TORONTO, Jan. 9, 2015 /PRNewswire/ - Gran Colombia Gold
Corp. (TSX: GCM, OTC: TPRFF) announced today that it has missed the
interest payment due December 31,
2014 on its Senior Unsecured Silver-Linked Notes due 2018
(governing the Silver-Linked Notes, the "Silver Note Indenture").
Due to this missed payment, as of January
10, 2015 the Company will default under the terms of the
Silver Note Indenture. The default will arise from the Company's
failure to make the interest payment due on December 31, 2014 within the 10 day cure period
provided in the Silver Note Indenture. The Company has provided the
Trustee, Equity Financial Trust Company, with notice of the
default.
In addition, the Company has not made the interest payment due
December 31, 2014 for the Company's
Senior Secured Gold-Linked Notes due 2017 (governing the
Gold-Linked Notes, the "Gold Note Indenture"), nor does the Company
currently intend to make this payment within the 30 business day
cure period afforded to the Company under the terms of the Gold
Note Indenture. As such, the Gold-Linked Notes will fall into
default at that time and the Company will provide the Trustee with
a notice of default when applicable.
As the Company previously advised shareholders in its financial
statements and MD&A for the quarter ended September 30, 2014, it has significant liquidity
concerns in meeting the debt service requirements associated with
the exercise of the put options under the Gold Notes and the
interest payments associated with both the Gold and Silver Notes.
The Company has engaged GMP Securities L.P. to assist in the
evaluation of its various options to resolve the current situation
and is in the process of developing a plan to move forward. The
Company has also engaged SRK Consulting (U.S.), Inc. ("SRK") to
conduct mine plan optimization with site personnel of the latest
resource model to improve future cash flow. As part of this work,
SRK will also review capital and operating costs associated with
the life of mine plan. The Company will continue to work closely
with these advisors as well as Gold and Silver Noteholders to
resolve the current situation and will announce its strategy
concerning the debt service in due course.
Changes to Executive Compensation
In a continued effort to reduce G&A costs, the Company has
eliminated the deferred portion of executive salaries effective
January 1, 2015. In addition, the
Company has also cancelled the full amount of deferred salaries of
the Company's executives accumulated through December 31, 2014 amounting to approximately
US$612,000, 80% of which pertained to
the Executive Co-chairmen. By eliminating accumulated deferred
payments, the Executive Co-chairmen effectively reduced their
combined 2014 annual salaries by 58% to a total of US$300,000. Effective January 1, 2015, the combined salaries of the
Executive Co-chairmen will be further reduced by 40% to a total of
$180,000.
About Gran Colombia Gold Corp.
Gran Colombia is a
Canadian-based gold and silver exploration, development and
production company with its primary focus in Colombia. Gran Colombia is currently the largest underground
gold and silver producer in Colombia with several underground mines in
operation at its Segovia and Marmato Operations. Gran Colombia is currently advancing a project to
develop a modern, large-scale, gold and silver mine at its Segovia
operations.
Additional information on Gran Colombia can be found on its
website at www.grancolombiagold.com and by reviewing its profile on
SEDAR at www.sedar.com.
Cautionary Statement on Forward-Looking Information:
This news release 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 and reduction of cash costs.
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 31, 2014, which is available
for view on SEDAR at www.sedar.com. Forward-looking statements
contained herein are made as of the date of this press release 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
otherwise. 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.
SOURCE Gran Colombia Gold Corp.