with infrastructure improvements at Maria Dama

Marmato cash cost to improve with return to historical grades of 2.9 g/t

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Cash Cost per Ounce


FINANCIAL RESULTS

US$ (millions) Q2 2012 1st Half 2012

Cash – Opening Balance $ 5.1 $ 20.3

Cash from Mining Operations

$ 7.8 $ 19.8

Other Operating Uses ($ 4.1) $ 3.7 ($ 18.6) $ 1.2

Net Cash from Bank Debt $ 0.9 $ 8.9

Capex and Exploration

Segovia ($ 4.6 ) ($ 9.6 )

Marmato ($ 1.3) ($17.3)

Other Exploration ($ 0.4) ($ 6.3) ($ 1.4) ($ 28.3)

Other Sources $ 0.6 $ 2.0

Cash – June 30, 2012 $ 4.1 $ 4.1

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Cash Flow


FINANCIAL RESULTS

US$ Q2 2012 Q1 2012 YTD 2012 Plan

CAPEX

Segovia - complete Maria Dama expansion, mining equipment, lab & tailings facilities

$ 5M $ 4M $ 9M $ 15 - 20M

Marmato – Pre-Feasibility, social programs, environmental studies & mining titles

$ 1M $ 14M $ 15M $ 19M

$ 6M $ 18M $ 24M $ 34+M

EXPLORATION

Segovia (51,000m drilling campaign) $ 1M $ 1M $ 2M $ 5M

Marmato $ 1M $ 2M $ 3M $ 3M

Zancudo $ 0M $ 1M $ 1M $ 1M

$ 3M $ 4M $ 6M $ 9M

Overall spending plan reduced by ~$13M to reflect lowered production guidance CapEx focus in 2nd half on Segovia Segovia drilling campaign to commence in Q3 2012

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Capex, Exploration

(1)

(2)


OPERATIONAL UPDATE

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Don East, Chief Operating Officer


Produced 20,610 oz in Q2 New mill tested at 1,000 tpd Q2 ore processing averaged 590 tpd June averaged 737 tpd

Cost per ounce $1,320, up 10% in Q2 Recovery rates down 10% in Q2

Advancing upgrades to plant in Q3 and increase production in 2nd half

Expect to grow to 90-100,000 oz in 2012, up 31% to 46% compared to 2011 Expect to average 1,000 tpd in Q4

SEGOVIA

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Q2 Summary

(1) GCM Resource update dated March 5, 2012 & April 15,2012

Category (1) Gold Resource Grade

Measured 136,000 oz 16.1 g/t

Indicated 156,000 oz 9.9 g/t

Inferred 1,138,000 oz 13.6 g/t

Total 1,430,000 oz 13.3 g/t

August 15, 2012 TSX: GCM 14

High Grade, Producing Asset

High-grade mesothermal gold vein system Historic mining site Good understanding of geology Large pool of highly skilled mining professionals

Four operating underground mines Two production streams: internal & 3rd party

miners

SEGOVIA

One of the Top 10 Producing Mines by Grade in the World Source: NRH Research, Global Gold Mines & Deposits 2012 (publically traded companies with deposits greater than one million ounces in all resource categories)


Maria Dama Expansion

Built in 1930s, upgrades in ‘70s & mid-2000s

Ball Mill with 1,500tpd capacity - completed

Current plant capacity estimated at 800-900tpd

Crushing capacity improvements, new Floatation cells & circuit reconfiguration underway

Assay Lab being completed in Q3

Tailings – new Chocho facility will reduce cost from $7 to $2 per tonne

SEGOVIA

Next Steps:

Improved instrumentation & automation

Explore opportunity to process more 3rd party ore (after Pampa Verde comes online)

0

100

200

300

400

500

600

700

800

900

FY'11 Q1'12 April May June July August*

Actual Production

Ave

rage

tp

d

517 509 481

557

737 790 805

* First 2 weeks of August


Pampa Verde Project SEGOVIA

Preliminary capital cost estimates: Processing plant ~$65M Mechanized equipment ~$28M Tailings facility ~$8M Infrastructure ~$1M Mine development ~$12M (yr1-2)

Funded by cash flow from operation and project financing

New mechanized underground mine at Las Verticales vein systems Also provide access to Providencia & El Silencio mines

New Pampa Verde mill with production capacity of 2,500tpd Designed to process all company mined ore

Reduce overall cash cost to below $900 per ounce

Phase 1 basic engineering completed in July 2012

Project finance due diligence underway on $100M facility

EPCM phase to commence with completion of project financing


SEGOVIA Expansion Plan

2012 2013 2014 2015

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New Mill

Chocho Tailings

New PV Tailings

1,000 tpd 1,500 tpd

2,500 tpd

Mining Infrastructure

Crushing, Floatation& Circuit Reconfig

GCM Mechanized Mine at Las Verticales

Expansion of 3rd party mining model

Continue 3rd Party Contractors Grow 3rd Party Model

Assay Lab

New Mill

90 – 100,000 oz 120 – 140,000 oz

Pro

cess

M

ine

G

old

C

apac

ity

Cap

Ex

$50M $90M $40M $15M

Maria Dama

Pampa Verde

Target 200,000 oz Annually


32,000m drilling program completed in 2010-11 MRE resources grew by ~150% to 1.4M oz in all

categories

Only 4 of 20 known structures modelled

51,000m drilling program to expand and upgrade resources is underway in Q3

First phase to upgrade resources with 21,000m in-fill drilling program (Sep’12 to Mar’13) Target to upgrade ~200,000 ounces to Indicated

Second phase, exploration program with 30,000m drilling to extend known structures and investigate new ones (Mar’13 – Dec’13)

Total cost ~$15M

SEGOVIA

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Resource Growth


Summary

High grade, producing asset - Top 10 producing gold mine by grade

Maria Dama expansion plan underway to support 1,500 tpd

Pampa Verde project to grow total production to 200,000 ounces annually

Significant upside for resource expansion with $15M exploration program underway

SEGOVIA


Development potential of 14.4M oz gold deposit Q2 increase in M&I of gold by 18%

to 11.8M oz & silver by 26% to 80.3M oz

Producing 25,000oz gold & 40,000oz silver annually (underground) Produced 4,997oz gold & 8,016oz

silver in Q2 Pre-Feasibility Stage Delayed to explore impact of deep

zone mineralization on options for project development

MARMATO

(1) Marmato Technical Report, dated June 21, 20012, filed August 7, 2012

Category (1) Gold Resource Silver Resource

Measured 1,725,000 oz 8,011,000 oz

Indicated 10,064,000 oz 72,319,000 oz

Inferred 2,588,000 oz 9,429,000 oz

Total 14,377,000 oz 89,759,000 oz

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Q2 Summary

August 15, 2012 TSX: GCM TSX: GCM 21 MARCH 2012

Q&A

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Download - Q2 2012 Results and Operaional Update

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