Gran Colombia Gold Corp. [GCM-TSX; TPRFF-OTCQX] said Monday January 27 that it is raising $40 million from a non-brokered private placement of 7.14 million units priced at $5.60 each. The company said the net proceeds will be used for general working capital and corporate purposes, including repurchases of the company’s listed warrants under its normal course issuer bid.
Each of the private placement units consists of one common share and one common share purchase warrant exercisable into a full common share at $6.50 per share for a period of three years from the date of issuance.
On Monday, Gran Colombia shares eased 2.5% or 15 cents to $5.79. The shares are currently trading in a 52-week range of $3.01 and $5.97.
Gran Colombia is a Canadian-based gold and silver producer with a focus on Colombia, where it is currently the largest underground gold and silver producer in that country, with several underground mines in operation at its Segovia and Marmato operations. The majority of the company’s production comes from the Segovia Operations, which are located in the Segovia-Remedios mining district in Antioquia, roughly 180 km east of Medellin, northwest Colombia. Segovia produced 214,241 ounces of gold in 2019.
The company met its 2019 production guidance by producing 240,000 ounces of gold, an increase of 10% over 2018. That figure includes production from the Marmato assets which are being spun out into a new publicly listed vehicle, to be named Caldas Gold Corp. The existing underground mine at Marmato produced 25,750 ounces of gold in 2019. However, production at Marmato is expected to increase to 150,000 ounces annually between 2024 and 2027.
“We see the increased interest from strategic and institutional investors in Gran Colombia as a continuing endorsement of our successful turnaround of the company and the potential for further appreciation in our share price, which doubled in 2019 and is up by almost 300% over the past three years, as we execute our strategy to unlock value in our portfolio of quality assets,” said Serafino Iacono, Gran Colombia’s Executive Chairman.
“We have ramped up our near-mine and regional exploration programs at our high-grade Segovia Operations for the coming year and we are unlocking value in our Marmato Project through the spin out to Caldas Gold Corp., which we anticipate will be completed within the next couple of weeks.”
Back in November, 2019, Gran Colombia said it had closed a $15 million strategic investment by Bay Street financier Eric Sprott.
The company said Sprott agreed to purchase 3.26 million units of Gran Colombia in a non-brokered private placement at $4.60 per unit. Each unit consists of one common share and one common share purchase warrant exercisable into a full common share at $5.40 per share for a period of four years after the date of issuance.
Proceeds were earmarked for general working capital and corporate purposes.