Gran Colombia Gold produces gold from the Segovia Operations in the Segovia-Remedios mining district of Antioquia in the Segovia Batholith, approximately 220 km NE of Medellin. Some of the mines in this district have been in operation for over 150 years and have produced an estimated 5 million ounces of gold at an average production grade of 9.3 g/t.

The Segovia assets were purchased by Gran Colombia in August 2010 with the proceeds used to fund unpaid and accrued pension liabilities. The Segovia Operations include the El Silencio, Providencia and Sandra K gold mines that had been starved of capital investment and exploration since 1989 when the former owner went into insolvency. It also includes the Las Aves and Poma Rosa Vein Systems (collectively referred to as Las Verticales), where a new mechanized mine will be developed, and the Carla mine, which is approximately 5 kms south east of the town of Segovia.

Since taking control of the assets, Gran Colombia has initiated an extensive exploration and drilling program to identify new resources and to explore new areas of its concession. Simultaneously, the company has undertaken an extensive modernization and upgrade program at the historical mines in order to improve safety and production efficiency. The Company has also commenced a two phased plan to expand gold production at Segovia to 200,000 ounces annually.

Phase one is well underway and involves the modernization and expansion to the existing Maria Dama processing plant. These capital investments, funded from existing cash and cash flow from operations, will improve processing capacity from 517 tpd (in 2011), to 1,500 tpd.

The second phase of the Segovia expansion includes the development of a new, modern mine at Las Verticales and the construction of a new 2,500 tpd processing facility. The required capital investment will be financed by the 100M Gold Linked Note that closed on October 30, 2012.

Gran Colombia Gold’s mining plan at its Segovia Operations is comprised of both company miners and third party contacted miners (also know as Artisanal miners). Under these existing contracts, the Artisanal miners work the Company’s mines and deliver the ore to the Company’s mill for processing. Under this model, Gran Colombia Gold formalizes the Artisanal miners, which provides the miners with health and pension benefits, health and safety training and a safer work environment.

There are significant environmental benefits to the people and the Segovia community because the Gran Colombia Gold operated processing plant eliminates the personal and environment exposure to mercury. With the growth of independently operated ore processors (or entables) that use mercury to extract gold from the ore, this area of Colombia releases an estimated 60 to 100 tonnes of mercury into the environment every year and has the highest mercury pollution per-person in the world ⁽¹⁾.

 ⁽¹⁾ PREVENTING THE NEXT MINAMATA: MERCURY CONTAMINATION FROM SEMI-INDUSTRIAL GOLD MINING IN ANTIOQUIA, COLOMBIA—THE WORLD’S HIGHEST PER CAPITA MERCURY POLLUTER. Authors: VEIGA, Marcello, SIEGEL, Shefa and CORDY, Paul ( N.B.Keevil Institute of Mining Engineering, University of British Columbia, veiga@mining.ubc.ca), SALIH, Ibrahim (Dept of Chemical & Bio-resource Engineering, University of British Columbia), AL-SAADI, Sari (Dept of Geological Engineering, University of British Columbia), CONSOLE, Stephanie (Dept. of Biology, University of Toronto), GARCIA, Oseas, MESA, Luis Alberto, and ROESER, Monika (UNIDO - United Nations Industrial Development Organization, Mercury Project Colombia).