Galiano Gold Inc. reported its second quarter ("Q2") 2024 production and financial results, as well as a significant increase to the Abore deposit Mineral Reserve estimate (effective June 30, 2024).

Galiano owns a 90% interest in the Asanko Gold Mine ("AGM") located on the Asankrangwa Gold Belt in the Republic of Ghana, West Africa.

During Q2, the Company produced 26,437 gold ounces at all-in sustaining costs ("AISC") of $1,759 per gold ounce sold ("/oz") and generated $9.2 million of operating cash flows from the AGM. 

The Company remains debt-free with $123.0 million in cash, and the strong operating cash flows are supporting the ramp-up of the AGM as the Company executes its return to hard rock mining operations.    

45% increase in Mineral Reserves at Abore to 485,000 ounces

The Company also reported that following a successful infill drilling campaign in 2023 and early 2024, the Proven and Probable Mineral Reserves at the Abore deposit have increased to 11.8 million tonnes ("Mt") at a grade of 1.28 grams per tonne ("g/t") gold, representing an increase of 151,000 ounces (45%) to 485,000 ounces, effective June 30, 2024, when compared to the report titled "NI 43-101 Technical Report and Feasibility Study for the Asanko Gold Mine, Ashanti Region, Ghana" with an effective date of December 31, 2022 ("2023 Technical Report").

These results, in addition to infill and step-out drilling results at other deposits, will be used to update a consolidated AGM Mineral Reserve estimate and an optimised life of mine plan in the fourth quarter of 2024.

Asanko Gold Mine Q2 highlights (100% basis):

After the closing of the transaction with Gold Fields Ltd., the operational and financial results of the AGM have been consolidated into the Company from March 4, 2024, onwards. To enable a comprehensive understanding of the operational performance at the mine asset level, the following highlights for the AGM are presented on a 100% basis for the entire six months ending June 30, 2024.

Safety: There were no lost-time injuries ("LTI"), nor total recordable injuries ("TRI"), recorded during Q2. The 12–month rolling LTI and TRI frequency rates as of June 30, 2024, were 0.15 and 0.60 per million employee hours worked, respectively.

Production performance: Gold production of 26,437 ounces during Q2 and 56,823 ounces year-to-date. Gold production during Q2 was impacted by challenging ground conditions in the upper portion of the Abore pit and heavy seasonal rainfall in Ghana, which impacted fresh ore delivery to the mill such that a greater proportion of lower-grade stockpiles were processed than originally planned. Lower throughput resulting from harder material processed also affected production levels.

Milling performance: Achieved mill throughput of 1.3 Mt of ore at a grade of 0.7 g/t during Q2, with metallurgical recovery averaging 82%. Mill throughput during Q2 was 9% lower than the first quarter of 2024 due to processing harder ore both mined from Abore and stockpiled material that was previously mined from Nkran. Engineering and early earthworks for the installation of a permanent secondary crusher continued during the quarter and are expected to be completed in the first half of 2025.

This circuit upgrade will maintain the plant throughout at 5.8 Mtpa when treating harder ore.

Cost performance: Total cash costs of $1,271/oz and AISC of $1,759/oz for the three months ended June 30, 2024. Year-to-date AISC1 of $1,777/oz.

Revised 2024 guidance: Due to the slower-than-expected ramp-up in mining, coupled with temporary lower mill throughput, the Company is revising full-year production guidance from between 140,000 to 160,000 ounces to between 120,000 and 130,000 ounces. Operating costs are estimated to be in line with previous expectations, however AISC1 guidance per gold ounce sold for 2024 is being revised from between $1,600/oz to $1,750/oz to between $1,975/oz and $2,075/oz. This increase is due to lower expected gold production coupled with investments in additional stripping at Abore.

Cash flow generation: Generated positive cash flow from operations of $9.2 million, with Free Cash Flow1 negative at $4.5 million during Q2 due to investments in waste stripping at the Abore deposit.

Financial performance: Gold revenue of $63.8 million was generated from 27,830 gold ounces sold at an average realized price of $2,292/oz during Q2. Net income of $13.9 million and Adjusted EBITDA1 of $19.3 million during Q2.

Galiano Q2 Highlights:

Robust liquidity: The Company ended the quarter with $123.0 million in cash and cash equivalents and no debt.

Earnings: Net income of $8.8 million or $0.03 per common share during Q2, which included the consolidation of the AGM's financial results for the three months ended June 30, 2024. Adjusted net income1 for Q2 was $7.3 million or $0.03 per common share.

Senior management appointment: Appointed Michael Cardinaels as Executive Vice President and Chief Operating Officer ("COO"), effective September 3, 2024.

The appointment of Mr Cardinaels as the new Executive Vice President and COO is part of the Company's commitment to operational improvements and its overarching strategy to drive growth at the AGM.

Mr Cardinaels brings over two decades of mining sector experience across various commodities, most recently with Perseus Mining Ltd.

"The second quarter of 2024 marked significant progress in advancing mining operations at the Abore deposit, while the Company remained fully funded by operating cash flow," said Matt Badylak, Galiano's President and Chief Executive Officer.

"In addition, the 45% increase in Abore's Mineral Reserves highlights the value that we are beginning to realise beyond the 2023 Technical Report, as well as the prospectivity of our tenements. Although 2024 production and costs have been impacted by a slower-than-expected ramp-up, the growth in Mineral Reserves and resulting investments in stripping during the second quarter will enhance the optimised life of mine plan, resulting in a larger, longer-term net benefit for the Company and its stakeholders.”

“As we continue to generate positive cash flows from operations and maintain a robust balance sheet, Galiano remains uniquely positioned to execute its strategy to become a leading mid-tier gold producer.”

“I am also pleased to be welcoming Michael Cardinaels to the position of Chief Operating Officer at Galiano. Michael has over 20 years of industry experience including significant exposure to mining complex orogenic deposits on the African continent. His technical expertise, energy and enthusiasm will be valued as we continue ramping up production at the AGM."