• Colombia reported its first case of COVID-19 on March 6, 2020. A national quarantine commenced on March 25, 2020.
  • Gran Colombia Gold (“company”, “GCM”) continues to operate its Segovia gold mine with a reduced level of personnel including some remaining isolated employees within its mine camps. Management expects gold production to be approximately 60% – 75% of the target in April.
  • We note that a number of miners around the world have suspended operations due to COVID-19 and withdrawn their 2020 production guidance. Mexico and Peru have suspended all non-essential activities. If and when Colombia imposes such a restriction, GCM will also have to suspend operations.
  • We believe gold producers are probably best positioned in this environment as the current price of gold is up 29% YoY. In the case of GCM, we have lowered our 2020 production forecast by 15%, but our gross profit estimate increased 9% as we raised our gold price forecast from $1,350 to $1,600 per oz for 2020.
  • In 2019, GCM’s gold production was up 10% YoY to 240 Koz (thousand ounces), and beat our 235 Koz forecast. 2019 revenues were up 22% YoY to $326 million (exactly in line with our estimate), and EBITDA was up 43% YoY to $144 million (our estimate was $146 million).
  • The company is in an excellent cash position, with $84 million in the treasury at the end of 2019.

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