Impact: Mildly Positive
Gran Colombia released 2020 production guidance for 232-257k oz (100% basis) which reflects the positive momentum from 2019. Guidance was effectively in line with our recently increased production estimates for 2020. As we expected, elevated grades are anticipated to continue at Segovia and operating improvements at Marmato should see production increase (Figure 1). We now model attributable production in 2020 of 242koz at US$693/oz total cash costs (was 237koz at TCC of US$695/oz), and 2020E EBITDA of US$170.8M (was US$167.3M) and FCF (CFO+CFI) of US$57.1M (was US$55.8M). We believe that as Gran Colombia demonstrates the high-grade, long-life potential of Segovia, its shares should materially re-rate.