This will include an expansion of operations to incorporate the Deeps mineralisation and the construction of a new processing plant and additional tailings storage facilities to support an increased level of production.
"We are nearing completion of the underground mine expansion study at Marmato. We expect to file a preliminary economic assessment before the end of the year and immediately thereafter proceed with the prefeasibility study. We are excited to be in a position to see a path forward to develop this world class deposit and to begin to get a return on investment for our shareholders," said executive chairman Serafino Iacono.
A proposed mine plan will look to optimize mining activities in the upper existing mine which produces 24,000-to-26,000 ounces a year of gold, to increase production and reduce cash costs starting in 2020. The company plans to concurrently begin development of the Deeps mineralisation underneath the current mine for a modern, mechanised mining operation.
"In evaluating our options to fund the development of the Deeps mineralisation and construct the facilities required to support the expanded mining operations, we have carefully considered the potential impact of any proposed financing on our current capital structure and balance sheet. We have heard from many of our shareholders that they would not be in favour of a highly dilutive equity issue. After working so hard the last few years to strengthen our financial liquidity, we are reluctant to add a significant amount of debt back onto our balance sheet," said Iacono.
Gran Colombia acquired the Marmato deposit in 2011 through a merger with Medoro Resources. The market responded poorly to this merger at the time as this deal paired the high-grade underground gold mining operations at Segovia, Antioquia (through which Gran Colombia is currently producing over 200,000oz/y) with what was then considered the low-grade, disseminated open pit potential of Marmato.
Marmato project hosts 40.7 million tonnes grading 2.9g/t totalling 3.8 million ounces in measured and indicated resources and 52Mt grading 2.5g/t for 4.2Moz in inferred resources.
Shares in Gran Colombia Gold are trading at C$4.65, valuing the company at $228 million.