Impact: Neutral
Gran Colombia Gold Corp. announced that it has entered into a letter of intent to divest the Marmato project to Bluenose Gold Corp. The proposed acquisition would see Gran Colombia eventually owning 63-66% of the restructured company worth C$62.5M. While this is below our estimated NAV5% value for Marmato of C$250M, it allows the company to monetize the asset and allows the potential expansion of Marmato to be funded outside of the Gran Colombia capital structure. While our estimates are unchanged, should this transaction be completed as proposed it would reduce our NAVPS and EBITDA based fair value estimates; however, our updated estimates for Gran Colombia would still represent a premium to the current share price.
