Corporate Presentation January 2017 TSX: GCM January 2017 1 - - PowerPoint PPT Presentation

1 TSX: GCM January 2017

The leading high‐grade gold producer in Colombia

Corporate Presentation

January 2017

2 TSX: GCM January 2017

Forward‐Looking Statements

DISCLAIMER

This presentation contains "forward‐looking information", which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its projects, and, specifically, statements concerning anticipated growth in annual gold production, reduction of cash costs and AISC, future G&A, capex and excess cash flow, interest payments on the senior debt and future purchases and/or redemptions of the senior debt. Often, but not always, forward‐looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward‐looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Gran Colombia to be materially different from any future results, performance or achievements expressed or implied by the forward‐looking statements. Factors that could cause actual results to differ materially from those anticipated in these forward‐looking statements are described under the caption "Risk Factors" in the Company's Annual Information Form dated as of March 30, 2016 which is available for view on SEDAR at www.sedar.com. Forward‐ looking statements contained herein are made as of the date of this presentation and Gran Colombia disclaims, other than as required by law, any obligation to update any forward‐looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or

• therwise. There can be no assurance that forward‐looking statements will prove to be accurate, as actual results

and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward‐looking statements.

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Canadian-listed (TSX: GCM) producer with offices in Toronto/Medellin. Currently the largest underground gold and silver producer in Colombia. Advancing a project to expand and mechanize its high-grade gold and silver mines at its Segovia Operations (~84% of total production). The Marmato Project, one of the Top-20 largest undeveloped global gold deposits, provides significant optionality to gold and silver prices with current resources in excess of 14M ozs of gold and almost 90M

• zs of silver. Deep mineralization holds potential to add resources.

The Zancudo Project, a former high grade producer, provides additional exploration upside. Reduced senior debt by $36M (19%) in 2016 through debt conversions and NCIB repurchases following January 2016 debt restructuring. Annual gold production increased 28% to 149,687 ounces in 2016. AISC (full year average) expected to be US$825 to US$850/oz for 2016 compared with US$863/oz in 2015. Upside in resource expansion and exploration assets. Leading Colombian high-grade underground gold producer.

• undervalued versus peers!

Gran Colombia Gold

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SEGOVIA OPERATIONS

Category Gold Resource (1) (ozs) Grade (g/t) Measured 77,000 25.3 Indicated 351,000 16.8 Inferred 1,298,000 10.5

• High-grade quartz-sulfide veins in historic mining district.
• Over 5 million ounces of gold produced through continuous mining over past 150 years.
• Production increased ~36% to 126,237 ounces of gold in 2016.
• Cash cost(2) averaged US$652/oz in 9M-2016.
• Three active underground mines (31 historic mines) and a substantial land package of ~9,000 hectares. Unique

RPP contract license grants mining rights in perpetuity.

• Currently advancing a project to develop, expand and mechanize underground mining operations. Executing a

10,000 meters drill program that commenced in May 2016 to upgrade and expand resources.

• Local contract cooperative mining model is successfully leveraging artisanal mining capabilities in high-grade

secondary pillar recovery operations and improving environmental management in the area.

• Maria Dama plant has been expanded to handle up to 1,500 tpd.

(1) Based on September 2013 NI43‐101 and updated for production to December 31, 2015. (2) By‐product credit basis. Refer to Company’s MD&A for computation.

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SEGOVIA OPERATIONS

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MARMATO PROJECT

Category Gold Resource (1) (ozs) Gold Grade (g/t) Silver Resource (1) (ozs) Silver Grade (g/t) Measured 1,689,000 1.0 7,832,000 4.8 Indicated 9,912,000 0.9 71,517,000 6.3 Inferred 2,583,000 1.0 9,419,000 3.7

• Mineralization is hosted by sheeted pyrite vein system in dacite to andesite porphyry stocks.
• Mountain of gold in historic mining district.
• Existing underground mining operation with production of 23,450 ozs of gold in 2016.
• Cash cost(2) averaged US$962/oz in 9M-2016.
• Ranked in Top-20 of undeveloped global gold deposits by size.
• Deep zone drilling in 2012 shows that mineralization at Marmato extends at least 800m below the limit of the

current underground mining operation and is still open at depth. Merits further exploration.

(1) Based on August 2012 NI43‐101; updated for production to 12‐31‐2015 and reduction due to 2015 lapse of certain licenses in open pit area. (2) By‐product credit basis. Refer to Company’s MD&A for computation.

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MARMATO PROJECT

Legend

DRILL HOLES AU PPM Pending 0.1 0.1 0.3 0.3 1 1 2.5 > 2.5 BLOCKS AU PPM 0.1 0.1 0.3 0.3 1 1 2.5 > 2.5

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TSX Symbol Exercise Price 12‐31‐2015 01‐20‐2016 Exchange Date 12‐31‐2016 Fully Diluted Shares Common shares GCM 23.7M 113.6M 277.7M 277.7M 2018 Debentures * GCM.DB.U US$0.13 N/A ** $71.2M $49.7M 382.6M 2020 Debentures * GCM.DB.V US$0.13 N/A *** $104.0M $101.2M 778.1M 1,438.4M Warrants GCM.WT.A Unlisted CA$3.25 CA$18.75 4.2M 1.0M 4.2M 1.0M 4.2M 1.0M Options CA$0.17 CA$1.84 11.9M 0.7M

* Amounts shown above for the Senior Convertible Debentures are at Face Value. ** Replaced the US$78.6M Silver Notes due 2018. *** Replaced the US$100M Gold Notes due 2017.

CAPITAL STRUCTURE

Gran Colombia launched Normal Course Issuer Bids on July 21, 2016 to use the sinking funds to repurchase the 2018 and 2020 Debentures on the open market for cancellation. To date, Gran Colombia has repurchased and cancelled a total of US$2.9M principal amount of debentures, reducing its fully diluted shares by 22.4M.

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SENIOR DEBT

• Maturity – January 2, 2020
• Coupon – 6% cash, paid monthly
• Convertible – holder option – US$0.13/ share
• Redeemable/ open market repurchases permitted
• At Maturity – settle in cash
• Senior secured

2020 Debentures (TSX: GCM.DB.V) 2018 Debentures (TSX: GCM.DB.U)

• Maturity – August 31, 2018
• Coupon – 1% cash, paid monthly
• Convertible – holder option – US$0.13/ share
• Redeemable/ open market repurchases permitted
• At Maturity – Company option to settle in shares or in

shares/cash if price < US$0.13/share

• Senior unsecured

Sinking Funds

• 100% of Excess Free Cash Flow
• 75% for 2020 Debentures, 25% for 2018 Debentures
• To fund redemptions, repurchases, maturity

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BOARD & MANAGEMENT

Board of Directors Serafino Iacono Executive Co‐Chairman Miguel de La Campa Executive Co‐Chairman Robert Metcalfe * Lead Independent Director; Lawyer Mark Ashcroft * Mining executive; Professional Engineer Jaime Perez Branger * Managing Director, Blue Pacific Ed Couch * Investor Rodney Lamond * Mining executive; Professional Mining Engineer Ian Mann * Resource sector fund manager Hernan Martinez * Former Colombian Minister of Mines and Energy Mark Wellings * Mining executive; Professional Engineer Key Management Lombardo Paredes Chief Executive Officer Michael Davies Chief Financial Officer Alessandro Cecchi Vice President, Exploration Hector Melendez Mine General Manager, Segovia Operations Gabriel Gaviria Mine General Manager, Mineros Nacionales

* Independent

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2016 OUTLOOK

Priorities

• 1. Monthly interest payments on 2018 and 2020 Debentures.
• 2. Continue implementation of optimized mine plan at Segovia:

– Primary focus on development and mechanization at Providencia; – Secondary focus on development and mechanization at El Silencio; and, – 10,000m drilling program at Segovia to be completed by end of year.

• 3. Improve balance sheet by reducing the working capital deficit.
• 4. Excess free cash flow  sinking funds for 2018/2020 Debentures  NCIBs.

2016 Annual Targets

Latest Guidance Actual Trailing 12 Months as of Q3‐2016 Gold production (ozs) 144,000 – 150,000 (2) 149,687 138,879 Cash cost/oz sold $700 ‐ $720 $699(1) $700 AISC/oz sold $825 ‐ $850 $832(1) $836

(1) 9M‐ 2016 average. (2) Initial guidance was 120,000 to 138,000 ozs.

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Growth in Gran Colombia’s total gold production has been driven by the high‐grade Segovia

• Operations. Marmato has been steady.

Gold Production

RESULTS

AISC (‐23%)

000’s ozs ‐ 15 30 45 60 75 90 105 120 135 150 2013 2014 2015 2016

Segovia Marmato

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Cash Cost Per Ounce (1)

RESULTS

117 89

$400 $600 $800 $1,000 $1,200 2013 2014 2015 LTM

Segovia

2013 2014 2015 LTM

Marmato

$916 15% of 9M‐2016 gold sales US$/oz sold $656 85% of 9M‐2016 gold sales

LTM‐2016 total cash cost for the Company was $700/oz, down from $729/oz in 2015, benefitting from:

• Principal source of Gran Colombia’s gold production is the high‐grade resources at Segovia where the Company has

cut costs and optimized its operating cost structure in recent years.

• Fixed costs on a per ounce basis have decreased as a result of increased production in 2016.
• Devaluation of the Colombian peso in H2‐2015 positively impacted US$ equivalent costs in 2016 vs 2015.

(1) By‐product credit basis. Refer to Company’s MD&A for computation. (2) LTM: latest 12 month ended September 30, 2016

(2) (2)

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All‐In Sustaining Costs (1)

(1) All‐In Sustaining cash cost per ounce includes total cash costs per ounce and adds the sum of G&A, sustaining capital and certain E&E costs and provision for environmental discharge fees. Refer to the Company’s MD&A for computation. (2) LTM: latest 12 months ended September 30, 2016

RESULTS

AISC (‐23%)

US$/oz sold $400 $600 $800 $1,000 $1,200 $1,400 2013 2014 2015 LTM G&A,Sustaining Capex and Other Total Cash Cost $836

Reductions in total cash costs and G&A have been the key to success in reducing AISC to the current level. Anticipate 2016 full year average AISC of $825 to $850 per ounce. (2)

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Gran Colombia’s AISC is well positioned amongst industry peers.

All‐In Sustaining Costs (1)

(1) Nine months 2016 reported results per Q3‐2016 filings; AISC is a common performance measure but does not have any standardized meaning within the industry and therefore its computations may vary between companies.

RESULTS

AISC (‐23%)

US$/oz sold

$0 $200 $400 $600 $800 $1,000 $1,200

IamGold Alamos Gold (TAHOE) Lakeshore Gold Kin Ross Gold Argonaut Gold Kirkland Lake Gold Yamana Gold Goldcorp Gran Colombia Gold Centerra Gold Timmins Gold Guyana Goldfields Barrick Gold New Gold

Cash Cost AISC

$832

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Adjusted EBITDA (1)

RESULTS

(1) Refer to Company’s MD&A for computation. (2) LTM = Latest 12 months ended September 30, 2016.

$‐ $10 $20 $30 $40 $50 $60 $70 2013 2014 2015 LTM (2) $59.6M $38.4M US$M

Improved production together with reductions in total cash costs and G&A have been the key to our success in increasing Adjusted EBITDA.

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Excess Cash Flow

RESULTS

(1) As defined in the Indentures (available on the Company’s web site) for the 2018 and 2020 Debentures.

‐10 10 20 30 40 50 Excess Cash Flow (1) Other obligations Local debt repayments Debt restructuring costs Payables reduction Receivables and inventories Equity, wealth & income taxes Interest paid, net Capex Adjusted EBITDA

$2.3M

US$M

9M‐2016

$49.6M

Adjusted EBITDA has been used in 2016 in accordance with Gran Colombia’s Priorities: to meet interest

• bligations related to its Senior Debt, to invest in its

Segovia Operations and to improve its working capital deficit. The Excess Cash Flow generated has been deposited to the Sinking Funds and used to repurchase Senior Debt for cancellation under the NCIBs.

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RELATIVE PERFORMANCE

Relative Performance Since January 1st 2016 (%)

Chart data as at January 9, 2017 Source: Bloomberg

(100.0%) (50.0%) 0.0% 50.0% 100.0% 150.0% 200.0% 1-Jan-16 31-Jan-16 1-Mar-16 31-Mar-16 30-Apr-16 30-May-16 29-Jun-16 29-Jul-16 28-Aug-16 27-Sep-16 27-Oct-16 26-Nov-16 26-Dec-16 Gold Spot $/Oz Silver Spot $/Oz GCM GDX GDXJ 87.2% 63.7% 19.9% 11.3% (23.1%)

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VALUATION OPPORTUNITY

Undervalued Compared to Peer Group – Significant Upside Opportunity

GCM GCM GCM

Peer Group

0.2x 3.1x 4.1x $1,392/oz $2,662/oz 0.7x

Price / NAV EV / EBITDA (2017e) EV / Production (2017e)

Peer Group Peer Group Market data as at January 6, 2017. Peer Group comprises 14 junior gold producers. “Peer Group” amounts represent Median values. GCM has not provided guidance yet for 2017. “GCM 2017e” represent GMP Equity Research estimates. Source: FactSet, Bloomberg, equity research and company disclosure. NAV per GMP Equity Research.

GCM

Peer Group

Price / CFPS (2017e)

0.8x 6.0x

20 TSX: GCM January 2017 For Further Information, Contact: Mike Davies Chief Financial Officer (416) 360‐4653 investorrelations@grancolombiagold.com

Town of Segovia