first quarter 2020 resultss21.q4cdn.com/834539576/files/doc_presentations/...mike davies, cfo...

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TSX: GCM OTCQX: TPRFFTSX‐V: CGCMay 19, 2020TSX: GCM OTCQX:TPRFF

First Quarter 2020 ResultsMay 19, 2020

Lombardo Paredes, CEOMike Davies, CFO TSX‐V: CGC

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TSX: GCM OTCQX: TPRFFTSX‐V: CGCMay 19, 2020

Forward‐Looking Statements DISCLAIMER

This presentation contains "forward‐looking information", which may include, but is not limited to, statements with respect tothe future financial or operating performance of the Company and its projects, and, specifically, statements concerninganticipated growth in annual gold production, future cash costs, AISC and All‐in costs, future G&A and capex, free cash flow,future repayments of its gold‐linked notes, the completion of the proposed transactions with Gold X and Guyana Goldfields , theholding of the special meetings of Gran Colombia, Gold X and Guyana Goldfields and other statements that are not historicalfacts. Often, but not always, forward‐looking statements can be identified by the use of words such as "plans", "expects", "isexpected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (includingnegative 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 otherfactors which may cause the actual results, performance or achievements of Gran Colombia to be materially different from anyfuture results, performance or achievements expressed or implied by the forward‐looking statements. Factors that could causeactual 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 30, 2020 which is available for view on SEDAR atwww.sedar.com. Forward‐looking statements contained herein are made as of the date of this presentation and Gran Colombiadisclaims, other than as required by law, any obligation to update any forward‐looking statements whether as a result of newinformation, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. Therecan be no assurance that forward‐looking statements will prove to be accurate, as actual results and future events could differmaterially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance onforward‐looking statements.

All amounts are denominated in U.S. dollars, unless indicated otherwise.

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• RTO completed February 25, 2020• Commenced trading on the TSX‐V on February 28, 2020• 50,495,441 common shares issued and outstanding• Market capitalization – May 15, 2020 of ~CA$93 million.• ~74% owned by Gran Colombia• PFS related to mine expansion in Deeps mineralization on track for mid‐2020• Continuing to drill the Deep Zone; recent discovery of a New Zone.• ESG focus on Health, Education, Community and the Environment.

NEW LISTING The Future of Marmato

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Remote work Providing food and water to the communities

COVID-19 RESPONSE Focus on Staying Safe and Community

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RESULTS First Quarter Highlights

Mine development at Sandra K – July 17, 2014

(1) Refer to the respective Company’s MD&A for computation.

Gran Colombia Gold Caldas Gold

2020 2019 2020 2019

56,247 60,601 Gold production (ozs) 5,901 6,215

$1,570 $1,298 Realized gold price ($/oz) $1,587 $1,296

$667 $621 Cash cost ($/oz) (1) $1,219 $1,133

$890 $832 AISC ($/oz) (1) $1,371 $1,189

$101.0M $77.5M Revenue $10.5M $7.1M

$50.4M $35.3M Adjusted EBITDA (1) $2.1M $0.9M

$24.3M $7.9M Net income (loss) ($17.6M) $0.3M

$0.42 $0.16 Per share ($0.47) $0.01

$21.2M $13.0M Adjusted net income (loss) (1) ($1.3M) $0.4M

$0.37 $0.27 Per share ($0.03) $0.01

$31.8M $19.8M Operating Cash Flow ($0.8M) ($0.1M)

$17.8M $11.3M Free Cash Flow (1) ($4.1M) ($1.0M)

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‐

10

20

30

40

50

60

70

Q1 Q2 Q3 Q4 Q1

Segovia Marmato56k

For the most part, solid Q1‐2020; COVID‐19 national quarantine in Colombia affected final week of March.

In April, produced 11,400 ozs at Segovia and 1,202 ozs at Marmato.

Gold ProductionRESULTSAISC (‐23%

)

000’s ozs

2019 2020

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RESULTS

Segovia• Processed an average of 1,284 tpd at 14.87 g/t in Q1‐2020.• COVID‐19 quarantine affected final week of March – processed lower grade stockpile to compensate for reduced mine feed.Marmato• Mine optimization commenced in Q1‐2020 with focus on opening up the transitional zone.

Production

First Quarter

2020 2019

Gold (ozs)

SegoviaCompany mines

El Silencio 16,827 23,307

Providencia 24,919 25,748

Sandra K 4,544 1,965

Total Company mines 46,290 51,020

Other contract mines 4,056 3,366

Total Segovia Operations 50,346 54,386

Marmato 5,901 6,215

Total Company 56,247 60,601

Silver (ozs) 227,379 198,534

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RevenueAISC (‐23%

)

$‐

$400

$800

$1,200

$1,600

$2,000

$‐

$20

$40

$60

$80

$100

$120

Q1 Q2 Q3 Q4 Q1

Revenue Realized Gold Price

$M

Quarterly revenue in Q1‐2020 surpassed the $100M level for the first time.Realized gold prices averaged $1,570/oz. Gold sales volume of 63,701 ozs (90% Segovia/10% Marmato).

RESULTS

US$/oz

2019 2020

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Total Cash Cost Per Ounce (1)

117

89 $400

$600

$800

$1,000

$1,200

$1,400

Q1 Q2 Q3 Q4 Q1

SegoviaUS$/oz sold

$607

90% of 2020 gold sales

The Company’s Total Cash Cost average was $667/oz in Q1‐2020.

Increase in Marmato’s Q1‐2020 cash cost reflects mine optimization spending.

(1) By‐product credit basis. Refer to Company’s MD&A for computation.

Q1 Q2 Q3 Q4 Q1

Marmato

$1,21910% of 2020 gold sales

RESULTS

2019 2020 2019 2020

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AISC & All‐In Costs (1)

(1) Refer to the Company’s MD&A for computation.

RESULTSAISC (‐23%

)

US$/ozsold

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

Q1 Q2 Q3 Q4 Q1

Cash Cost AISC All‐In Realized Gold Price

Capital allocation continues to be a function of prioritizing investment while strengthening the balance sheet.The gap between Realized Gold Price and All‐in costs is fuelling our Free Cash Flow performance.

2019 2020

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Adjusted EBITDA (1)RESULTS

(1) Refer to Company’s MD&A for computation.

$‐

$400

$800

$1,200

$1,600

$‐

$15

$30

$45

$60

Q1 Q2 Q3 Q4 Q1

Adjusted EBITDA Realized Gold PriceUS$M

Gran Colombia’s leverage to gold prices is apparent through its adjusted EBITDA growth since mid‐2019.

2019 2020

US$/oz

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Cash Flow MetricsRESULTS

(1) Refer to Company’s MD&A for computation.

Gran Colombia’s consolidated Operating Cash Flow and Free Cash Flow in Q1‐2020 reflect a $12M increase in accounts receivable (collected in April) and $7M of income tax payments.

Free Cash Flow in Q1‐2020 also reflects non‐sustaining capex of (i) $3.0 million investment in ESG initiative in Segovia and (ii) $2.6 million for drilling and the PFS at Caldas Gold’s Marmato Project.

0

10

20

30

40

Q1 Q2 Q3 Q4 Q1

Operating Cash Flow Free Cash Flow (1)

$M

2019 2020

13


Cash & Debt (1)AISC (‐23%

)

$‐

$20

$40

$60

$80

$100

$120

$140

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Former Debt Gold Notes Convertible Debentures Cash

$M

2018 2019

Gran Colombia’s balance sheet continues getting stronger each quarter• Early redemption on March 31, 2020 of 30% of the Gold Notes (funded by February 2020 private placement) reduced

debt by ~$19 million and will improve cash flow over the remainder of 2020 by >$4 million.

(1) Aggregate principal amount outstanding.

RESULTS

2020

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CAPITAL STRUCTURE Fully Diluted = ~89.4M shares

WarrantsGCM.WT.B: 11.5 million @ CA$2.21 (2024 expiry)

Unlisted: 3.3 million @ CA$5.40 (2023 expiry)

Unlisted: 7.1 million @ CA$6.50 (2023 expiry)

Stock Options2.0 million @ CA$2.55 to CA$4.05 (2021‐2025 expiry)

Convertible DebenturesCA$20 million @ CA$4.75 (2024 expiry)

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Common Shares

61.3 millionMarket Capitalization (as of May 15, 2020)

CA$380 million

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GRAN COLOMBIA 2.0GLDX‐GUY BIDS

3

Value Creation for All Parties

(1) Based on midpoint of Gran Colombia guidance for Segovia and Marmato (on an attributable basis via 74% ownership in Caldas Gold) and of Guyana Goldfields May 7th

news release. (2) Based on management estimates.

HIGH‐GROWTH, LATAM‐FOCUSED INTERMEDIATE GOLD PRODUCER

• Strong pro forma 2020 production of 275koz(1) with production growth to over 500koz/year(2) through the development of 3 near‐term growth projects:− Toroparu, Aurora Underground and Marmato (via 74% ownership in Caldas Gold)

• Poised to become a consolidator of the Latin American gold sector

UNLOCKS REALIZABLE SYNERGIES IN GUYANA

• Toroparu is ~50km from Aurora optimization opportunity to connect the two sites to utilize existing Aurora infrastructure and significantly reduce upfront capex

• Management estimates potential savings of ~US$200M (including G&A savings) based on latest Toroparu and Aurora technical reports

ENHANCED BALANCE SHEET + ACCESS TO CAPITAL

• US$100M in cash in addition to the financing support provided by Wheaton Precious Metals Corp. to fund development in Guyana

• Caldas Gold currently evaluating financing options for the Marmato expansion ahead of pre‐feasibility study due mid‐2020

HIGHLY ACCRETIVE WITH STRONG

RE‐RATE POTENTIAL

• Transaction is highly accretive to net asset value per share• Strong potential to re‐rate as Gran Colombia enters a new larger peer set due to the resulting benefits of enhanced production, free cash flow and liquidity along with potential increased index inclusion

PROVEN LATAM OPERATING AND MINE BUILDING EXPERIENCE

• Proven experience operating in Latin America • Highly qualified executive team with mine building experience in the Guiana Shield• Demonstrated ability to improve and optimize assets

Source: company filings.

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GRAN COLOMBIA 2.0

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COMBINED COMPANY High Growth Intermediate Gold Producer

>C$640MPro‐Forma Market Cap.

>US$100MPro‐Forma

Cash Balance

3Producing Mines

3GrowthProjects(1)

2.9 MozPro‐Forma

2P Reserves(2,3)

14.3 MozPro‐Forma M&I Resources(2, 3, 4)

9.1 MozPro‐Forma Inferred Resources(2,3,4)

240 kozStandalone 2019A Gold Production

500+ kozTargeted

Future Production(5)

(1) Including Toroparu, Aurora Underground and Marmato (via 74% ownership in Caldas Gold).(2) Derived from Company’s March 30th press release for Segovia; “A Mineral Resource Estimate for the Sulphur Rose Deposit” dated February 14, 2011; “Preliminary Economic Assessment Report Toroparu Gold Project”

dated July 18, 2019; “NI 43‐101 Technical Report Preliminary Economic Assessment Marmato Project” dated February 6, 2020; “Technical Report on the Aurora Gold Mine” dated March 31, 2020.(3) Please see “Cautionary Statement Regarding Technical Information”.(4) Inclusive basis and including resources from 74% Zona Baja and Sulphur Rose.(5) Based on management estimates.Source: Company filings.

COLOMBIA

GUYANA

ProductionDevelopment

ToroparuAurora

Segovia

Marmato (via 74% )

BRAZIL

VENEZUELA

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TSX: GCM OTCQX: TPRFFTSX‐V: CGCMay 19, 2020 7

Unlocks Unique Synergies

The proximity of Aurora and Toroparu provides the unique opportunity to integrate both assets into one operation and realize substantial synergies

Enhanced Scale

Management estimates an integrated operation could support a 15‐year mine life with combined production of 200koz per year with potential to increase to 300koz per year

>11 Moz contained Au M&I(1, 2) resources and 2.2 Moz 2P reserves(1, 2) across Aurora and Toroparu combined

Combined land concession package of 165,000 ha

Capital Synergies & Savings

Toroparu development costs significantly reduced through utilization of existing Aurora facilities and its timeline can be rapidly accelerated

Utilizes Aurora O/P mining fleet, camp, and leach processing facility which removes the need to build a new mill

In turn, integration delivers reduced ramp up and operating risk for Aurora U/G

Mine Planning Optimization

Integrated U/G and O/P significantly reduces ramp up risk

Allows for more conservative U/G mining rates at Aurora while maintaining plant utilization

Operating Cost Synergies

Combine G&A budgets

Shared port and access road maintenance costs

Greater In‐country Presence

Aurora – Toroparu Map

GUYANA CONSOLIDATION

Aurora

Toroparu

~50km

Management Estimates Potential Synergies of

US$200 million

(1) Derived from “A Mineral Resource Estimate for the Sulphur Rose Deposit” dated February 14, 2011; “Preliminary Economic Assessment Report Toroparu Gold Project” dated July 18,

2019; “Technical Report on the Aurora Gold Mine” dated March 31, 2020(2) Please see “Cautionary Statement Regarding Technical Information”.

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Reserves & Resources2P Reserves (Moz) 0.7 ‐‐ 2.2 ‐‐ 2.9M&I (Incl.) (Moz) 1.4 1.5 4.1 7.4 14.3Inferred (Moz) 1.3 2.5 2.2 3.2 9.1

Operating Stats Avg. LOM attributable values from latest technical reports shown2019 PFS 2019 PEA 2020 LOM Plan 2019 PEA

Au Production (koz) 210 86 147 188 500+Cash Costs (US$/oz) $711 $799 $736 $541AISC (US$/oz) $958 $882 $1,043 $780Growth Capex (US$M) ‐‐ $199 $141 $378

210

500+

Segovia Marmato AuroraUnderground

Toroparu Gran ColombiaPost ProjectDevelopment

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PRODUCTION GROWTH Pathway to 500koz of Production

(3) See Segovia PFS.(4) See Marmato PEA.

(5) Based on midpoint of Gran Colombia 2020E guidance.Source: Company filings.

Guyana projects to be integrated and optimized to reduce capex and increase IRR

(2)

(2)

Defined Pathway to Targeted Future Production of 500+ koz

Management is targeting combined production of 200koz per year with

potential to increase to 300koz per year

(5)

(1)

(1)

(via 74% ownership in Caldas Gold)

(1) Based on management estimates.(2) Includes resources from Sulphur Rose. Please see “A Mineral

Resource Estimate for the Sulphur Rose Deposit” dated February 14, 2011; “Technical Report on the Aurora Gold Mine” dated March 31, 2020.

(3) (4)

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TSX: GCM OTCQX: TPRFFTSX‐V: CGCMay 19, 2020 10

TRANSACTION METRICS Highly Accretive to Net Asset Value

Notes: GCM: Based on analyst consensus NAVPS of C$10.40 and FDITM GCM shares outstanding of 77.3M, adjusted to remove current market value of ~19% equity interest in GLDX.GUY: Based on analyst consensus NAVPS of C$1.16 and FDITM GUY shares outstanding of 174.6M.GLDX: Based on 2019 PEA Toroparu NPV5%@ $1,300/oz, adjusted for corporate balance sheet items from latest FY2019 disclosure.Operational Synergies: Based on management estimates.FX Rate: C$1.00 = US$0.72

Total Estimated Corporate NAV(1)

US$M

GCM Net Asset Value/ShC$/sh

~50% Accretive

(1) Analysis excludes transaction costs.(2) Based on pro‐forma FDITM GCM shares of 124.3M.

Source: Street research, company filings.

(2)

US$577M (US$16M)

US$145M

US$495M

US$200M US$1,401M

C$10.40

C$15.70

Less: GLDXEquity Int.

OperationalSynergies

Pro‐FormaGCM

CurrentNAVPS

Pro‐FormaNAVPS

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GRAN COLOMBIA 2.0

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GRAN COLOMBIA 2.0GRAN COLOMBIA 2.0GRAN COLOMBIA 2.0VALUATION Compelling Re‐Rate Opportunity

Current P/NAV ValuationRatio

(1) No analyst coverage; est. NAV based on “Preliminary Economic Assessment Report Toroparu Gold Project” dated July 18, 2019 and

latest FY2019 company disclosure.Source: Street research.

Significant Re‐rate Potential in Addition to Strong NAV Synergies

(1)

Gran Colombia has a significant re‐rating opportunity to establish the company as a leading intermediate gold producer in Latin America

1.2x1.1x

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0.8x 0.7x0.7x 0.7x 0.7x

0.6x 0.6x0.6x 0.5x

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OceanaG

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Eldo

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IAMGOLD

Gold X

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For Further Information, Contact: Mauricio Ostos

Investor Relations(416) 360‐4653

[email protected]

For Further Information, Contact: Mauricio Ostos

Investor Relations(416) 360‐4653

[email protected]@caldasgold.ca

first quarter 2020 resultss21.q4cdn.com/834539576/files/doc_presentations/...mike davies, cfo...

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