GAU.TO · 2023-11-14 12:00:00

Galiano GOLD Reports Q3 2023 Operating and Financial Results

Financials

GALIANO GOLD REPORTS Q3 2023 OPERATING

AND FINANCIAL RESULTS

Vancouver, British Columbia, November 14, 2023 – Galiano Gold Inc. (“Galiano” or the “Company”)

(TSX, NYSE American: GAU) is pleased to report its third quarter (“Q3”) operating and financial results for

the Company and the Asanko Gold Mine (“AGM”), located in Ghana, West Africa. The AGM is a 50:50 joint

venture (“JV”) with Gold Fields Limited (“Gold Fields”) which is managed and operated by Galiano. All

financial information contained in this news release is unaudited and reported in United States dollars.

Asanko Gold Mine JV Key Metrics (100% basis):

 Safety: One lost‐time injury (“LTI”) and three total recordable injuries (“TRI”) recorded during the

quarter, resulting in 12‐month rolling LTI and TRI frequency rates of 0.54 and 1.61 per million

employee hours worked, respectively.

 Production performance: Gold production of 35,779 ounces during the third quarter. Year‐to‐date

gold production of 102,130 ounces. Full year gold production is expected to come in at the top end of

guidance of between 120,000 to 130,000 ounces.

 Milling performance: Achieved milling throughput of 1.6 million tonnes (“Mt”) of ore at a grade of 0.8

grams per tonne (“g/t”) during the quarter. Metallurgical recovery in Q3 2023 was 87%.

 Cost performance and cash flow: Total cash costs1 of $1,056 per gold ounce (“/oz”) and all‐in

sustaining costs1 (“AISC”) of $1,445/oz for the three months ended September 30, 2023. Full year

AISC1 guidance has been revised from between $1,650/oz to $1,750/oz to $1,500/oz to $1,600/oz due

to higher gold sales and timing of sustaining capital expenditures. Additionally, the JV generated

positive cash flow from operations of $39.7 million and Free Cash Flow1 of $24.0 million during the

quarter.

 Financial performance: Gold revenue of $67.6 million generated from 35,522 gold ounces sold at an

average realized price of $1,902/oz for the quarter. Net income of $21.3 million and Adjusted EBITDA¹

of $25.5 million during the quarter.

 Restart of mining: Mining operations at the AGM restarted on October 1, 2023. The AGM’s mining

contractor has mobilized a fleet of mining equipment and pre‐stripping activities are ongoing. The

Abore pit remains on track to deliver higher grade ore to the processing plant, than the current

stockpile processing, in Q2 2024.

 Exploration focus: Initiated drilling programs at Abore to convert inferred mineral resources to the

indicated mineral resource category, at Midras South to advance the deposit towards a maiden

mineral reserve estimate, and at Nkran completed a phase 1 mineral resource upgrade and mineral

reserve conversion drilling.

 Robust liquidity: $136.9 million in cash and cash equivalents, $4.4 million in gold sales receivables,

$2.0 million in gold on hand and no debt as of September 30, 2023.

1 See “Non‐IFRS Performance Measures”

Galiano Highlights:

 Stable balance sheet: Cash and cash equivalents of $56.1 million as at September 30, 2023, while

remaining debt‐free.

 Positive earnings: Net income of $11.4 million or $0.05 per common share during the quarter, which

includes the Company’s share of the JV’s net earnings for the quarter.

“The third quarter was another strong financial and operating period for the AGM, which is on track to

achieve the upper end of gold production guidance of between 120,000 to 130,000 ounces,” stated Matt

Badylak, Galiano’s President and Chief Executive Officer. “The mine continued to generate significant cash

flows through stockpile processing, which has further strengthened the AGM’s balance sheet. As planned,

mining operations at the AGM have recommenced and Abore is on track to deliver higher grade ore to

the processing plant by the second quarter of 2024.

At the corporate level, we closed the quarter with $56 million in cash, no debt, and remain in an enviable

position to pursue accretive opportunities for growth. Health and safety continue to remain a top priority

throughout the organization as we constantly strive to reinforce our commitment to Zero Harm and

implementation of best safety practices at the Asanko Gold Mine.”

Asanko Gold Mine – Summary of quarterly operational and financial highlights (100% basis)

Asanko Gold Mine (100% basis) Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022

Ore mined (‘000t) ‐ ‐ ‐ ‐ 144

Waste mined (‘000t) ‐ ‐ ‐ ‐ 107

Total mined (‘000t) ‐ ‐ ‐ ‐ 251

Strip ratio (W:O) ‐ ‐ ‐ ‐ 0.7

Average gold grade mined (g/t) ‐ ‐ ‐ ‐ 1.8

Mining cost ($/t mined) ‐ ‐ ‐ ‐ 25.27

Ore transportation from Esaase (‘000 t) 695 729 1,367 503 699

Ore transportation cost ($/t trucked) 6.63 5.88 5.51 6.19 6.55

Ore milled (‘000t) 1,573 1,457 1,566 1,518 1,423

Average mill head grade (g/t) 0.8 0.8 0.9 0.8 1.1

Average recovery rate (%) 87 85 73 80 88

Processing cost ($/t milled) 9.69 11.01 9.78 10.06 10.45

G&A cost ($/t milled) 4.16 4.68 4.09 4.20 4.89

Gold produced (oz) 35,779 33,673 32,678 34,090 43,899

Gold sold (oz) 35,522 32,912 35,174 34,202 45,482

Average realized gold price ($/oz) 1,902 1,944 1,850 1,686 1,687

Total cash costs1 ($/oz) 1,056 1,127 1,083 1,031 1,001

All‐in sustaining costs1 ($/oz) 1,445 1,374 1,268 1,191 1,178

All‐in sustaining margin1 ($/oz) 457 570 582 495 509

All‐in sustaining margin1 ($m) 16.2 18.8 20.5 16.9 23.2

Asanko Gold Mine (100% basis) Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022

Revenue ($m) 67.8 64.1 65.2 57.8 76.9

Income from mine operations ($m) 23.7 24.4 24.7 19.2 25.7

Adjusted net income1 ($m) 21.3 24.4 20.6 19.6 17.3

Cash provided by operating activities ($m) 39.7 18.0 18.9 11.1 26.1

Free cash flow1 ($m) 24.0 10.1 12.0 5.5 16.3

Asanko Gold Mine – Financial and operational highlights for the three and nine months ended

September 30, 2023 and 2022 (100% basis)

 The AGM produced 35,779 ounces of gold during Q3 2023, as the processing plant achieved milling

throughput of 1.6 Mt of ore at a grade of 0.8 g/t with metallurgical recovery averaging 87%. The

composition of the feed blend processed during Q3 2023 had a higher percentage of oxide ore

resulting in the strong recoveries achieved.

 Sold 35,522 ounces of gold in Q3 2023 at an average realized gold price of $1,902/oz for total revenue

of $67.8 million (including $0.2 million of by‐product silver revenue), a decrease of $9.1 million from

Q3 2022. The decrease in revenue quarter‐on‐quarter was due to a 22% reduction in sales volumes

relative to Q3 2022, partly offset by a 13% increase in realized gold prices.

 Income from mine operations for Q3 2023 totaled $23.7 million compared to income from mine

operations of $25.7 million in Q3 2022. The decrease in income from mine operations was due to a

$9.1 million reduction in revenue described above, partly offset by $6.2 million decrease in cost of

(All amounts in 000's of US dollars, unless otherwise stated) 2023 2022 2023 2022

Asanko Gold Mine (100% basis)

Financial results

Rev enue 67,770 76,911 197,029 239,328

Income from mine operations 23,745 25,690 72,808 52,486

Net inc ome 21,284 17,346 66,276 19,511

Adjus ted net inc ome

21,284 17,346 66,276 38,431

Adjus ted EBITDA

25,475 22,269 73,879 56,438

Ca s h and ca s h equiv alents 136,860 85,802 136,860 85,802

Ca s h generated from operating ac t iv it ies 39,740 26,075 76,662 64,344

Free ca s h flow

24,016 16,277 46,088 38,252

AISC margin

16,234 23,150 55,534 53,726

Key mine performance data

Gold produced (ounces) 35,779 43,899 102,130 136,252

Gold sold (ounces) 35,522 45,482 103,608 133,647

Avera ge r ealized gold price ($/oz) 1,902 1,687 1,898 1,787

Total ca s h cos ts ($ per gold ounce sold)

1,056 1,001 1,088 1,189

AISC ($ per gold ounce sold)

1,445 1,178 1,362 1,385

Three months ended September 30, Nine months ended September 30,

sales that resulted from fewer ounces sold as well as processing ore that had no carrying value for

accounting purposes.

 Reported Adjusted EBITDA1 of $25.5 million in Q3 2023 compared to $22.3 million in Q3 2022. The

increase in Adjusted EBITDA1 was largely driven by Q3 2022 including $4.3 million of mining contractor

costs.

 Total cash costs1 in Q3 2023 amounted to $1,056/oz compared to $1,001/oz in Q3 2022. Although

gold sales volumes decreased by 22% in Q3 2023, total cash costs per ounce1 in Q3 2023 were only

5% higher than Q3 2022 as a result of processing ore that had no carrying value for accounting

purposes.

 AISC1 for Q3 2023 was $1,445/oz compared to $1,178/oz in the comparative period. AISC1 was higher

in the current quarter predominately due to the increase in total cash costs per ounce1 mentioned

above and higher sustaining capital expenditures ($276/oz increase) to support the restart of mining

in Q4 2023, construction of water treatment facilities and raising the height of the tailings storage

facility.

 The AGM generated $39.7 million of cash flow from operating activities and free cash flow1 of $24.0

million during Q3 2023. This compares to $26.1 million of cash flow from operating activities and free

cash flow1 of $16.3 million during Q3 2022. The increase in free cash flow1 was primarily due to lower

working capital tie‐up, partly offset by higher capital spend to support a restart of mining operations.

Galiano Gold Inc. – Financial highlights for the three and nine months ended September 30, 2023 and

2022

 The Company reported net income of $11.4 million in Q3 2023, compared to net income of $1.3

million in Q3 2022. Net income was higher in Q3 2023 due to the Company recording its share of the

JV’s net earnings which amounted to $9.6 million. During Q3 2022, the Company did not recognize

its share of the JV’s net earnings as the estimated recoverable amount of the Company’s investment

in the JV was nil as at September 30, 2022.

 Adjusted EBITDA1 for Q3 2023 amounted to $10.3 million, compared to a loss of $2.1 million in Q3

2022. The increase in Adjusted EBITDA1 was due to the increase in net income during Q3 2023 as

described above.

 Cash used in operating activities in Q3 2023 was $0.1 million, compared to cash provided by operating

activities of $1.5 million in Q3 2022. The increase in cash used in operating activities from Q3 2022 to

Q3 2023 was driven by working capital movements, specifically related to the Company’s service fee

receivable from the JV.

(All amounts in 000's of US dollars, unless otherwise stated) 2023 2022 2023 2022

Galiano Gold Inc.

Net inc ome 11,389 1,280 31,843 12,309

Net inc ome per shar e ‐ basic 0.05 0.01 0.14 0.05

Adjus ted EBITDA

10,282 (2,136) 26,656 (4,739)

Ca s h and ca s h equiv alents 56,079 54,716 56,079 54,716

Three months ended September 30, Nine months ended September 30,

 As of September 30, 2023, the Company had cash and cash equivalents of $56.1 million, while

remaining debt‐free.

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, 2023 and 2022, 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 JV’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 JV. Total cash costs include the cost of production, adjusted for share‐based compensation expense, by‐

product revenue and production royalties per ounce of gold sold.

 All‐in Sustaining Costs per Gold Ounce and All‐in Sustaining Margin

The Company has adopted the reporting of “all‐in sustaining costs per gold ounce” (“AISC”) as per the World Gold

Council’s guidance. AISC include total cash costs, corporate overhead 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. Excluded from AISC are one‐

time severance charges in line with World Gold Council guidance. All‐in sustaining margin is calculated by taking

the average realized gold price for a period less that period’s AISC.

 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 (loss) 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 JV. Other companies and JV partners 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 JV’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 JV 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 JV and its ability to generate cash flows and is an important indicator of the strength of the

Company’s or the JV’s operations and performance of its core business.

Qualified Person

Richard Miller, P.Eng., Vice President Technical Services with Galiano Gold Inc., 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.

About Galiano Gold Inc.

Galiano is focused on creating a sustainable business capable of value creation for all stakeholders through

production, exploration and disciplined deployment of its financial resources. The Company operates and

manages the Asanko Gold Mine, which is located in Ghana, West Africa, and jointly owned with Gold

Fields. Galiano is committed to the highest standards for environmental management, social

responsibility, and the health and safety of its employees and neighbouring communities. For more

information, please visit www.galianogold.com.

Conference Call Details:

Date: November 15, 2023 Replay (available until November 21, 2023)

Time: 10:00 AM ET (7:00 AM PT) Local: 416‐764‐8677

Dial In: 416‐764‐8688 Toll Free: 1‐888‐390‐0541

Toll Free: 1‐888‐390‐0546 Access Code: 348996#

Enquiries:

Krista Muhr

Toll‐Free (N. America): 1‐855‐246‐7341

Telephone: 1‐778‐239‐0446

Email: [email protected]

Cautionary Note Regarding Forward‐Looking Statements

Certain statements and information contained in this news release constitute “forward‐looking statements” within

the meaning of applicable U.S. securities laws and “forward‐looking information” within the meaning of applicable

Canadian securities laws, which we refer to collectively as “forward‐looking statements”. Forward‐looking

statements are statements and information regarding possible events, conditions or results of operations that are

based upon assumptions about future conditions and courses of action. All statements and information other than

statements of historical fact may be forward looking statements. In some cases, forward‐looking statements can be

identified by the use of words such as “seek”, “expect”, “anticipate”, “budget”, “plan”, “estimate”, “continue”,

“forecast”, “intend”, “believe”, “predict”, “potential”, “target”, “may”, “could”, “would”, “might”, “will” and similar

words or phrases (including negative variations) suggesting future outcomes or statements regarding an outlook.

Forward‐looking statements in this news release include, but are not limited to: the operating plans for the AGM

under the JV between the Company and Gold Fields; opportunities for growth at the corporate level; commitment to

health and safety; planned and future drilling programs; anticipated production and cost guidance; mine restart plans

and timing thereof; timing of delivery of higher grade ore from the Abore pit; and statements regarding the usefulness

and comparability of certain non‐IFRS measures. Such forward‐looking statements are based on a number of material

factors and assumptions, including, but not limited to: the Company and Gold Fields will agree on the manner in

which the JV will operate the AGM, including agreement on the new life of mine (“LOM”) plan, development plans

and capital expenditures; the price of gold will not decline significantly or for a protracted period of time; the accuracy

of the estimates and assumptions underlying mineral reserve and mineral resource estimates; the Company’s ability

to raise sufficient funds from future equity financings to support its operations, and general business and economic

conditions; the global financial markets and general economic conditions will be stable and prosperous in the future;

the ability of the JV and the Company to comply with applicable governmental regulations and standards; the mining

laws, tax laws and other laws in Ghana applicable to the AGM and the JV will not change, and there will be no

imposition of additional exchange controls in Ghana; the success of the JV and the Company in implementing its

development strategies and achieving its business objectives; the JV will have sufficient working capital necessary to

sustain its operations on an ongoing basis and the Company will continue to have sufficient working capital to fund

its operations and contributions to the JV; and the key personnel of the Company and the JV will continue their

employment.

The foregoing list of assumptions cannot be considered exhaustive.

Forward‐looking statements involve known and unknown risks, uncertainties and other factors which may cause

actual results, performance or achievements to differ materially from those anticipated in such forward‐looking

statements. The Company believes the expectations reflected in such forward‐looking statements are reasonable,

but no assurance can be given that these expectations will prove to be correct and you are cautioned not to place

undue reliance on forward‐looking statements contained herein. Some of the risks and other factors which could

cause actual results to differ materially from those expressed in the forward‐looking statements contained in this

news release, include, but are not limited to: the mineral reserve and mineral resource estimates may change and

may prove to be inaccurate; metallurgical recoveries may not be economically viable; risks associated with the

Company ceasing its mining operations during 2023; LOM estimates are based on a number of factors and

assumptions and may prove to be incorrect; the risk that the Company and Gold Fields will not agree on the manner

in which the JV will operate the AGM; actual production, costs, returns and other economic and financial performance

may vary from the Company's estimates in response to a variety of factors, many of which are not within the

Company's control; inflationary pressures and the effects thereof; the AGM has a limited operating history and is

subject to risks associated with establishing new mining operations; sustained increases in costs, or decreases in the

availability, of commodities consumed or otherwise used by the Company may adversely affect the Company; adverse

geotechnical and geological conditions (including geotechnical failures) may result in operating delays and lower

throughput or recovery, closures or damage to mine infrastructure; the ability of the Company to treat the number

of tonnes planned, recover valuable materials, remove deleterious materials and process ore, concentrate and

tailings as planned is dependent on a number of factors and assumptions which may not be present or occur as

expected; the JV’s mineral properties may experience a loss of ore due to illegal mining activities; the Company's

operations may encounter delays in or losses of production due to equipment delays or the availability of equipment;

outbreaks of COVID‐19 and other infectious diseases may have a negative impact on global financial conditions,

demand for commodities and supply chains and could adversely affect the Company’s business, financial condition

and results of operations and the market price of the common shares of the Company; the Company's operations are

subject to continuously evolving legislation, compliance with which may be difficult, uneconomic or require significant

expenditures; the Company may be unsuccessful in attracting and retaining key personnel; labour disruptions could

adversely affect the Company's operations; recoveries may be lower in the future and have a negative impact on the

Company’s financial results; the lower recoveries may persist and be detrimental to the AGM and the Company; the

Company's business is subject to risks associated with operating in a foreign country; risks related to the Company's

use of contractors; the hazards and risks normally encountered in the exploration, development and production of

gold; the Company's operations are subject to environmental hazards and compliance with applicable environmental

laws and regulations; the effects of climate change or extreme weather events may cause prolonged disruption to

the delivery of essential commodities which could negatively affect production efficiency; the Company's operations

and workforce are exposed to health and safety risks; unexpected costs and delays related to, or the failure of the

Company to obtain, necessary permits could impede the Company's operations; the Company's title to exploration,

development and mining interests can be uncertain and may be contested; geotechnical risks associated with the

design and operation of a mine and related civil structures; the Company's properties may be subject to claims by

various community stakeholders; risks related to limited access to infrastructure and water; risks associated with

establishing new mining operations; the Company's revenues are dependent on the market prices for gold, which

have experienced significant recent fluctuations; the Company may not be able to secure additional financing when

needed or on acceptable terms; the Company’s shareholders may be subject to future dilution; risks related to the

control of AGM cashflows and operation through a joint venture; risks related to changes in interest rates and foreign

currency exchange rates; risks relating to credit rating downgrades; changes to taxation laws applicable to the

Company may affect the Company's profitability and ability to repatriate funds; risks related to the Company's

internal controls over financial reporting and compliance with applicable accounting regulations and securities laws;

risks related to information systems security threats; non‐compliance with public disclosure obligations could have

an adverse effect on the Company’s stock price; the carrying value of the Company's assets may change and these

assets may be subject to impairment charges; risks associated with changes in reporting standards; the Company's

primary asset is held through a joint venture, which exposes the Company to risks inherent to joint ventures, including

disagreements with joint venture partners and similar risks; the Company may be liable for uninsured or partially

insured losses; the Company may be subject to litigation; damage to the Company’s reputation could result in

decreased investor confidence and increased challenges in developing and maintaining community relations which

may have adverse effects on the business, results of operations and financial conditions of the joint venture and the

Company and the Company’s share price; the Company may be unsuccessful in identifying targets for acquisition or

completing suitable corporate transactions, and any such transactions may not be beneficial to the Company or its

shareholders; the Company must compete with other mining companies and individuals for mining interests; the

Company’s growth, future profitability and ability to obtain financing may be impacted by global financial conditions;

the Company’s common shares may experience price and trading volume volatility; the Company has never paid

dividends and does not expect to do so in the foreseeable future; the Company’s shareholders may be unable to sell

significant quantities of the Company’s common shares into the public trading markets without a significant

reduction in the price of its common shares, or at all; and the risk factors described under the heading “Risk Factors”

in the Company’s Annual Information Form.

Although the Company has attempted to identify important factors that could cause actual results or events to differ

materially from those described in the forward‐looking statements, you are cautioned that this list is not exhaustive

and there may be other factors that the Company has not identified. Furthermore, the Company undertakes no

obligation to update or revise any forward‐looking statements included in, or incorporated by reference in, this news

release if these beliefs, estimates and opinions or other circumstances should change, except as otherwise required

by applicable law.

Neither the Toronto Stock Exchange nor the Investment Industry Regulatory Organization of Canada accepts

responsibility for the adequacy or accuracy of this news release.

Source: Galiano Gold Inc.

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