Last Friday, we were pleased to report another solid quarter of operating and financial results. In the first quarter, Gran Colombia reported new highs for quarterly revenue and adjusted EBITDA, which led to adjusted net income of $21 million, up 60% over the first quarter last year. Gran Colombia's cash flow metrics also showed significant improvement over the first quarter of last year.

Caldas Gold's first quarterly results as a public company were muddied by the RTO accounting, the recognition of share-based compensation expense for initial grant of long-term incentive plan awards to management and employees and costs incurred to commence the optimization program in the existing upper mining operation. But most importantly though, Caldas Gold is now in operation, and the actions required to achieve the longer-term strategic goals to create shareholder value at Marmato are all underway. Financial results at Caldas Gold are expected to improve as the financial year progresses.

Over the next few slides, we'll take a closer look at the results we reported last Friday.

For the most part, our production in the first quarter of 2020 was solid with Segovia remaining above the 50,000-ounce level for the fifth consecutive quarter, and Marmato came in just under 6,000 ounces for its first quarter. As we announced on April 14, the national quarantine adversely affected our workforce through the first half of the month. And by mid-April, Segovia was back to about 95% of its complement and produced 11,400 ounces of gold in April.

At Marmato, getting access to workers was more of a challenge since the majority of our workers come from outside the municipality of Marmato. As such, the Marmato mine was limited to about 533 tonnes per day of material, about 50% of normal in April, resulting in 1,202 ounces for the month. The situation is improving as we speak, and we are expecting to see improvement in Marmato in May.

At Segovia, we processed an average of 1,284 tonnes per day in the first quarter of 2020 with an average head grade of 14.9 grams per tonne. El Silencio's production was down in the first quarter of this year as head grades in the contract miner areas were lower than the first quarter of last year. Sandra K, on the other hand, has been making a bigger contribution since the middle of last year. The implementation of the national quarantine did place some limitations on our workforce in the final week of the quarter, but we maintained our mill throughput with lower-grade stockpiles available to us on site.

At Marmato, production in Q1 was hampered by a temporary shortfall in explosives in January and also the national quarantine in the final week of March.

In February, we had provided guidance for both operations for 2020. And given that the national quarantine at Colombia is still continuing and although we are in operation, we're waiting until we get more confidence that operations have resumed to full normal before providing an update on this year's annual guidance.

Our quarterly revenue surpassed the $100 million mark for the first time this quarter. The continuing rise in spot gold prices boosted our realized revenue to an average of $1,570 per ounce of gold. We also saw our gold sales volumes in the first quarter pick up the unsold doré from the end of 2019 from the holiday shutdown period at the refinery. With gold prices generally near or above $1,700 per ounce so far in the second quarter, this will help to offset some of the cash flow impact of April's lower production.

Overall, our consolidated total cash cost was $667 per ounce in the first quarter this year, down from $685 in the fourth quarter of 2019 but up from the first quarter of 2019. Two things to note: first at Segovia, the first quarter 2019 cash cost per ounce was lower than typical as a result of the very high-grade material we processed for several weeks at the Providencia mine. Segovia's $607 per ounce cash cost in the first quarter of 2020 is actually an improvement on the cash cost for the final 3 quarters of 2019 and is expected to see further improvement as the Colombian peso continues to hover around the 3,900 level and above relative to the U.S. dollar so far this quarter.

The second thing to note is that Marmato's cash cost in the first quarter of 2020 includes about $70 per ounce related to the implementation of the mine optimization as envisioned in the PEA with additional short-term spending on mine design, mine planning and training as well as incremental operating development to open up areas for production in the transitional zone. The explosives shortfall, which impacted January's production also increased January's fixed costs on a per ounce basis affecting the average for the quarter.

Our all-in sustaining cost decreased to $890 per ounce in the first quarter of this year, and our all-in costs were $978 per ounce. Our all-in costs included an investment in nonsustaining CapEx of $3 million equivalent to about $47 per ounce, to acquire an agricultural operation that resides within our Segovia Remedios title and comprises several farms, including a fruit and ornamental tree nursery, a cacao plantation and a pig farm, all of which Gran Colombia is incorporating in its development of sustainable community programs in its ESG strategy at Segovia. At Marmato, nonsustaining CapEx included $2.6 million to carry out additional drilling at Marmato along with the PFS work.

With gold prices rising further in 2020, you can see that the gap between revenue and all-in costs per ounce widened in the first quarter, a key driver behind our free cash growth.

And with the new high in quarterly revenue in the first quarter of 2020, we also reached a new high in quarterly adjusted EBITDA of $50 million. Our trailing 12 months adjusted EBITDA now stands at about $162 million, about 10% higher than last year. That means we're currently trading at about 1.7x EBITDA in the current market.

Cash flow metrics in the first quarter of 2020 also benefited from the higher gold prices and gold ounces sold. As of the end of the quarter, our trailing 12 months operating cash flow was up about 12% over last year to $115 million, and our trailing 12 months free cash flow was $67 million, up about 11% over last year.

In February, we completed a private placement for about USD 30 million. And on March 31, we used $22 million of the proceeds to redeem 30% of the Gold Notes, bringing their principal outstanding down to about $45 million at the end of the first quarter. Depending on the gold price, we expect to save more than $4 million in debt service over the balance of this year alone with the early redemption.

Gran Colombia's cash position improved to $86 million at the end of March. And together with Caldas Gold's cash of $14 million, our consolidated cash position stood at about $100 million at the end of March. Caldas Gold has no debt. And the quarterly amortizing payment at the end of April has further reduced Gran Colombia's Gold Notes to approximately $41 million outstanding as of today.

With the private placement in February and some warrant conversions, our issued and outstanding common shares now stands at 61.3 million. With warrants options and the convertible debentures, our fully diluted total is about 89.4 million. Like most issuers, we've seen our share price rebound following the mid-March collapse due to the COVID-19 pandemic announcement, and our market cap is currently about $380 million.

Last week, we made a bold move and announced that we had signed an agreement to acquire Gold X, and we were making a proposal to acquire Guyana Goldfields. I'd like to cover some high-level comments over the next few slides as a backdrop as to why we put this M&A transaction into play.

We felt we were uniquely positioned to create a high-growth LatAm-focused intermediate gold producer where value would be created for shareholders of all parties involved. With our proven operating and mine building experience in Latin America and access to one of the largest undeveloped gold deposits in the Americas through Gold X, we saw an opportunity to unlock tremendous synergies by connecting Toroparu with Guyana Goldfields' Aurora project. The vision was the creation of a high-growth intermediate gold producer with several producing mines and 3 major growth projects, significant reserves and resources and a platform to rapidly double our annual production.

Our premise was to unlock immediate and substantial synergies by combining Toroparu's substantial mineral resources with the processing capability at Aurora and be in production within 6 months, more than 2 years ahead of a Toroparu standalone operating scenario. Given our team's prior exploration and mine-building experience in the Venezuelan side of the Guyana greenstone shield, we felt this path would give us time required to study the underground mine at Aurora and develop an appropriate plan to bring it into production and profitability. The payoff with this proposal was a clear pathway to 500,000 ounces of gold a year with the initial increase coming from Toroparu followed by Aurora Underground and later on Marmato.

The proposed transaction was expected to be highly accretive to our combined net asset value based on analysts' consensus values, possibly higher when you factor in where gold is today and would have set us up nicely if gold goes on a run.

And overall, we saw the proposal as a compelling re-rate opportunity where shareholders of all 3 companies were poised to benefit in the appreciation in Gran Colombia stock price.

Now I say all this in the past tense as we've all seen Silvercorp's increased bid over the weekend along with the news of a secret all-cash bid from another party. We're currently digesting the latest development and we still believe wholeheartedly that Gran Colombia's proposal, as presented to the shareholders of Guyana Goldfields, represents the best opportunity to position themselves as part of gold-focused intermediate producer with a proven track record. The Board of Guyana Goldfields has spoken, and now it rests with the hands of the shareholders of Guyana Goldfields to determine what comes next.

We recognize that there may be many questions awaiting us in the Q&A portion of this morning's webcast regarding this proposal. However, let me say upfront that we aren't in a position to say much more at this time out of respect for the rules surrounding these types of processes and not wanting to conjecture on any matters that are not already in the public realm and are already within our scope of knowledge.

So with that being said, John, we'd like to now open the Q&A session.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question is from Sid Rajeev from Fundamental Resource (sic) [Fundamental Research].

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Siddharth Rajeev, Fundamental Research Corp. - Head of Research & VP [2]

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Mike, since you mentioned that you don't want to talk too much about the transaction, do you mind giving us more color on the current capacity of -- I mean operating capacity of Segovia and Marmato and what are they currently operating at?

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Michael Monier Davies, Gran Colombia Gold Corp. - CFO [3]

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The capacity at Segovia is 1,500 tonnes a day. Marmato is at 1,200 tonnes a day. Lombardo, did you want to mention sort of where we are in terms of production at this point with both projects, given the quarantine in Colombia?

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Lombardo Paredes Arenas, Gran Colombia Gold Corp. - CEO [4]

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In Segovia, the capacity, plate capacity of the mill after its expansion if we think on the tonnes per day, with Marmato, it's around 1,200 tonnes per day. And with that, we are planning to produce in Segovia this year around 220,000 ounces of gold.

And in Marmato, we are planning to -- we were planning to produce 35,000 ounces of gold. Of course, the pandemic situation maybe will change that a little bit, but we do not expect that the changes are going to be great. In -- as you know, we are doing a lot of exploration, a lot of exploration in Segovia, and that will put us in much better position this year -- next year to increase the production.

In Marmato, we have the project. It's close to $300 million investment. Its expansion of the upper bank and new mine -- a new mine in Deep Marmato. And the intention is for 2023, we will have capacity in place of 150,000 ounces of gold. That is our plan for Segovia and Marmato.

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Siddharth Rajeev, Fundamental Research Corp. - Head of Research & VP [5]

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Okay. Pretty much every parameter looked good in Q1, except (technical difficulty) expect grades to be this year?

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Michael Monier Davies, Gran Colombia Gold Corp. - CFO [6]

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Sorry, Sid. You blanked out for a second there. Everything looked good except for?

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Siddharth Rajeev, Fundamental Research Corp. - Head of Research & VP [7]

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Except for the head grades at Segovia and the mine...

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Lombardo Paredes Arenas, Gran Colombia Gold Corp. - CEO [8]

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Head grade...

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Siddharth Rajeev, Fundamental Research Corp. - Head of Research & VP [9]

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No, go ahead.

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Michael Monier Davies, Gran Colombia Gold Corp. - CFO [10]

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Yes. As we -- when we gave our initial guidance this year, we said that the grades for Segovia, given the mix of material coming and adding in some additional workplaces, we had guided this year that Segovia's grade was going to be about 13 to 15 grams per tonne. Certainly where we've come in at the first quarter at about 14.9 is in the upper end of that, and we're still holding to our grade expectation for the year.

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Operator [11]

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Our next question is with -- from Derek Macpherson from Red Cloud Securities.

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Derek Macpherson, Red Cloud Securities, Research Division - VP & Equity Research Analyst [12]

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Congratulations on another solid quarter. Looking a little bit ahead and focused on Marmato, obviously, you guys have started to incur some of the costs of the optimization program associated with the PEA. When do you expect to see some of the benefits translate into the operations, I guess, including sort of the impact current of COVID?

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Lombardo Paredes Arenas, Gran Colombia Gold Corp. - CEO [13]

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Well, in Marmato, right now, we are dedicated to implement and recommend -- implement the PEA and further recommendation made by SRK in relation with mine [implementation]. First thing we improve the -- to develop the levels 21 and 22 of the so-called transition zone between the existing mine and the deep [ball] . We are now mechanizing that part of the mine, level 21, 22. We have (inaudible) already in place.

And also in the upper part of the mine, the [over mine] levels 26 to [20], we are applying an optimization program in order to improve the dilution and to get better results in the vein. We are going to start to see real results about that optimization that we are doing probably around June. But the month of May, for example, have been very stormy because you know with the coronavirus situation has created a lot of trouble because much of the mine is in middle of the 3 municipalities, which is far, 30 kilometer, 20 kilometer far from Marmato. And that's created a lot of problems with the (inaudible) of the mayors. We have to get -- to have [transmission] provided. So we have to implement strict -- more than strict protocols to deal with that. So even up today, we have not been able to have the full labor force in place. Up to now, we have only about 25% of the labor force in place. This week, we expect that we are going to incorporate around 75% of the labor force. Let's see.

But to (inaudible), we expect to see the result of our optimization plan in the open mine by June -- June this year.

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Derek Macpherson, Red Cloud Securities, Research Division - VP & Equity Research Analyst [14]

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Okay. That's good. And then my second question relates to obviously you guys have planned a fairly aggressive exploration program at Segovia this year. Maybe give us the timing. Has there been any impact on that because of the coronavirus? And also when do you expect the next exploration update to come out?

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Lombardo Paredes Arenas, Gran Colombia Gold Corp. - CEO [15]

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Well, the coronavirus -- effect of coronavirus in Segovia was difficult in late March and the middle of April. Now in Segovia, we have the operations are about 92%, 94% complete, so 94% of the labor force is in place. We still have some problems with the supervisor of mine (inaudible). We have to fly them from Medellin to Segovia following a strict bio protocol. But I can say that the operations in Segovia are in normal condition. Not a full 100% because the inefficiencies that you have to introduce because of bio-security protocols like social distance, like temperatures, like cleaning, they avoid [cooperation], the people have to enter in the mine in a line, trying to each -- you separate each one. So that introduced some, let's say, problems with the productivity. But for example this month, we are expecting to have -- the month of May, we are expected to have close or around 17,000 ounces of gold.

Exploration, all the 5 rigs that we have in Segovia are operating. The exploration program did not suffer so much, so -- a little bit. In part of April, we had only 3 (inaudible) rigs but was -- by the end of April, we were already in 5 rigs. So we do not expect disruption in our [operation] program in Segovia.

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Michael Monier Davies, Gran Colombia Gold Corp. - CFO [16]

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Okay. I think the only thing to add to that, Derek, is we're not certain yet when the next drill results update will be. It depends on the ability of ourselves to get the assays through the labs, which have been largely shut down during the quarantine.

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Derek Macpherson, Red Cloud Securities, Research Division - VP & Equity Research Analyst [17]

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Okay. All right. But the program itself is only minor -- only has a minor impact. That's great.

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Operator [18]

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(Operator Instructions)

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Michael Monier Davies, Gran Colombia Gold Corp. - CFO [19]

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I have a couple of questions that have come in on the web portal. The first one, how much cash will be generated if all the outstanding debentures, options, warrants would be converted into stock, i.e., the outstanding base going from 61 million to the fully diluted of 89 million?

The convertible debentures would in effect turn into shares, no cash received on that. But on the options and warrants, depending on the exchange rate, would probably be somewhere between USD 60 million and USD 65 million. The prices range from about CAD 2.21 up to CAD 6.50 across the board. So pretty much everything is either in the money or close to the money at this point.

There was a couple of questions related to the takeover bid. Did we say that there was a secret all-cash bid from other company for Guyana Goldfields?

The answer to that is yes, I did say that. We read in the press release on Sunday night that there was an all-cash bid that had come in from another party that hadn't been spoken about previously.

And then a follow-up to that was why have we linked the success of the Guyana Goldfield takeover to the Gold X takeover and vice versa?

The answer to that is we saw that the opportunity to generate the synergies between the companies was mutually exclusive. And we did not want to push forward unless we had both parts of the puzzle to make our plans work.

John, any other questions come in?

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Operator [20]

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No questions at this time.

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Michael Monier Davies, Gran Colombia Gold Corp. - CFO [21]

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All right. Well, we'd like to thank you for joining us this morning. Our contact information is available if you'd like to reach us separately after the meeting. That's great. And we look forward to keeping you up-to-date over the next few months as things unfold in our business. And thank you for taking the time.

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Operator [22]

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Thank you. Ladies and gentlemen, that concludes today's call. Thank you for participating, and you may now disconnect.

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Lombardo Paredes Arenas, Gran Colombia Gold Corp. - CEO [23]

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Thank you.