Gran Colombia Gold Reports First Quarter 2019 Results; Record Quarterly Gold Production Leads to New Highs for Revenue and Adjusted EBITDA

TORONTO, May 15, 2019 - Gran Colombia Gold Corp. (TSX: GCM; OTCQX: TPRFF) announced today the release of its unaudited interim condensed consolidated financial statements and accompanying management’s discussion and analysis (MD&A) for the three months ended March 31, 2019. All financial figures contained herein are expressed in U.S. dollars (“USD”) unless otherwise noted.

Serafino Iacono, Executive Chairman of Gran Colombia, commenting on the Company’s latest results, said, “Our previously reported record quarterly production has translated into some solid first quarter financial results which have started us off well in 2019. New quarterly highs were achieved in revenue and adjusted EBITDA while Segovia’s quarterly cash costs reached a historical low of $570 per ounce sold. Our cash position at the end of March 2019 was $40.2 million, up $4.6 million since the end of 2018, and we continued to pay down our Gold Notes which currently have $78.5 million aggregate principal amount outstanding. Our 2019 drilling campaign at Segovia is moving along well and will be given the intended boost in the second half of this year with the net proceeds of the private placement of convertible debentures completed in April. Our technical studies at the Marmato Project are gaining momentum and we remain on track to complete a preliminary economic assessment later this year. With another 20,472 ounces of gold produced in April, our second quarter is picking up right where we left off in March.”

First Quarter 2019 Highlights

• The Company set a new record in the first quarter of 2019 with total gold production of 60,601 ounces, up 15% over the first quarter of 2018. Buoyed by head grades improving to an average of 18.8 g/t and a 19% year-over-year improvement in tonnes processed, gold production from the Segovia Operations increased to 54,386 ounces in the first quarter of 2019, up 17% over the first quarter last year. With another 20,472 ounces produced in April, the Company’s trailing 12-months’ gold production at the end of April 2019 now stands at 230,283 ounces, above the top end of the Company’s total gold production guidance range for 2019 of 210,000 to 225,000 ounces.
  
• Revenue reached $77.5 million in the first quarter of 2019, up 20% over the first quarter last year, largely driven by the production growth and a modest improvement in realized gold prices to an average of $1,298 per ounce in the first quarter this year despite a 2% year-over-year decline in spot gold prices. Revenue benefitted in the first quarter of 2019 from lower charges in a new refining contract that the Company entered into in January 2019 with an international refinery, saving $20 per ounce sold compared with its previous arrangement. The Company is also being paid faster under the new refining contract, a benefit to operating cash flow and reducing its credit exposure on trade receivables.
  
• Production growth and the increase in head grades were key factors reducing Segovia’s total cash costs ⁽¹⁾ to a historical low of $570 per ounce, bringing the Company’s total cash costs per ounce down to $621 per ounce in the first quarter of 2019 from $670 per ounce in the first quarter last year. All-in sustaining costs (“AISC”) ⁽¹⁾ and All-in costs ⁽¹⁾ in the first quarter of 2019 were $832 per ounce and $843 per ounce, respectively, both down from $920 per ounce in the first quarter last year. For 2019, the Company continues to expect that its total cash costs and AISC averages for the full year will remain below $720 per ounce and $950 per ounce, respectively.
• The Company reported adjusted EBITDA ⁽¹⁾ of $35.3 million for the first quarter of 2019, up 29% over the first quarter last year, bringing the trailing 12-months’ adjusted EBITDA at the end of March 2019 to a total of $110.2 million, up 8% over 2018, driven by production growth and the reduction in total cash costs per ounce sold.
  
• Net cash provided by operating activities in the first quarter of 2019 of $19.8 million, up 56% over the first quarter last year, improved the Company’s Free Cash Flow ⁽¹⁾ in the first quarter of 2019 to $11.3 million compared with $4.5 million in the first quarter last year.
  
• The Company’s balance sheet benefitted from the first quarter of 2019’s operating and financial performance, increasing its cash and cash equivalents to $40.2 million at March 31, 2019 from $35.6 million at the end of 2018. As of May 15, 2019, the aggregate principal amount of Gold Notes issued and outstanding has been reduced through two quarterly repayments in 2019 to $78.5 million, down from $88.3 million at the end of 2018.
  
• On April 4, 2019, the Company closed its bought deal private placement of CA$20.0 million of Convertible Debentures due 2024, adding approximately $13.6 million (after costs and expenses) to its cash position and $14.9 million to its long-term debt. The net proceeds will be used to fund an acceleration of the drilling program at the Segovia Operations over the next two years focused on mineral reserve and resource additions for further production growth and mine life extension.
  
• As of May 15, 2019, the total issued and outstanding common shares of the Company is 48.3 million and after inclusion of the 2024 Warrants, the Convertible Debentures and stock options, the Company’s fully diluted common shares would total approximately 68.0 million.
  
• The Company reported net income for the first quarter of 2019 of $7.9 million, or $0.16 per share, compared with $5.4 million, or $0.25 per share, in the first quarter last year. Adjusted net income ⁽¹⁾ for the first quarter of 2019 was $12.9 million, or $0.27 per share, up from $9.8 million, or $0.46 per share, in the first quarter last year. Improved earnings in the first quarter of 2019 compared with the first quarter last year reflected the significant contribution of Segovia’s operating performance in 2019 on revenues, total cash costs per ounce, adjusted EBITDA and income from operations.
  
• In April 2019, the Company filed an updated NI 43-101 Technical Report for its Segovia Operations which includes an updated Mineral Resource estimate as of December 31, 2018 with 3.5 million tonnes at a grade of 11.8 g/t totalling 1.3 million ounces of gold in Measured and Indicated Resources, up 7% from the previous year. Inferred Resources increased to 3.6 million tonnes at a grade of 10.1 g/t totalling 1.2 million ounces of gold, up 4% compared to the previous year. The Technical Report also includes an updated Mineral Reserve for Segovia with a total of 1.9 million tonnes at an average grade of 11.0 g/t representing 688,000 proven and probable ounces of gold as of December 31, 2018, up 4% compared to the previous year and replacing what the Company mined in 2018.
  
• The Company announced in April 2019 that it had completed its 2018 drilling program at its Marmato Project in mid-March 2019, comprising 24 drill holes totaling approximately 9,460 meters. The 2018 drilling campaign has increased the Company’s confidence in the geological model, extending the Deeps Zone to over 700 meters along strike, with an average width of approximately 165 meters and remaining open at depth and to the east. The 2019 infill drilling campaign, totaling 8,000 meters, started in March 2019 and has been designed to further delineate and extend down plunge the higher-grade zone outlined by the 2018 drilling campaign. It also aims to convert the remaining Inferred Resources within the higher-grade block drilled in the 2018 drilling campaign to Indicated Resources. The results from both the 2018 and 2019 drilling campaigns will be used to refine the current deposit model in conjunction with an updated Mineral Resource estimate to be included in preliminary economic assessment (“PEA”) technical study to be completed later this year.
  
• In February 2019, the Company increased its equity investment in Sandspring Resources Ltd. to approximately 18% and continues to assist Sandspring as it moves toward a feasibility study for its Toroparu Project in the western Guyana gold district and prepares for the eventual commencement of mining operations at the Chicharron Project located within the Company’s mining title at Segovia which it acquired in 2018.
  
• In February 2019, the Company also announced it is ready to re-start its mining project in Venezuela as soon as circumstances allow and is currently readying a separate listed special purpose vehicle it intends to use for the purposes of holding, developing and financing its Venezuelan assets and carrying out its Venezuelan investment strategy when the time comes.

Selected Financial Information

Segovia Operations

At the Segovia Operations, gold production in the first quarter of 2019 reached a new quarterly record of 54,386 ounces, up 17% over the first quarter of 2018. The Company processed an average of 1,112 tonnes per day at its Segovia Operations in the first quarter of 2019, up 19% from the first quarter last year, with an average head grade of 18.8 g/t, up from 16.1 g/t in the first quarter of 2018. The key driver was a 36% increase in high-grade material from the company-operated areas at the Providencia mine which contributed 21% of the total tonnes processed in the first quarter of 2019 at an average head grade of 34.8 g/t, up from 25.4 g/t in the first quarter last year. The Company’s mine development and mechanization in the Company-operated areas of the El Silencio mine have also helped to increase both the tonnes mined and the average head grades from this mine in the first quarter of 2019 compared with the first quarter last year. With another 18,371 ounces of gold produced in April, this brings Segovia’s trailing 12-months’ total gold production at the end of April 2019 to 205,004 ounces, up 6% over 2018’s annual production.

Segovia’s total cash costs decreased to a historical low of $570 per ounce in the first quarter of 2019, down from $616 per ounce in the first quarter last year, benefitting from the increased volume of gold production this year that helped to further reduce its fixed production costs on a per ounce basis. Segovia’s total cash costs per ounce in the first quarter of 2019 also benefitted from the favourable impact of mining higher-grade material in the Company-operated area of the Providencia mine where the incremental production costs associated with the additional gold production attributable to the better grades were much lower.

The Company’s AISC of $832 per ounce for the first quarter of 2019 included $7.2 million of sustaining capital expenditures attributable to the Segovia Operations, the major components of which included (i) $2.1 million for drilling under the Company’s ongoing exploration campaign, (ii) $2.4 million for ongoing mine development, (iii) $1.3 million for the mines including continuation of the ventilation improvements at the El Silencio mine, further infrastructure upgrades at the Providencia mine, and underground equipment and infrastructure improvements at the Sandra K mine, (iv) $0.7 million associated with the expansion of the Maria Dama plant to 1,500 tpd which should be completed in the second quarter this year, together with costs associated with the new filter press, (v) $0.6 million for costs related to the ongoing construction activities at the new El Chocho tailings storage facility, and (vi) $0.1 million associated with the Segovia site facilities.

Marmato Operations

At the Marmato Operations, gold production in the first quarter of 2019 reflected the impact of some recent development work which increased tonnes processed in March 2019 to 1,090 tpd at an average head grade of 2.5 g/t and raised the quarterly processing rate to an average of 1,015 tpd. This brings Marmato’s total production for the first quarter of 2019 to 6,215 ounces, on par with the first quarter of 2018. April’s gold production amounted to 2,101 ounces, bringing Marmato’s trailing 12-months’ total gold production at the end of April 2019 to 25,279 ounces, on par with 2018’s annual production.

Total cash costs per ounce averaged $1,128 per ounce in the first quarter of 2019 compared with $1,141 per ounce in the first quarter last year. The Company is continuing its efforts to reduce the mine’s total cash cost to below an average for the full year below $1,100 per ounce.

The Company’s AISC of $832 per ounce for the first quarter of 2019 included $0.3 million primarily related to mine infrastructure improvements. The Company’s All-in costs of $843 per ounce in the first quarter of 2019 included $0.6 million, equivalent to $11 per ounce sold, of non-sustaining capital expenditures at the Marmato Project in connection with the completion of the 2018 drilling campaign in mid-March and subsequent commencement of the 2019 drilling campaign. The Company remains on track to complete a preliminary economic assessment technical study later this year

Outlook

Through the first four months of 2019, the Company has produced a total of 81,073 ounces of gold and its trailing 12-months’ total gold production at the end of April 2019 stands at 230,283 ounces, above the top end of its guidance range for 2019 of 210,000 to 225,000 ounces of gold for the full year. The Company will continue to monitor its operating performance over the next several months to assess whether a change in 2019’s production guidance is warranted.

The Company has already commenced a 20,000 meters drilling campaign in 2019 at its Segovia Operations focused on step-out drilling at Providencia and Sandra K, deep zone drilling to extend El Silencio another 200 meters below its currently delineated mineral resource, and brownfield drilling on the Cogote vein system. Using the net proceeds from the private placement, the Company will accelerate its ongoing exploration programs at Segovia, including technical and other studies to be carried out over the next approximately six months to identify and prioritize drilling targets followed by a drilling campaign, over and above what is already planned by the Company in 2019 and 2020. The objective of the drilling program is to increase mineral reserves for future production growth and to extend the mine life of the Segovia Operations.

The Company’s total cash cost in the first quarter of 2019 of $621 per ounce sold was better than expected, benefitting from the record gold production at the Segovia Operations. For the full year, the Company is maintaining its initial guidance that total cash costs will average less than $720 per ounce sold for the full year. The Company also expects that with its planned capital investment program in 2019, including the ongoing exploration activities at Segovia, its AISC for the full year will remain below $950 per ounce. Similar to production, the Company will monitor cost performance over the next several months to assess whether a change in 2019’s guidance is warranted.

First Quarter 2019 Results Webcast

As a reminder, Gran Colombia will host a conference call and webcast on Thursday, May 16, 2019 at 9:30 a.m. Eastern Time to discuss the results. Webcast and call-in details are as follows:

A replay of the webcast will be available at www.grancolombiagold.com from Thursday, May 16, 2019 until Friday, June 14, 2019.

About 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.

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 production guidance and anticipated business plans or strategies. 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 27, 2019 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.

For Further Information, Contact:
Mike Davies
Chief Financial Officer
(416) 360-4653
investorrelations@grancolombiagold.com