Blue Jay Gold Corp. press release
GALIANO GOLD REPORTS Q3 PRODUCTION AND FINANCIAL RESULTS
TSXV - TSX Venture Exchange · Canada
Canada NewsWire
VANCOUVER, BC , Nov. 7, 2024 /CNW/ - Galiano Gold Inc. ("Galiano" or the "Company") (TSX: GAU) (NYSE American: GAU) is pleased to report its third quarter ("Q3") 2024 production and financial results. Galiano owns a 90% interest in the Asanko Gold Mine ("AGM") located on the Asankrangwa Gold Belt in the Republic of Ghana , West Africa .
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All financial information contained in this news release is unaudited and reported in United States dollars.
During Q3, the Company produced 29,784 gold ounces at all-in sustaining costs[1] ("AISC") of $2,161 per gold ounce sold ("/oz"), or approximately $1,513 /oz with the initial stripping at Abore deducted, and generated $24.4 million of operating cash flows while remaining debt free with $120.9 million in cash. Strong operating cash flows continue to support the ramp-up of mining at the AGM's Abore deposit.
Asanko Gold Mine Q3 Highlights (100% basis):
Subsequent to 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. The following highlights for the AGM are presented on a 100% basis for the entire nine months ended September 30, 2024 .
Safety: There were no lost-time injuries ("LTI") and one total recordable injury ("TRI") recorded during Q3. The 12‐month rolling LTI and TRI frequency rates as of September 30, 2024 were 0.00 and 0.30 per million hours worked, respectively. Mining performance : During the quarter, waste stripping activities at Abore continued with 9.7 million tonnes ("Mt") of waste rock mined, while ore tonnes mined from the Abore deposit totalled 0.7 Mt at an average mined grade of 1.1 grams per tonne ("g/t") gold. Mining rates at Abore increased by 32% during the third quarter compared to the second quarter of 2024 due to lower precipitation levels, improved mining equipment productivity and additional mining equipment mobilized. These advancements resulted in Q3 mining rates averaging 113,000t per day compared to 87,000t per day in the second quarter of 2024, marking an approximate 30% increase. Milling performance: Milled 1.2 Mt of ore at a grade of 0.9 g/t during Q3, with metallurgical recovery averaging 91%. Mill throughput during the quarter was 13% lower than the second quarter of 2024 due to harder material processed and lower mobile crushing circuit availability, which combined, resulted in suboptimal, coarser material delivered to the SAG mill. As harder Abore material is treated, it is expected that mill throughput will be directly linked to mobile crusher circuit performance until the new secondary crusher is commissioned in Q3 2025. Engineering and early earthworks for the secondary crusher continued during the quarter. Production performance: Gold production of 29,784 ounces during Q3 and 86,607 ounces year-to-date. Gold production during the quarter was 13% higher than the second quarter of 2024, resulting from higher mined grades at Abore and an increase in the recovery rate from 82% to 91%. Given mill throughput is anticipated to remain constrained by harder material in the fourth quarter, the Company expects meeting the lower end of full year guidance of between 120,000 to 130,000 ounces. Cost performance: Total cash costs 1 of $1,247 /oz and AISC 1 of $2,161 /oz for the three months ended September 30, 2024 . Year-to-date AISC 1 of $1,903 /oz, tracking in line with revised AISC 1 guidance of between $1,975 /oz to $2,075 /oz. Deducting the initial stripping at Abore would result in Q3 2024 AISC 1 of $1,513 /oz and $1,466 /oz year-to-date. Cash flow generation: Generated positive cash flow from operations of $28.6 million and Free Cash Flow 1 of $2.9 million during Q3, despite significant investment in developing the Abore pit. Financial performance: Gold revenue of $71.0 million generated from 29,014 gold ounces sold at an average realized price of $2,446 /oz during Q3. Net income of $3.7 million and Adjusted EBITDA 1 of $25.6 million during Q3.
| | | 1 Refer to Non-IFRS Performance Measures |
Galiano Q3 Highlights:
Robust liquidity: The Company ended the quarter with $120.9 million in cash and cash equivalents and no debt. Earnings: Net income of $1.1 million or $0.00 per common share and adjusted net income 1 of $17.7 million or $0.07 per common share during Q3. Advanced the optimized Life of Mine ("LOM") plan: Progressed technical work related to the optimized LOM plan, in parallel with updated Mineral Reserve and Mineral Resource estimates for the AGM. The updated LOM is focused on earlier mining of the Nkran deposit, compared to the previous technical report (see "NI 43-101 Technical Report and Feasibility Study for the Asanko Gold Mine, Ashanti Region, Ghana " with an effective date of December 31, 2022 ). The optimized LOM plan is expected to be completed early during the first quarter of 2025. Senior management appointment: Appointed Michael Cardinaels as Executive Vice President and Chief Operating Officer, effective September 3, 2024 . Mr. Cardinaels brings over two decades of mining experience across various commodities, most recently with Perseus Mining Ltd. The appointment of Mr. Cardinaels is part of the Company's commitment to operational improvements and its overarching strategy to drive growth at the AGM.
"It was a productive quarter operationally at the AGM, with increased mining rates at Abore resulting in more ore mined and higher grades delivered to the mill," said Matt Badylak , President and Chief Executive Officer of Galiano. "This led to improved recovery and increased production quarter-over-quarter. Although mill throughput will remain constrained until the secondary crusher is operational, the ongoing investments in waste stripping during the third quarter position the Company strongly to ramp up production in 2025."
"Importantly, we maintained positive operational cash flows and closed the quarter with a robust balance sheet, holding over $120 million in cash and remaining debt-free. This financial position gives Galiano the capacity and flexibility to optimize our mine plan and advance mining activities at Nkran. Looking ahead, we are on track to update our global mineral resource and mineral reserve projections and Life of Mine Plan early in the first quarter of 2025."
Asanko Gold Mine – Summary of quarterly operational and financial highlights (100% basis)
Operating and financial results are on a 100% basis for all periods presented to enable comparability with prior quarters.
| Asanko Gold Mine (100% basis) | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | | Mining | | | | | | | Ore mined ('000t) | 670 | 467 | 265 | 22 | - | | Waste mined ('000t) | 9,726 | 7,427 | 4,877 | 3,415 | - | | Total mined ('000t) | 10,396 | 7,894 | 5,142 | 3,437 | - | | Strip ratio (W:O) | 14.5 | 15.9 | 18.4 | 155.2 | - | | Average gold grade mined (g/t) | 1.1 | 1.0 | 0.9 | 0.7 | - | | Mining cost ($/t mined) | 3.52 | 2.98 | 3.63 | 4.30 | - | | Ore tonnes trucked ('000 t) | 665 | 503 | 566 | 657 | 695 | | Ore transportation cost ($/t trucked) | 4.56 | 5.71 | 6.79 | 6.54 | 6.63 | | Processing | | | | | | | Ore milled ('000t) | 1,162 | 1,336 | 1,467 | 1,486 | 1,573 | | Average mill head grade (g/t) | 0.9 | 0.7 | 0.8 | 0.8 | 0.8 | | Average recovery rate (%) | 91 | 82 | 83 | 84 | 87 | | Processing cost ($/t milled) | 12.49 | 11.18 | 10.55 | 9.94 | 9.69 | | G&A cost ($/t milled) | 5.74 | 5.13 | 4.74 | 5.55 | 4.16 | | Gold produced (oz) | 29,784 | 26,437 | 30,386 | 31,947 | 35,779 | | Financials, costs and cash flow | | | | | | | Revenue ($m) | 71.1 | 64.0 | 65.6 | 59.5 | 67.8 | | Gold sold (oz) | 29,014 | 27,830 | 31,840 | 30,555 | 35,522 | | Average realized gold price ($/oz) | 2,446 | 2,292 | 2,056 | 1,942 | 1,902 | | Total cash costs 1 ($/oz) | 1,247 | 1,271 | 1,180 | 1,352 | 1,056 | | All-in sustaining costs 1 ($/oz) | 2,161 | 1,759 | 1,793 | 2,065 | 1,445 | | All-in sustaining margin 1 ($/oz) | 285 | 533 | 263 | (123) | 457 | | All-in sustaining margin 1 ($m) | 8.3 | 14.8 | 8.4 | (3.8) | 16.2 | | Income from mine operations ($m) | 26.2 | 23.1 | 23.5 | 8.7 | 23.7 | | Adjusted net income 1 ($m) | 20.3 | 13.9 | 23.5 | 3.7 | 21.3 | | Cash generated from operating activities ($m) | 28.6 | 9.2 | 26.1 | 24.1 | 39.7 | | Free cash flow 1 ($m) | 2.9 | (4.5) | 5.8 | 2.3 | 24.0 |
Ore tonnes mined from the Abore deposit totalled 0.7 Mt at an average mined grade of 1.1 g/t. Ore mining rates at Abore increased by 43% during Q3 2024 compared to Q2 2024, as lower precipitation levels resulted in improved ground conditions and mining equipment productivity. Additional mining equipment was also mobilized during the quarter and, as a result, Q3 mining rates averaged 113,000t per day compared to 87,000t per day in the second quarter of 2024. Waste stripping activities at Abore continued with 9.7 Mt of waste rock mined at a strip ratio of 14.5:1. The strip ratio is expected to remain elevated for the remainder of 2024 due to an increase in the Abore pit shell, a result of a larger mineral reserve (refer to news release dated August 8, 2024 ). The AGM produced 29,784 ounces of gold during Q3 2024, as the processing plant milled 1.2 Mt of ore at a grade of 0.9 g/t with metallurgical recovery averaging 91%. Gold production during Q3 2024 was slightly impacted by lower milling rates as mined ore from Abore and stockpiles of harder Nkran ore both required additional crushing and grinding. Concurrently, two mobile crushers at the processing plant experienced considerable mechanical downtime during the quarter, adding to lower throughput. Despite 13% lower mill throughput, gold production during Q3 2024 was 13% higher than Q2 2024 resulting from higher mined grades at Abore and an increase in the recovery rate from 82% to 91%.
To improve mill throughput, a mobile crushing unit was installed at the Abore pit at the end of October 2024 , which is expected to increase Abore ore fragmentation. This will also improve haul truck load volumes before transport to the processing plant.
Asanko Gold Mine – Financial and operational highlights for the three and nine months ended September 30, 2024 and 2023 (100% basis)
The following tables present excerpts of the operating and financial results of the AGM on a 100% basis for the three and nine months ended September 30, 2024 and 2023, allowing performance to be compared with the comparative period in the prior quarter.
| | Three months ended September 30, | Nine months ended September 30, | | | | (All amounts in 000's of US dollars, unless otherwise stated) | 2024 | 2023 | 2024 | 2023 | | Asanko Gold Mine (100% basis) | | | | | | Financial results | | | | | | Revenue | 71 130 | 67 770 | 200 695 | 197 029 | | Income from mine operations | 26 199 | 23 745 | 72 766 | 72 808 | | Net income | 3 718 | 21 284 | 32 120 | 66 276 | | Adjusted EBITDA 1 | 25 621 | 25 475 | 66 413 | 73 879 | | Cash generated from operating activities | 28 646 | 39 740 | 63 982 | 76 662 | | Free cash flow 1 | 2 932 | 24 016 | 4 236 | 46 088 | | AISC margin ($ per gold ounce sold) 1 | 285 | 457 | 355 | 536 | | Operating results | | | | | | Gold produced (ounces) | 29 784 | 35 779 | 86 607 | 102 130 | | Gold sold (ounces) | 29 014 | 35 522 | 88 684 | 103 608 | | Average realized gold price ($/oz) | 2 446 | 1 902 | 2 258 | 1 898 | | Total cash costs ($ per gold ounce sold) 1 | 1 247 | 1 056 | 1 230 | 1 088 | | AISC ($ per gold ounce sold) 1 | 2 161 | 1 445 | 1 903 | 1 362 |
Sold 29,014 ounces of gold in Q3 2024 at an average realized gold price of $2,446 /oz for total revenue of $71.1 million (including $0.2 million of by-product silver revenue). Revenue was higher in Q3 2024 relative to the comparative period as a 29% increase in realized gold prices was partly offset by an 18% reduction in sales volumes. Income from mine operations for Q3 2024 totaled $26.2 million compared to $23.7 million in Q3 2023, higher due to an increase in revenue. Reported Adjusted EBITDA 1 of $25.6 million in Q3 2024, comparable to the $25.5 million in Q3 2023. Total cash costs 1 in Q3 2024 amounted to $1,247 /oz compared to $1,056 /oz in Q3 2023. The increase in total cash costs 1 was primarily driven by 18% lower gold sales volumes, which had the effect of increasing fixed costs on a per ounce basis. During Q3 2023, a higher portion of low grade stockpiled ore was processed that had no accounting book value, and as such had no mining cost attributed to it, resulting in lower total cash costs 1 in the comparative quarter. AISC 1 for Q3 2024 was $2,161 /oz compared to $1,445 /oz in the comparative period. The increase in AlSC 1 from Q3 2023 to Q3 2024 was mainly due to the higher stripping costs at Abore and 18% fewer gold ounces sold, as well as the increase in total cash costs per ounce 1 described above. Deducting the initial stripping costs required at Abore, AISC 1 for Q3 2024 would be $1,513 /oz. The AGM generated $28.6 million of cash flow from operating activities and Free Cash Flow 1 of $2.9 million during Q3 2024. This compares to $39.7 million of cash flow from operating activities and Free Cash Flow 1 of $24.0 million during Q3 2023. The decrease in Free Cash Flow 1 was primarily due to investments in waste stripping at the expanded Abore deposit during Q3 2024.
Galiano Gold Inc. – Financial highlights for the three and nine months ended September 30, 2024 and 2023
| | Three months ended September 30, | Nine months ended September 30, | | | | (All amounts in 000's of US dollars, unless otherwise stated) | 2024 | 2023 | 2024 | 2023 | | Galiano Gold Inc. | | | | | | Revenue | 71 130 | - | 166 788 | - | | Income from mine operations | 26 444 | - | 56 222 | - | | Net income | 1 100 | 11 389 | 5 172 | 31 843 | | Net income per share attributable to common shareholders | 0,00 | 0,05 | 0,02 | 0,14 | | Adjusted net income 1 | 17 743 | 11 389 | 37 119 | 31 843 | | Adjusted net income per share attributable to common shareholders 1 | 0,07 | 0,05 | 0,15 | 0,14 | | Adjusted EBITDA 1 | 29 012 | 10 282 | 50 117 | 26 656 | | Cash and cash equivalents | 120 916 | 56 079 | 120 916 | 56 079 | | Cash generated from (used in) operating activities | 24 449 | (140) | 41 940 | (2 060) |
The Company consolidated the financial results of the AGM commencing on March 4, 2024 . As revenue and income from mine operations for the three and nine months ended September 30, 2024 relate to the financial results of the AGM, refer to the discussion above on the AGM's financial results for the quarter. The Company reported net income of $1.1 million in Q3 2024 compared to net income of $11.4 million in Q3 2023. The decrease in net earnings during Q3 2024 was due to unrealized losses on gold hedge instruments. Adjusting for the unrealized losses on gold hedge instruments, adjusted net income 1 was $17.7 million in Q3 2024 and was higher than the comparative period due to consolidating the financial results of the AGM. Adjusted EBITDA 1 for Q3 2024 amounted to $29.0 million , compared to $10.3 million in Q3 2023. The increase in Adjusted EBITDA 1 was due to consolidating the financial results of the AGM; whereas, in the prior quarter the Company only recognized its 45% share of the AGM's Adjusted EBITDA 1 . Cash generated from operating activities in Q3 2024 was $24.4 million , compared to cash used in operating activities of $0.1 million in Q3 2023. The increase in cash generated from operating activities in Q3 2024 was driven by the consolidation of the AGM's cash flows. As of September 30, 2024 , the Company had cash and cash equivalents of $120.9 million and no debt.
| This news release should be read in conjunction with Galiano's Management's Discussion and Analysis and the Unaudited Condensed Consolidated Interim Financial Statements for the three and nine months ended September 30, 2024 and 2023, which are available at www.galianogold.com and filed on SEDAR+. |
1 Non-IFRS Performance Measures
The Company has included certain non-IFRS performance measures in this news release. These non-IFRS performance measures do not have any standardized meaning and therefore may not be comparable to similar measures presented by other issuers. Accordingly, these performance measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Refer to the Non-IFRS Measures section of Galiano's Management's Discussion and Analysis for an explanation of these measures and reconciliations to the Company's and the AGM's reported financial results in accordance with IFRS.
Total Cash Costs per Gold Ounce
Management of the Company uses total cash costs per gold ounce sold to monitor the operating performance of the AGM. Total cash costs include the cost of production, adjusted for by-product revenue and production royalties per ounce of gold sold.
AISC per Gold Ounce and All-in Sustaining Margin
The Company has adopted the reporting of "AISC per gold ounce sold" as per the World Gold Council's guidance. AISC include total cash costs, AGM general and administrative expenses, sustaining capital expenditure, sustaining capitalized stripping costs, reclamation cost accretion and lease payments made to and interest expense on the AGM's mining and service lease agreements per ounce of gold sold. All-in sustaining margin is calculated by taking the average realized gold price for a period less that period's AISC per ounce.
EBITDA and Adjusted EBITDA
EBITDA provides an indication of the Company's continuing capacity to generate income from operations before taking into account the Company's financing decisions and costs of amortizing capital assets. Accordingly, EBITDA comprises net income excluding interest expense, interest income, amortization and depletion, and income taxes. Adjusted EBITDA adjusts EBITDA to exclude non-recurring items and to include the Company's interest in the Adjusted EBITDA of the AGM joint venture for the period from January 1, 2024 to March 3, 2024 . Other companies may calculate EBITDA and Adjusted EBITDA differently.
Free cash flow
The Company believes that in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors and analysts use free cash flow to evaluate the AGM's performance with respect to its operating cash flow capacity to meet non-discretionary outflows of cash. The presentation of free cash flow is not meant to be a substitute for the cash flow information presented in accordance with IFRS, but rather should be evaluated in conjunction with such IFRS measures. Free cash flow is calculated as cash flows from operating activities of the AGM adjusted for cash flows associated with sustaining and non-sustaining capital expenditures and payments made to mining and service contractors for leases capitalized under IFRS 16.
Adjusted net income and adjusted net income per common share
The Company has included the non-IFRS performance measures of adjusted net income and adjusted net income per common share. Neither adjusted net income nor adjusted net income per share have any standardized meaning and are therefore unlikely to be comparable to other measures presented by other issuers. Adjusted net income excludes certain non-cash items or non-recurring items from net income or net loss to provide a measure which helps the Company and investors to evaluate the results of the underlying core operations of the Company or the AGM and its ability to generate cash flows and is an important indicator of the strength of the Company's or the AGM's operations and performance of its core business.
Qualified Person
Richard Miller , P.Eng., Vice President Technical Services with Galiano, is a Qualified Person as defined by Canadian National Instrument 43-101, Standards of Disclosure for Mineral Projects, and has approved the scientific and technical information contained in this news release.