TORONTO, April 16, 2013 /CNW/ - Gran Colombia Gold Corp. (TSX: GCM) announced today that the cost reduction program initiated in January at its Segovia Operations is already having a positive impact on its all-in sustaining cost per ounce. Cash cost, the primary component of the company's all-in sustaining cost, at the Segovia Operations decreased to an average of $1,337 per ounce for the first quarter of 2013, down from $1,604 per ounce in the fourth quarter of 2012. The company's cost reduction program resulted in $850,000 per month of savings starting in February, with approximately $700,000 directly related to operating costs and the balance to general and administrative expenses. As a result of the realized cost reductions and the improvement in gold production, Segovia's cash cost decreased to $1,164 per ounce in the month of March.
"We are pleased to report a significant improvement in our first quarter cash cost results at Segovia," said Serafino Iacono, Executive Co-Chairman of Gran Colombia. "The actions that we have taken to reduce our cash costs are an important first step in improving our cash margins and we are continuing to identify opportunities for further cost reductions while the Pampa Verde project, that is now underway, will be the foundation of our low cost, modern mining operations in Segovia."
The company also announced today that first quarter 2013 gold production totaled 24,350 ounces, a 10 percent increase compared to the fourth quarter of 2012, as set out below:.
| | Q1 2013 | | Q4 2012 |
| (ounces) | Gold | | Silver | | Gold | | Silver |
| | | | | | | | |
| Segovia Operations | 19,052 | | 27,574 | | 16,817 | | 25,081 |
| Marmato Operations | 5,298 | | 9,854 | | 5,299 | | 7,918 |
| | | | | | | | |
| Total | 24,350 | | 37,428 | | 22,116 | | 32,999 |
Gold production at the Segovia Operations was up 13 percent from the fourth quarter of 2012. With the resolution of the power disruptions that had adversely impacted the fourth quarter, the company successfully increased tonnes processed by approximately 8 percent from the previous quarter to an average of 918 tonnes per day ("tpd") for the first quarter of 2013. In the month of March, the daily rate averaged 1,033 tpd. Although head grades at the Segovia Operations were similar in the first quarter of 2013 to the previous quarter, gold production at the Segovia Operations also benefitted from an improvement in mill recovery to 83 percent, up from 76 percent in the previous quarter. Mine development work is continuing at the Segovia Operations and the company expects that head grades will begin to show improvement by the end of the second quarter of 2013.
The company expects to report its full financial and operating results for the first quarter of 2013 on or about May 14, 2013.