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Gran Colombia buys stake in Western Atlas, says production up 7% this year

The Canadian company is Colombia’s largest underground gold and silver producer. (Image courtesy of Gran Colombia Gold.)

Canada’s Gran Colombia Gold (TSX:GCM) has bought a 19.89% stake in Western Atlas Resources (TSX-V: WA) as part of its plans to sell assets it used to own in Venezuela.

The Toronto-based miner also reported a gold production increase of 7%, up to 174,754 ounces for the first nine months of the year in relation to the same period in 2018. This brings the company’s production for the 12 months to the end of September to 230,014 ounces, up 6% over 2018’s annual production.

The miner is currently seeking the restitution of mining rights for two concession in Venezuela

The company, Colombia’s largest underground gold and silver producer, intends to spin off its Venezuelan subsidiary, Medoro Resources International, into a separate listed vehicle.

It also said it’s presently seeking the restitution of its mining rights to the Lo Increible 4A and Lo Increible 4B concessions near El Callao, in Venezuela, from the current interim government.

In terms of gold production, Gran Colombia said that based on results to date and expectations for the remainder of the year, the company remained on target to meet its 2019 production guidance of between 225,000 and 240,000 gold ounces.

The miner grabbed headlines earlier this year after increasing the mineral resource and reserve estimate for its Segovia mine, located in the northwestern Antioquia mining district.

Gran Colombia said last month it would spin off its Marmato gold project, in the country’s department of Caldas, into a separate listed company to generate the funding required for ongoing exploration, development of an underground mine and the expansion of operations.

The company is also nearing completion of an underground mine expansion study at Marmato, first announced in 2017, and it expects to file a preliminary economic assessment before the end of the year.