GCM Mining Corp. (TSX: GCM) (OTCQX: TPRFF) announced the release of its audited consolidated financial statements and accompanying management’s discussion and analysis for the year ended December 31, 2021. All financial figures contained herein are expressed in U.S. dollars unless otherwise noted. Non-GAAP financial performance measures in this press release are identified with “NG”. For a detailed description of each of the non-GAAP measures used in this press release and a detailed reconciliation to the most directly comparable measure under IFRS, please refer to the Company’s MD&A.
Lombardo Paredes, Chief Executive Officer of GCM Mining, commenting on the 2021 results, said, “In 2021, we accomplished what we set out to achieve last year. We met our production guidance for the sixth consecutive year. Our exploration program at Segovia not only replaced what we mined last year, it contributed to significant increases in our mineral reserves and resources and yielded solid results in our brownfield drilling campaign. We advanced the expansion of our Maria Dama processing plant and we commenced operations at the new polymetallic plant at Segovia. We continued to demonstrate our commitment to ESG in our operations and in the communities in which we work. We strengthened our balance sheet, and through the acquisition of the Toroparu Project in Guyana and the successful Senior Notes issuance, charted a course to grow the Company through diversification. We also returned about $17 million to shareholders through our monthly dividends and NCIB purchases. In the year ahead, we will continue to focus on the execution of our growth plans at both of our cornerstone assets while returning value to our shareholders through our monthly dividends. On behalf of the Board and management, I would like to thank all of our people for making 2021 another successful year for GCM Mining.”
Fourth Quarter and Full Year 2021 Highlights
Selected Financial Information
|Gold produced (ounces)(1)||55,285||57,265||208,817||220,194||239,991|
|Gold sold (ounces)||51,716||52,478||210,042||220,890||233,866|
|Average realized gold price ($/oz sold)(2)||$||1,782||$||1,875||$||1,794||$||1,751||$||1,381|
|Total cash costs ($/oz sold)(2)||821||904||824||768||661|
|AISC ($/oz sold)(2)||1,349||1,382||1,207||1,101||916|
|Financial data($000’s, except per share amounts)|
|Net income (loss)||6,606||(51,275||)||179,968||(27,571||)||(131,164||)|
|Per share – basic||0.07||(0.59||)||2.25||(0.08||)||(2.65||)|
|Per share – diluted||0.07||(0.59||)||1.59||(0.08||)||(2.65||)|
|Adjusted net income(2)||11,710||7,703||71,568||75,942||60,460|
|Per share – basic(2)||0.12||0.15||0.87||1.28||1.22|
|Per share – diluted(2)||0.11||0.13||0.77||1.09||1.04|
|Net cash provided by operating activities||27,413||29,494||80,554||136,378||104,340|
|Free cash flow(2)||12,209||5,828||26,207||73,579||61,675|
(1) Includes production from the Marmato Project up to February 4, 2021, the date of loss of control of Aris.
(2) Refer to “Non-IFRS Measures” in the Company’s MD&A.
|Balance sheet ($000’s):|
|Cash and cash equivalents||$||323,565||$||122,508||$||84,239|
|Gold Bullion (1)||4,479||–||–|
|Senior Notes (2)||300,000||–||–|
|Gold Notes, including current portion – principal amount outstanding (3)||–||35,525||68,750|
|Convertible Debentures – principal amount outstanding (4)||CA18,000||CA20,000||CA20,000|
|Aris Gold Notes, including current portion – principal amount outstanding (5)||–||73,066||–|
(1) Commencing the third quarter of 2021, the Company is maintaining a portion of its liquidity in gold bullion. As at December 31, 2021, the Company had 2,500 ounces in its gold bullion account.
(2) The Senior Notes were issued in August 2021 and are recorded in the Financial Statements at amortized cost. At December 31, 2021, the carrying amount of the Senior Notes outstanding, including accrued interest of $8.1 million, was $294.8 million.
(3) The Gold Notes were recorded in the Financial Statements at fair value and were fully redeemed in September 2021. At December 31, 2020 and 2019, the carrying amounts of the Gold Notes outstanding was $38.5 million and 69.0 million, respectively.
(4) The Convertible Debentures are recorded in the Financial Statements at fair value. At December 31, 2021, 2020 and 2019, the carrying amounts of the Convertible Debentures outstanding were $19.5 million, $28.4 million and $21.1 million, respectively.
(5) The Aris Gold Notes were issued in August 2020 and were recorded in the Financial Statements at fair value. At December 31, 2020, the carrying amount of the Aris Gold Notes outstanding was $73.2 million. The Aris Gold Notes were non-recourse to the Company and were derecognized on February 4, 2021, the date of loss of control of Aris.
After pivoting its focus in 2021 to implement a strategy for growth through diversification, GCM’s outlook for 2022 is centered around its two cornerstone assets, the Segovia Operations in Colombia and the Toroparu Project in Guyana.
At Segovia, the Company has produced a total of 33,658 ounces in the first two months of 2022, up from 30,415 ounces in the first two months of 2021, and its trailing 12-months’ total gold production at the end of February 2022 stood at 209,632 ounces, up about 1.6% over 2021. The expansion of the Maria Dama plant from 1,500 to 2,000 tpd is essentially complete, except for the expansion of the crushing facility that is expected to be completed in the second quarter this year. GCM expects that it will operate the expanded plant at about 85% to 95% of capacity in the second half of 2022, increasing its expected annual production for 2022 to between 210,000 and 225,000 ounces of gold.
GCM spent a total of $45.0 million for sustaining capital expenditures NG, including mine exploration and development, and another $10.9 million on non-sustaining capital expenditures NG, including brownfield exploration, Maria Dama plant expansion and completion of the new polymetallic plant. For 2022, GCM has committed to undertake another robust diamond drilling campaign that will comprise approximately 91,000 meters with up to 52,000 meters of in-mine and near-mine drilling and 15,000 meters of underground in-fill drilling at its four producing mines together with 24,000 meters of brownfield drilling at its high-priority targets within the other 24 known veins it is not currently mining in its Segovia mining title. The Company expects that its sustaining capital expenditures NG in 2022 may range between $50 million to $55 million, including the planned drilling at its four producing mines. Non-sustaining capital expenditures NG in 2022 are expected to total up to $10 million, including the brownfield drilling campaign and expenditures to complete the Maria Dama plant expansion, to upgrade and automate certain components in the polymetallic plant and construct additional warehouse space, to commence construction of its new solar generation project and to implement a new ERP system in the Segovia Operations.
In 2021, GCM completed the updated MRE and a PEA for the development of the Toroparu Project. The Company also commenced various pre-construction activities in 2021, including hiring of the project team and key contractors, preparation of the camp facilities, revamping of the local airstrip to enhance logistics and access to the site, design and civil works related to the camp, road and water management, electrical network design, permitting, design of its initial ESG initiatives and various studies associated with environmental matters at the project site. Following completion of the PEA, the Company immediately commenced activities, including additional infill drilling, to advance the studies for the project to prepare a preliminary feasibility study (“PFS”). The Company is in the midst of a competitive bid process and plans to incorporate a change to contract mining in the PFS that is now expected to be finalized early in the third quarter of 2022, at which point formal construction of the project is expected to commence. The final mining license is also expected to be received in mid-2022. In light of the various pre-construction activities underway, the Company continues to anticipate that production will commence from the Toroparu Project in early 2024.
The Company remains committed to its dividend program at the current monthly rate of CA$0.015 per share and expects to continue to repurchase common shares, within certain price ranges, for cancellation under its NCIB to support continued value creation for its shareholders.
On March 21, 2022, the Company announced it has subscribed to a $35 million 7.5% convertible senior unsecured debenture to be issued by a wholly-owned subsidiary of Aris to pay a portion of the purchase price for the acquisition, through a joint venture company, of a 20% ownership interest in the Soto Norte gold project in Colombia. The issuance of the Aris Debenture is conditional upon closing of the Acquisition by Aris, expected to occur in April 2022, and is subject to the approval of the TSX. The ability of the Company to fully execute its conversion rights under the Aris Debenture is subject to disinterested Aris shareholder approval at its next annual meeting of shareholders.
About GCM Mining Corp.
GCM Mining is a mid-tier gold producer with a proven track record of mine building and operating in Latin America. In Colombia, the Company is the leading high-grade underground gold and silver producer with several mines in operation at Segovia Operations. Segovia produced 206,000 ounces of gold in 2021. In Guyana, the Company is advancing its fully funded Toroparu Project, one of the largest undeveloped gold/copper projects in the Americas, which is expected to commence production of more than 200,000 ounces of gold annually in 2024. GCM Mining pays a monthly dividend to its shareholders and has equity interests in Aris Gold Corporation (44%; TSX: ARIS; Colombia – Marmato), Denarius Metals Corp. (28.6%; TSXV: DSLV; Spain – Lomero-Poyatos and Colombia – Guia Antigua, Zancudo) and Western Atlas Resources Inc. (26%; TSX-V: WA: Nunavut – Meadowbank).
White Gold Corp. (TSX-V: WGO) (OTCQX: WHGOF) (FRA: 29W) is please... READ MORE
Appia Rare Earths & Uranium Corp. (CSE:API) (OTCQX:APAAF) (Ge... READ MORE
Defense Metals Corp. (TSX-V: DEFN) (OTCQB: DFMTF) (FSE: 35D) is pleased ... READ MORE
105,500m of 110,000m Infill and Expansion Drill Program Complete... READ MORE
Including 25.70 g/t Gold, 0.81% Zinc over 1.5 meters HighG... READ MORE
We acknowledge the [financial] support of the Government of Canada.