Eric Sprott invests $15M in Gran Colombia

Gran Colombia Gold (TSX: GCM; US-OTC: TPRFF) has raised $15 million from the sale of 3.2 million units at $4.60 per unit to Eric Sprott in a non-brokered private placement.

Each unit consists of one common share and one common share purchase warrant that can be exercised into a full common share at $5.40 per share for four years following the closing date of the private placement.

Proceeds from the private placement will be used for general working capital and corporate purposes.

Gran Colombia is ramping up near-mine and regional exploration programs at its high-grade Segovia operations in Colombia, and plans to drill 70,000 metres over the next 18 months. The Segovia project, 180 km northeast of the city of Medellín, is an operational gold mine in the Segovia-Remedios mining district of Antioquia. The underground mine with a 1,500-tonne-per-day plant produced 193,050 oz. gold at a cash cost of US$623 per oz. last year.

The company is also spinning out its Marmato mine to a separate-listed vehicle, in which the company will maintain a control position in order to fund a major underground mine expansion.

Marmato, 80 km south of Medellin, is located in the department of Caldas. Gran Colombia acquired Marmato in 2011, when it merged with Medoro Resources (TSX: MRS) to create the largest underground gold and silver producer in Colombia. The Marmato mine produced 24,951 oz. of gold at a cash cost of US$1,132 per oz. in 2018.

At press time, Gran Colombia shares were trading at $4.70 per share with a 52-week range of $2.27 to $5.91. The company has 50 million common shares outstanding for a $235-million market capitalization.