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Galiano Gold Announces Preliminary 2020 Operating Results and 2021 Guidance - Stockwatch
Tuesday, 16 February 2021
(All dollar amounts are United States dollars unless otherwise stated)
VANCOUVER, BC, Feb. 16, 2021 /PRNewswire/ - Galiano Gold Inc. ("Galiano" or the "Company") (TSX: GAU) (NYSE American: GAU) reports preliminary fourth quarter ("Q4") 2020 operating results for the Asanko Gold Mine ("AGM"), located in Ghana, West Africa. The AGM is a 50:50 joint venture ("JV") with Gold Fields Ltd (JSE, NYSE: GFI), which is managed and operated by Galiano. All financial information contained in this news release are unaudited and reported in US$.
Q4 and full year 2020 Asanko Gold Mine Highlights (100% basis)
- Exceeded annual production guidance: Annual gold production of 249,904 ounces, exceeding the upper end of 2020 production guidance of 225,000 - 245,000 ounces, with 65,571 ounces produced in the fourth quarter.
- Revenue growth: Highest recorded annual revenue of $418.1 million generated from gold sales of 243,807 ounces at an average realized price of $1,711/oz in 2020. Revenue of $111.1 million generated from gold sales of 60,655 ounces at an average realized price of $1,828/oz in the fourth quarter.
- Record milling performance: The processing plant delivered a record annual milling performance with throughput of 5.9 million tonnes ("Mt"), at an average plant feed grade of 1.4 g/t. The processing facility continued to deliver metallurgical recovery above design, achieving 94% recovery. Processed 1.4Mt of ore with an average gold grade of 1.5 g/t in the fourth quarter.
- Consistent cost performance: Preliminary all-in sustaining costs ("AISC")1 of $1,115/oz for 2020, below revised guidance (as of Q3 2020) of $1,150/oz, and of $1,179/oz for the fourth quarter.
- Significant cash generation: Preliminary cash flow from operating activities of $152.3 million during 2020.
- Return of capital: The AGM distributed $75 million to the joint venture participants through cash distributions in 2020.
Preliminary 2021 Guidance for the Asanko Gold Mine (100% basis)
- Production is expected to remain stable at 225,000 to 245,000 ounces
- AISC are expected to be $1,100 to $1,300/oz, including non-cash costs attributed with processing stockpiled ore
"Production returned to more usual levels at the Asanko Gold Mine in Q4, as planned, resulting in a strong finish to 2020. For the second consecutive year, the AGM was able to exceed annual production guidance and maintain stable all-in-sustaining costs despite the impacts of COVID-19." said Greg McCunn, Chief Executive Officer. "It was also a very successful year for exploration at the AGM, with additional resources delineated at the Akwasiso pit allowing mining to continue through 2021 while infill drilling is being completed to support a maiden resource estimate at Miradani North."
Production and Safety
Safety remains a priority at the AGM. In 2020 there were two lost-time injuries ("LTI") and 10 total recordable injuries ("TRI") reported during the year. LTI frequency rate ("LTIFR") and TRI frequency rate ("TRIFR") per million employee hours worked were 0.20 and 1.01, respectively, for the year.
In Q4 2020, the AGM sourced ore from Akwasiso and Esaase as well as run of mine stockpiles. During the quarter, 2.0Mt of ore was mined at an average grade of 1.4 g/t and 1.4Mt of ore was processed at 1.5 g/t. The processing facility continued to perform well and recovery averaged 95% over the quarter.
|AGM Key Production Statistics |
|Units ||Q4 2020 ||Q3 2020 ||Q2 2020 ||Q1 2020 ||Q4 2019 |
|Total Tonnes Mined ||000 t ||13,737 ||12,279 ||9,489 ||8,962 ||6,361 |
|Waste Tonnes Mined ||000 t ||11,773 ||11,321 ||8,128 ||7,051 ||4,956 |
|Ore Tonnes Mined ||000 t ||1,964 ||958 ||1,361 ||1,911 ||1,405 |
|Strip Ratio ||W:O ||6.0:1 ||11.8:1 ||6.0:1 ||3.7:1 ||3.5:1 |
|Average Gold Grade Mined ||g/t ||1.4 ||1.4 ||1.4 ||1.6 ||1.6 |
|Ore Processed ||000 t ||1,438 ||1,467 ||1,638 ||1,400 ||1,460 |
|Gold Feed Grade ||g/t ||1.5 ||1.1 ||1.4 ||1.6 ||1.5 |
|Gold Recovery ||% ||95 ||93 ||94 ||94 ||94 |
|Gold Produced ||oz ||65,571 ||48,974 ||69,026 ||66,333 ||66,112 |
Sales and Liquidity
The AGM sold 60,655 ounces of gold in Q4 2020 and had a closing unaudited cash balance of $64.3 million (including $30.0 million fully drawn revolving credit facility), $10.9 million in receivables from gold sales and $8.2 million in gold on hand. As at December 31, 2020, Galiano held unaudited cash and cash equivalents of $62.2 million and $2.9 million in receivables.
Business Plan for 2021
|Asanko Gold Mine Guidance |
History (100% basis)
Guidance (oz gold)
Actual (oz gold)
|Cost Guidance (AISC $/oz) ||Cost Actual (AISC $/oz) |
|2019 ||225,000 – 245,000 ||251,044 ||$1,000 – $1,100 ||$1,112 |
|2020 ||225,000 – 245,000 ||249,904 ||$1,000 – $1,100 ||$1,115 |
|2021 Preliminary ||225,000 – 245,000 ||– ||$1,100 – $1,300 ||– |
The Company is currently finalizing the detailed 2021 business plan and expects to have Board and Joint Venture approval of the plan in March 2021 in conjunction with filing of its audited 2020 annual financial statements on or about March 11, 2021.
Annual mill throughput is expected to range between 5.5Mt and 5.8Mt consisting of contributions from Esaase, Akwasiso and ore stockpiles. Positive results from 2020 infill drilling at Akwasiso, targeting conversion of inferred resource, suggest an expansion at Akwasiso via a phase 3 pushback is economically viable. Pending requisite Joint Venture approvals, stripping at Akwasiso is expected to commence in late Q1 2021.
AISC are expected to range between $1,100 and $1,300/oz in 2021, including non-cash contributions of $30 to $60/oz as stockpiles are depleted during the year. Additionally, the AISC guidance includes royalties payable to the government of Ghana totalling approximately $80/oz based on a $1,600/oz gold selling price. Sustaining capital for the full year is expected to be $15 to $20 million including approximately $13 million for a phase VI expansion of the Tailings Storage Facility.
Mineral Resource and Reserve Update
In the second half of 2020, the Company undertook a substantial drilling campaign designed to expand the resources of several of the current known orebodies at the AGM including Akwasiso, Nkran, Abore and Miradani North. In addition, a significant amount of infill drilling, in-pit mapping and geological modelling work has been undertaken at the Esaase deposit in order to improve the understanding of the mineralization as the pit matured during its second year of operations.
An updated Mineral Resource and Reserve Estimate effective June 30, 2021 is expected to be released in Q3 2021 for the AGM. The Mineral Resource and Reserve Estimate will incorporate the new exploration and infill drilling, updated modifying factors, and updated geological modelling with the goal to improve the reconciliation between the Mineral Resource Estimate and site grade control modelling. The resulting Mineral Resource and Reserve Estimate will reflect the ongoing efforts to achieve the best value from the AGM in the context of the current operating and metal price environment and will be used for mine planning for 2022 onwards.
Galiano is pleased to announce that it has recently completed a corporate restructuring, centralizing its corporate operations in its Vancouver office. In 2020 and early 2021, the Company appointed a number of professionals to join Chief Executive Officer, Greg McCunn, Executive Vice President and Chief Financial Officer, Fausto Di Trapani, and Senior Vice President Corporate Development, Markus Felderer, as follows:
- Matt Badylak, Executive Vice President and Chief Operating Officer. Mr. Badylak is a seasoned mining professional with 20 years of operations experience including a number of senior management roles with Eldorado Gold. In his most recent role as General Manager Kisladag Mine, Mr. Badylak was responsible for multiple cost saving initiatives and optimization of the heap leaching operations, allowing the company to avoid construction of a capital-intensive milling facility and extend the operation of the heap leach.
- Todd Romaine, Executive Vice President Sustainability. Mr. Romaine has over 20 years of experience in the environmental, social and community aspects of the resource extractive sectors as well as public and aboriginal governments. Most recently he worked as the Chief Sustainability Officer for Danakali Limited, an Australian junior potash mining company that is developing a 200-year Sulphate of Potash deposit in Eritrea. Prior to this role, Todd was the Vice President, Corporate Social Responsibility & Government Relations at Nevsun Resources Ltd, a Canadian mid-tier mining company and played a central role developing leading edge CSR initiatives to establish social license and responsible operations in challenging jurisdictions. Previously, he worked in senior management roles at Enbridge Pipelines Inc., Inuvialuit Regional Corporation and the Government of Nunavut. Todd holds designations with the Canadian Institute of Planners, International Right of Way Association and has a Master's of International Relations, a Master's of Leadership, a Bachelor of Science in Environmental Planning, and a Bachelor of Arts in Environmental Studies.
- Matt Freeman, Senior Vice President Finance. Mr. Freeman has more than 20 years of financial experience, of which the last 10 years has been in the mining industry. Most recently, as CFO, he guided Energold Drilling through a successful corporate restructuring, and prior to that held senior financial positions at SSR Mining, where he played a key financial role in its growth to becoming a mid-tier gold producer; leading initiatives on financial reporting, risk management, treasury management, as well as M&A activities. Matt began his career with PricewaterhouseCoopers in London, is a UK qualified Chartered Accountant (ACA) and holds an BA honours degree from the University of Oxford.
- Eric Chen, Vice President Mineral Resources. Mr. Chen has over 30 years of experience in mineral resource estimation and modeling, geostatistics and mine geology. His experience includes mineral exploration, project development and operation. Previously Eric spent 11 years with Goldcorp (later Newmont Goldcorp) as Manager of Mineral Resources, Manager of Exploration Modeling, Superintendent of Mine Geology, Superintendent of Long Range Planning and Modeling of Penasquito Mine, and five years with Eldorado Gold as resource and business development geologist. Eric is highly regarded in industry for his professional integrity, technical expertise, broad cross-functional experience, and strong analytical skills. He holds a Bachelor of Science degree in Geology, and is a Professional Geoscientist registered at Engineers and Geoscientists British Columbia.
- Alberto Chang, Vice President Mining. Mr. Chang is a mining engineer with over 35 years of hands-on experience in the mining industry through management, design, and development in both open pit and underground mining. Alberto excels in business planning, mine production optimization, mining engineering, and process improvement of mine operations. He has been working as a Mining Consultant for the past several years and before that, he worked in various management and technical positions within Goldcorp Inc., NovaGold Resources Inc., Newmont-Buenaventura JV and Placer Dome Inc., in Canada, Mexico, USA, Peru and Chile. He holds a Bachelor of Science in Mining Engineering and a Master of Science in Engineering from Queen's University.
- Greg Collins, Vice President Exploration. Mr. Collins is a professional geologist with over 25 years of experience in the mining/exploration industry. He has held senior roles with companies such as North Limited, Anglogold Ashanti and Eldorado Gold. Greg has extensive experience in the Asia exploration scene, having worked in Indonesia/China/Mongolia/Russia region since 2004. Prior to this he worked in the industry throughout Australia, exploring for a wide range of base and precious metal deposits. He has a proven ability to identify and add high quality projects to a company's portfolio. He was responsible for directing Anglogold Ashanti's entry into the world class Tropicana project in Western Australia, leading to the discovery of the +8Moz Havana/Tropicana deposit. More recently he managed exploration at the world class 1.66Bt Malmyzh Copper-Gold deposit in the Russian Far East, through advanced exploration, due diligence and final sale.
- Peter Lekich, Vice President Investor Relations. Mr. Lekich has more than ten years of experience in a variety of finance roles. Most recently he was Manager of Investor Relations for Eldorado Gold, a mid-cap gold producer with operations in Turkey, Canada and Greece. In this role he led the investor relations function for the company and developed strategies to engage the investment community. Prior to this Peter worked in a variety of project finance, asset management and investor relations roles at Alterra Power, a developer and operator of renewable power projects. Peter has a B.A.SC in Chemical Engineering from the University of British Columbia and an MBA from the Sauder School of Business.
About Galiano Gold Inc.
Galiano is focused on creatinga sustainable business capable of long-term value creation for its stakeholders through exploration and disciplined deployment of its financial resources. The Company currently operates and manages the Asanko Gold Mine, located in Ghana, West Africa which is jointly owned with Gold Fields Ltd. The Company is strongly committed to the highest standards for environmental management, social responsibility, and health and safety for its employees and neighbouring communities. For more information, please visit www.galianogold.com.
1 Non-GAAP Performance Measures
The Company has included a non-GAAP performance measure in this press release. This non-GAAP performance measure does not have any standardized meaning. Accordingly, this performance measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
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- All-in Sustaining Costs Per Gold Ounce
The Company has adopted the reporting of "all-in sustaining costs per gold ounce" as per the World Gold Council's guidance. AISC include total cash costs, corporate overhead expenses, sustaining capital expenditure, capitalized stripping costs and reclamation cost accretion per ounce of gold sold.