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Bullboard - Stock Discussion Forum Aris Mining Corp T.ARIS

Alternate Symbol(s):  T.ARIS.WT.A | CLGDF | ARMN | N.AMNG.NT.U

Aris Mining Corporation is a gold producer in the Americas. The Company is engaged in operating two mines with expansions underway in Colombia. The Segovia Operation is located in the Segovia-Remedios mining district in the department of Antioquia, Colombia, approximately 180 kilometers (km) northeast of Medellin. The Segovia Operations comprises four active underground gold mining operations... see more

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Aris Mining Corp > Article!!
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Post by ragnaramandus on Nov 15, 2021 3:48am

Article!!

Gran Colombia Gold's Q3: Important Progress At Toroparu And Marmato

Nov. 14, 2021 12:31 PM ETGran Colombia Gold Corp. (TPRFF)ALLXFWPM16 Comments14 Likes

Summary

  • Gran Colombia Gold produced 49,848 toz gold, at an AISC of $1,218/toz in Q2.
  • The revenues and net income decreased, however, the operating cash flow increased.
  • The polymetallic recovery plant at the Segovia mine should start producing concentrate this quarter.
  • The Toroparu mine is fully financed now, an updated PEA is expected by the end of this year.
  • Aris Gold announced that the Marmato Lower Mine development should start in December, moreover the Marmato resources increased significantly.

 

Two men, two drills

dalomo84/iStock via Getty Images

 

Gran Colombia Gold (OTCQX:TPRFF) released the Q3 2021 financial results. The quarter was weaker than the previous one, as the gold production declined, the AISC increased, and revenues and net income moved in the negative direction too. On the other hand, the operating cash flow increased, and the company released great exploration results from Segovia, as well as Toroparu. Moreover, following the $300 million debt financing, the Toroparu mine construction is fully funded now. And Aris (OTCQX:ALLXF) Gold experienced major progress at the Marmato mine.

 

In Q3, Gran Colombia Gold produced 49,848 toz gold. It is 4.5% less compared to Q2. The decline seems to be even more dramatic in comparison to Q3 2020, but it is important to note that the 2020 numbers include also the production of the Marmato mine. Segovia alone produced 51,555 toz gold in Q3 2020, which is only 3.4% more than in Q3 2021. The Q3 2021 production was negatively affected by a scheduled maintenance shutdown of the plant in July. As a result, the volume of milled ore declined from 143,909 tonnes in Q2 to 136,796 tonnes in Q3. The head grade increased from 12.55 to 12.61 g/t gold, but it was not enough to fully compensate for the decline in throughput rates. However, the management believes that the 2021 production guidance will be met and Segovia will produce 203,000-207,000 toz gold. It means that 51,896-55,896 toz gold should be produced in Q4. In other words, the management believes that Q4 will be the best quarter of 2021.

Gran Colombia Gold - Gold ProductionSource: Own processing, using data of Gran Colombia Gold

As the production volume declined, the volume of sold gold declined too, from 52,838 toz in Q2 to 50,171 toz in Q3. This, along with an increased proportion of material obtained from contract miner and small-scale miners at the Segovia title, pushed the unit production costs higher. The total cash cost increased by 10.1% to $845/toz, and the AISC increased by 10.6%, to $1,218/toz.

Gran Colombia Gold - Production CostsSource: Own processing, using data of Gran Colombia Gold

 

As mentioned above, the gold sales equaled 50,171 toz in Q3, which is 5% less than in Q2. The average realized gold price declined from $1,797/toz to $1,784/toz, or by 0.7%. As a result, Gran Colombia's revenues declined by 5.9%, to $90.7 million. The operating cash flow increased to $26.7 million, well above the Q2 levels. However, when compared to Q3 2020, it declined significantly. Not only due to the divestment of the Marmato mine, but mainly due to the lower gold prices, higher income taxes, and a change in the timing of VAT refund claims remittance that was shifted to H1 2022. The net income declined from $29.8 million in Q2 to $25.3 million in Q3. The EPS declined even more, from $0.41 to $0.26. The reason is simple, the EPS is calculated using the average number of issued and outstanding shares during the quarter, and in late Q2, Gran Colombia completed the acquisition of Gold X Resources. The increased volume of issued and outstanding shares impacted the Q2 average share count only partially, but it fully impacted the average share count in Q3. As a result, the net income decreased only by 15%, while the EPS decreased by 37%.

Gran Colombia Gold FinancialsSource: Own processing, using data of Seeking Alpha and Gran Colombia Gold

In Q3, Gran Colombia's cash position improved significantly. While the company ended Q2 with cash on hand of $57.8 million, it ended Q3 with $329.6 million. The reason is the $300 million debt financing that took place in August. The money should be used for the Toroparu mine development. The total debt increased to $311.6 million, however, the cash on hand grew more than debt, therefore, the net debt declined to -$18 million.

Gran Colombia Gold Debt and CashSource: Own processing, using data of Seeking Alpha and Gran Colombia Gold

 

As the Q3 revenues and operating cash flow were lower in Q3 2021 than in Q3 2020, their TTM values declined. Moreover, Gran Colombia's share price increased by 10.5% compared to the end of Q2. As a result, the valuation metrics increased. Right now, the price-to-operating cash flow ratio stands at 5.35, the price-to-earnings ratio stands at 2.16, and the price-to-revenues ratio stands at 1.15. Despite this growth, Gran Colombia remains very cheap. Especially if one realizes that Toroparu is fully funded and permitted and that Gran Colombia owns 44.3% of Aris Gold that announced that the Marmato Lower Mine development will begin in December, with an average annual production of 165,000 toz gold expected to start in 2024.Gran Colombia Gold ValuationSource: Own processing

The Q3 was pretty eventful for Gran Colombia Gold. As mentioned above, in August, Gran Colombia completed a $300 million senior unsecured notes offering. The notes will mature in 2021 and they bear an interest of 6.875%. The proceeds will be used for the Toroparu project development that should cost $378 million (however, Gran Colombia needs to fund only $272 million, as there is the streaming agreement with Wheaton Precious Metals (NYSE:WPM)). Following the closing of the debt financing, Gran Colombia made an early redemption of the remaining gold-linked notes worth $18 million.

Gran Colombia also announced that in Q3, the polymetallic recovery plant construction was completed and the commissioning is underway. The plant will be recovering zinc, lead, gold, and silver from the tailings at the Segovia mine. First concentrate production is expected by the end of this year.

The drill results released on July 6 have confirmed a 4 km strike length of high-grade structurally controlled gold mineralization at Toroparu. Gran Colombia believes that a high-grade resource amenable to underground mining methods lies at the core of Toroparu. This should help to boost the economics of the project further. An updated Toroparu PEA was originally expected in September, but now it seems that it will be released in December.

 

On July 12, Gran Colombia announced the discovery of two new high-grade gold veins at Segovia. The discovery holes intersected 137.44 g/t gold and 10.1 g/t silver over 0.56 meters, and 93.19 g/t gold over 0.54 meters. The new veins are close to the mine workings of the El Silencio mine (part of the Segovia mining complex).

Gran Colombia also renewed its normal course issuer bid. It is valid until October 19, 2022, and enables Gran Colombia to repurchase and cancel up to 9,570,540 shares (10% of Gran Colombia's issued and outstanding shares).

Aris Gold (44.3%-owned by Gran Colombia Gold) announced that the Marmato Lower Mine development will commence in December. Moreover, according to the new resource estimate, the Marmato measured and indicated resources increased by 42% to 5.8 million toz gold, and inferred resources increased by 18% to 2.6 million toz gold.

TPRFF stock

Source: Trading View

In August, Gran Colombia found a bottom in the $3.5 area and a bullish trend has started. Right now, the share price stands at $4.54 which is above the 10-day as well as the 50-day moving average, close to the upper boundary of the upwards channel and the resistance in the $4.75 area. The gold price back above $1,850/toz provides nice support, and if a positive updated PEA for Toroparu is released in December, it is possible to expect the share price to break not only the $4.75 resistance but also the next one located in the $5.1 area.

What I like about Gran Colombia Gold's Q3:

  • The Toroparu mine is fully financed now.
  • The exploration results from Toroparu and Segovia are very good.
  • The polymetallic recovery plant at Segovia was completed and is being commissioned.
  • Aris Gold announced surprisingly robust growth in the Marmato mine resources.

 

What I don't like about Gran Colombia Gold's Q3:

  • The gold production decreased.
  • The production costs increased.
  • The revenues and net income decreased.
 

My new marketplace service "Royalty & Streaming Corner" will be primarily focused on precious and industrial metals royalty and streaming companies, however, it will include also investment ideas like Gran Colombia Gold. We are starting on December 14! The first 10 annual subscribers will receive a 25% legacy discount!

This article was written by

Peter Arendas profile picture
Peter Arendas
6.43K Followers
I am an associate professor at the University of Economics in Bratislava, Department of Banking and Interna... 

Comment by Wayned52 on Nov 16, 2021 5:59pm
  I was noticing the cost of money for Toropura at 6.875% . Funny how things are relative . Not that many years ago you couldn`t have gotten a house or a car for anything near that interest . Now they give money away but that`s mostly government to big bank . If you can`t pay your Mastercard it`s  21% .    6.675 %  is an exceptional rate for a high risk business like ...more  
Comment by Ronsnepdutch202 on Nov 17, 2021 3:59am
It is amazing how this company is developing itself into a major producer. I really dont understand the current valuation, maybe demographics or investigators did not forget what happened in the past? Ceo is doing a good job and (very) patient investigstors will be rewarded very well in the future. Hope the momentum is here
Comment by Gorilladome47 on Nov 17, 2021 8:59pm
Very valid comments...long time shareholder, new to stockhouse...this stock has definitely been frustrating as a retail investor.  Strange, gold goes up $15 we struggle to keep in the green...frustrating.  When you have lost market confidence in delivering performance, it takes time to get that back.  That is where we are right now....show me money.   I think that reserves ...more  
Comment by fruitvale3067 on Nov 18, 2021 7:53am
Gorilladome47, Here's a canditate for grossly undervalued company. Although it was more grossly undervalued 18 month ago when it's share price was .17 cents. Take a look at ERLFF - Entree Resources. It's associated with the Oyu Tolgi Mine in another geo-political risk country of Mongolia. However they definately have the goods (Gold, Silver and Copper......and I mean a lot of Copper).& ...more  
Comment by tsoprano24 on Nov 18, 2021 9:16am
Fruit, did you see Atico's report. 7 mil+ in net income. GCM remains my top position but atcmf and erlff are in top 10 now and moving up. Copper and gold should have great runs next few years.  T
Comment by Wayned52 on Nov 18, 2021 12:13pm
Hi Tony and Fruit .  I was in on Entree at the very beginning but little did we know Robert Friedland was in the background . Entree pulled some enormous copper holes but as always Friedland crushed the original shareholders .  After he was out of the picture the corrupt Mongolian government kicked us in the balls again and I finally gave up after years .       Now ...more  
Comment by fruitvale3067 on Nov 18, 2021 2:11pm
Wayned, I've been invested in Entree for 3-4 years now and own a lot of shares. Averaged in at about .30 us. So well into the green right now. Sandstorm Gold owns a lot of shares and has accumlated more recently. They think it's worth $2.50-3.00/share Ca. Once the underground gets approved I suspect things will begin to move at a more rapid pace with regards to either a Merger/Buyout or ...more  
Comment by fruitvale3067 on Nov 18, 2021 2:02pm
Tsoprano, I did see the Atico report.....very nice. Not invested their yet but looking ti start a position soon. 
Comment by Gorilladome47 on Nov 18, 2021 2:03pm
Hey thanx for the heads up...I followed Entree years ago.  Yes I totally agree they have the goods but I think the geo political risks there in Mongolia make Columbia look like Little House on the Priaire.  When copper really gets going there in the next few years...that government and others like it will step in with a large footprint and change the dynamics....example, Chile and what ...more  
Comment by likeike on Nov 18, 2021 3:37pm
Gorilladome47 What have I missed? Why is Chile hard to business in? Ike
Comment by Gorilladome47 on Nov 18, 2021 3:44pm
Chile is going through some massive transformations in terms of re wrting their constitituion for example...social disparity, inequality has driven this narrative where the front runner for political elections this nov and dec run off...is huge reformer with priorities of more fair wealth distribution and much higher taxation of mining companies...legilsation that passed the house now in the ...more  
Comment by likeike on Nov 18, 2021 4:25pm
Gorilladome47 you are buying into the scare tactics of the alarmists that get on the media. In actuallity rewriting the constituition is a big deal and especially for how green the new  government is but man the old one had so many provisions under Pinochet that had to  redo it now instead of later. It will probably be delayed for sometime because of the  inexperienced newly ...more  
Comment by Gorilladome47 on Nov 18, 2021 8:45pm
Yes I hear you...a lot of good points.  Gabriel Boric is the real deal...I'm not being influenced by media....my own reading, my own ideas, my own conclusions.  Gabriel Boric is the protest generation leftist movement in the making...if he wins the presidency, which he is projected to, look out.  Granted, I do actually believe that his platform speaks to many good and necessary ...more  
Comment by likeike on Nov 19, 2021 12:35am
Yes I hear you...a lot of good points.  Gabriel Boric is the real deal...I'm not being influenced by media....my own reading, my own ideas, my own conclusions.  Gabriel Boric is the protest generation leftist movement in the making...if he wins the presidency, which he is projected to, look out.  Granted, I do actually believe that his platform speaks to many good and necessary ...more  
Comment by likeike on Nov 19, 2021 10:41am
Chile Election Puts Free Market Model at Mercy of Angry Voters   The vote is shaping up to be a battle between two candidates from opposite ends of the political spectrum -- conservative Jose Antonio Kast and ...more  
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