The company held a conference call today. It is still available in replay at 855-859-2056 with conference code 40640037.

They did a general update of the company that most here should be aware of already. Some of the new information is that they have decreased their target production for 2012 from 170k ounces to 155k ounces. The reason for this is they are re-evaluating the Zancudo mine and have decided to pull it's production from 2012.

They did confirm that their cost per ounce for the 130k ounces of production at Segovia and 25k ounces at Marmato underground will be between $900-$1000 for 2012 and 2013.

From my calculations, using costs of $1000 and sell price at $1600, they should have a gross profit of 93M or 7.75M per month. The interest only that they have to pay on their loan should be about 8M assuming Libor stays under 1.5% as their interest rate is LIBOR + 6.5%. They will also have a $20M drill program at Segovia to pay for from cash flow. So that would leave them with $65M from cash flow, 100M from the loan and about 50M from cash for a total of 215M-plenty for their 2012 endeavours.

They have declared to be cash flow positive during the month of October and November which is great news.

In Segovia, they are finishing the Maria Dama mill upgrade to 1000 tons per day and this should be completed by the end of March. In October they produced 9445 ounces of gold from a monthly average of 7330 during the last quarter, an increase of 2115 ounces per month.

Their targeted production for 2012 is 10,833 ounces per month, an increase of 1,388 from their October production. They also had cost reduction of $415 per ounce between the 3rd quarter monthly average and October. They are now calling for a further reduction of a little over $100. Seeing how far they have come in both increasing production and decreasing cost in one month, it stands to reason they have a good chance of achieving those goals in 2012.

Segovia currently employs 2000 artisan miners who have been retrained to work for the company and the transition went very well. This experience will serve the company well in Marmato. The company has done 30k meters of drilling at Segovia which they expect to release results in the next 2 weeks. These results will lead to a 43-101 resource estimate in about 1 month. They are now starting an 80k meter drill program in Segovia costing them $20M. The deduction here is that they had some very good drill results and feel comfortable spending alot more money on this project.

They have also increased the long term plans for Segovia from producing 150k per year to 200k ounces per year. This is another statement that supports strong drill results at Segovia. This area has 4 underground mines that average 10g/t. This strong historical grade again supports good drill results potential.

So even discounting Marmato completly, Segovia alone has the potential to command a higher share price. For 2012 assuming gross profit of 93M, deducting interest of 8M, drilling of $20M and corporate expenses of 28M (they were 7M during the 3 quarter so assuming same rate in 2012) would leave us with 37M in earning or 10 cents per share. At a PE of 10 (and this is low considering that we will have our answer for Marmato) then we should be looking at a share price of $1.00 for Segovia alone!

Moving on to Marmato, Serafino Lacono was very specific when answering a question:

It is a MYTH that we are having any issues negotiating with the artisan miners. We have already signed agreements with the largest/most important land owners. The reality is that these artisan miners barely make enough money to survive. We will pay them much more and they will now be provided with benefits, they will work in a safer atmosphere, the environmental aspect will be better as there is currently no monitoring of these miners activity when it comes enviromental protection. He discussed how the town will benefit from this mining activity. He talked about how the different governement levels are not seeing any revenues from the current mining and how they will increase their revenues significantly from this mine. After hearing him, it sure sounded like a win-win-win for everyone involved.

I am sure there will be challenges going forward with this company however, the more I read and listen, the better I feel about them.

Glorieux