The big three rating agency said in a statement that the increase was driven by Gran Colombia refinancing its “2020 and 2024 debentures through its $98 million USD senior secured gold-linked notes, the settlement of its 2018 debentures with shares, and an enhanced mine plan at its Segovia operations focused on cost reductions and high-grade ore bodies.”
The combined impact is expected to lead to a better liquidity position, which has allowed the Toronto-based mining firm to invest more in drilling and general business.
Gran Colombia, however, remains vulnerable to weak gold prices and a stronger Colombian peso, in Fitch’s assessment.
The company’s “credit risk lies in 2020 and 2021, with an expected lower production profile and possibility for lower grades,” stated Fitch. “Should lower gold prices and a stronger peso coincide with lower mine output, this would pressure cash flow.”