RC

Gran Colombia Gold Corp.

Gran Colombia is a Canadian-based mid-tier gold producer with its primary focus in Colombia where it is currently the largest underground gold and silver producer with several mines in operation at its Segovia and Marmato Operations. Gran Colombia is continuing to focus on exploration, expansion and modernization activities at its high-grade Segovia Operations.

Gran Colombia Gold (TSX:GCM) – Marmato PEA Delivers Near-Term Benefits + Longer-term Growth

Impact: Mildly Positive
Gran Colombia Gold announced a new PEA for its Marmato project which included a near-term mine plan optimization that should improve cash flow in 2020 (Figure 1), plus a larger longer-term growth project. This strong PEA has increased our 100% post tax value of Marmato by 78% to C$455M (was C$256M); however, the benefit has been largely offset by the announced asset spinout. Consequently, our NAVPS estimate and target are effectively unchanged.

Read More »

Gran Colombia Gold (TSX:GCM) – Firing on all Cylinders; Another Solid Quarter Delivered

Impact: Positive
Gran Colombia Gold reported slightly better than expected third quarter production results (+2%), and much stronger than anticipated Q3 cash balance (+11%). Consequently, robust Q3 financials are projected when reported in mid-November. We continue to view Gran Colombia as a company with significant leverage to the gold price, along with exploration upside. We expect the stock to rerate towards our C$10/sh fair value estimate as Gran Colombia delivers consistent operating improvements QoQ, along with drilling success at Segovia.

Read More »

Q3 Reporting Preview – Precious Metals Miners Poised to Shine with Q3/19 Results

The recent rally in precious metals (gold up 12.7% QoQ and silver up 13.9% QoQ– Figure 2) is going to be reflected in Q3 results when reporting starts for precious metals miners on October 30 (Figure 3). While strong commodity prices have already buoyed stocks, we expect a further rally for producers going into Q3 financial results as strong metals prices should drive Q3 estimates higher, indicating improved QoQ financial performance ahead of results. While we believe all of our producers under-coverage are poised for a strong quarter, our top pick is RNC Minerals (TSX:RNC, FV est. C$1.00) as we expect strong production results to translate into positive operating cash flow for the first time in 2019.

Read More »

Gran Colombia (TSX:GCM) – Another Step Closer to Realizing Value for Marmato

Impact: Neutral
Gran Colombia Gold Corp. announced that it has entered into a letter of intent to divest Marmato project to Bluenose Gold Corp. The proposed acquisition would see Gran Colombia eventually owning 63-66% of the restructured company worth C$62.5M. While this is below our estimated NAV5% value for Marmato of C$250M, it allows the company to monetize the asset and allows the potential expansion of Marmato to be funded outside of the Gran Colombia capital structure. While our estimates are unchanged, should this transaction be completed as proposed it would reduce our NAVPS and EBITDA based fair value estimates; however, our updated estimates for Gran Colombia would still represent a premium to the current share price.

Read More »

Gran Colombia Gold (TSX:GCM) – On Track to Meet 2019 Guidance

Impact: Neutral

Gran Colombia Gold reported August gold production that kept the company on track to meet its annual guidance but suggests that Q3 production may be slightly less than we previously modelled on lower grades. We continue to view Gran Colombia as a company with significant leverage to gold and fundamental catalysts (exploration, operations) that should drive a progressive re-rating to our C$10/sh fair value estimate.

Read More »

Precious Metals Update – Ready, Set, GOLD!

If it looks like a bull market (technical breakout in gold), smells like a bull market (significant negative yielding debt) and feels like a bull market (funds flowing into gold), it must be a bull market. Our analysis shows that equities in smaller sized companies outperform during a bull market. However, not all junior miners are created equal, and we believe there are three keys to picking them.

Read More »

Gran Colombia Gold Corp. (TSX:GCM) – Cost Guidance Lowered; Segovia Ramping Up

Impact: Mildly Positive

Gran Colombia has released Q2/19 financial results on the back of strong operating results that were roughly inline with our forecast. Additionally, after a strong start to the year the company has decreased cost guidance for 2019. We maintain our fair value estimate of C$6.00/sh which is based on US$1,300/ oz Au and highlight that if we were to use US$1,500/oz Au our fair value would increase to over C$9.00/sh.

Read More »

Gran Colombia Gold (TSX:GCM) – Drilling Points to Resource Growth at Segovia

Impact: Mildly Positive

Gran Colombia has released directionally positive drill results from drilling at the three of its core deposits (Providencia, Sandra K and El Silencio) at Segovia. These results suggest the company is poised to increase reserves at what appears to be higher grades. Gran Colombia’s share price performance reflects its significant leverage to the gold price. Our C$6.00/sh fair value estimate is based on US$1,300/oz Au; however, using US$1500/oz it would increase to over C$9.00/sh (Figure 2).

Read More »

How to Play a New Bull Market in Gold

We believe that we are in a new gold bull market, as evidenced by negative real and nominal interest rates and over US$5.5B in funds flowing into physical gold ETFs. Our view is that smaller companies outperform in a bull market. Three keys to look at when investing in junior gold equities include scarcity, catalysts and potential.

Read More »