Serafino Iacono’s Gran Colombia Gold. (GCM:TSX) announced continued strong production out of its underground operations at Segovia and Marmato in Colombia. The company produced 9,441 ounces of gold and 10,784 ounce of silver in the month of July which brings year-to-date production to a total of 60,942 ounces of gold and 89,201 ounces of silver.
Read: Gran Colombia Announces July 2013 Monthly Production Tops 9,000 Ounces of Gold.
From the release:
Serafino Iacono, executive co-chairman of Gran Colombia, commenting on the production update, said: "This marks the third consecutive month that our total gold production has exceeded 9,000 ounces and over the last five months, we have averaged 9,126 ounces of gold, putting us on an annualized pace of approximately 110,000 ounces. With expected improvements in grades to come from mine development in the fourth quarter at our Segovia operations, we remain on track to meet our 2013 production guidance of 110,000 ounces of gold."
To date, the company has successfully implemented significant cost reductions in its business model that has already resulted in a substantial reduction in all in sustaining cost to about the $1,200-per-ounce level. These actions, coupled with the steady progress in production, are expected to lower the all in sustaining cost to below $1,150 per ounce by the fourth quarter of 2013.
At a current market capitalization of just $26 million, with reduced costs and a rising gold price, Gran Colombia has upside potential at these prices. The company has a potentially vulnerable balance sheet which could be part of the overhang on the stock. The chart isn't pretty but if GCM can continue its restructuring, then the company could be poised for a turnaround and with 15mm shares outstanding, it shouldn't be that hard to move.
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