Gran Colombia Announces Signing of Mandate Letter for US$100 Million Gold Participating Term Loan with Standard Bank

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[{"type":"text","content":"\n\n\n\n\n\nTORONTO, Dec. 20, 2011 /CNW/ - Gran Colombia Gold Corp. (TSX: GCM) announced today that, further to its announcement on December 12, 2011\n that GMP Securities L.P. had been retained to assist the Company in the\n evaluation of several debt financing alternatives, it has signed an\n exclusive mandate letter with Standard Bank Plc, in conjunction with\n Pareto Commodities LLC, for the arrangement of a US$100 million senior\n secured term loan facility (the \"Facility\") to fund the Company's plan\n to increase production at its Segovia Operations through the\n development of a new mechanized mining operation and the acquisition of\n a new 2,500 tonnes per day mill in addition to its expanded Maria Dama\n mill.\n\n\nMaria Consuelo Araujo, Chief Executive Officer of the Company,\n commented: \"We are very pleased to be working with Standard Bank. Its\n Facility will provide Gran Colombia with the funding required to\n accelerate the growth at our Segovia Operations at a prudent cost of\n capital (approximately 12-13%), third party validation of our Segovia\n assets and a clear path to the next stage of the Company's evolution.\n Standard Bank has an unparalled reputation in executing debt financings\n in the resource sector.\"\n\n\nThe Facility, expected to close at the end of January 2012, will\n incorporate gold price participation on a total of 150,000 ounces of\n gold production from the Segovia Operations over the five-year term of\n the Facility. This represents only 17% of the Company's total estimated\n gold production from the Segovia Operations over the same five-year\n period. The fully-funded expansion of the existing Maria Dama mill,\n already in process and scheduled to be completed in the first quarter\n of 2012, is expected to almost double gold production from the Segovia\n Operations in 2012 to approximately 130,000 ounces. The expansion of\n mining and milling capabilities with the proceeds of this Facility will\n enable the Company to increase total gold production at Segovia to\n approximately 200,000 ounces annually by 2014 and to reduce long-term\n cash costs below US$900 per ounce.\n\n\nUnder the Facility, Standard Bank will purchase 2,500 ounces of gold per\n month (\"Minimum Production\") from the Company at market prices, subject\n to an agreed upon hedging program. From the monthly proceeds d...

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