Galiano GOLD Reports Q4 and Full Year 2020 Results
(All dollar amounts are United States dollars unless otherwise stated)
GALIANO GOLD REPORTS Q4 AND FULL YEAR 2020 RESULTS
Vancouver, British Columbia, March 11, 2021 – Galiano Gold Inc. (“ Galiano” or the “Company”) (TSX,
NYSE American: GAU) reports fourth quarter (“Q4”) 2020 operating and financial results for Company
and 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.
Highlights of the Asanko Gold Mine (on a 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.
• Strong cash generation: Generated $152.3 million of cash flows from operating activities (after taking
into account unfavourable working capital changes of $30.7 million) and free cash flow 1 of $66.9
million during 2020.
• Return of capital: Returned $75.0m to joint venture participants through cash distributions in 2020.
• Consistent cost performance: For the year ended December 31, 2020, total cash costs per ounce1 of
$889 and all -in sustaining costs 1 (“AISC”) of $1,115/oz, below revised guid ance (as of Q3 2020) of
$1,150/oz.
Highlights of the Company
• Record earnings: Generated net income after tax for the year of $57.4 million or $0.26 per share.
• Stable balance sheet: Cash on hand of $62.2 million and $2.9 million in receivables at December 31,
2020, while remaining debt free.
• Refreshed Board and Vancouver based management team: During the year, appointed Paul Wright
as Chair of the Board of Directors, formed a new Sustainability sub-committee of the Board under
the leadership of Chair of the Sustainability Committee Judith Mosely and augmented the Vancouver-
based management team with the appointment of a Chief Operating Officer and various other senior
management positions.
“2020 was a strong operational year at the Asanko Gold Mine, despite the challenges presented by COVID-
19” said Greg McCunn, Chief Executive Officer. “The AGM exceeded annual production guidance for a
second consecutive year, generated record operating cash flows, and executed on a number of exploration
programs with promising results at Nkran, Akwasiso and Miradani North. At the corporate level, we
delivered record earnings in 2020 and have strengthened our balance shee t with corporate treasury
growing to in excess of $62m.”
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Asanko Gold Mine - Summary of FY 2020 and Q4 2020 Operational and Financial Results (100% basis)
Three months ended
December 31
Year ended
December 31
Asanko Gold Mine (100% basis) 2020 2019 2020 2019
Ore mined (‘000t) 1,964 1,405 6,193 5,071
Waste mined (‘000t) 11,773 4,956 38,272 25,719
Total mined (‘000t) 13,737 6,361 44,465 30,790
Strip ratio (W:O) 6.0 3.5 6.2 5.1
Average gold grade mined (g/t) 1.4 1.6 1.5 1.5
Mining cost ($/t mined) 3.20 4.86 3.40 4.52
Ore transportation from Esaase (‘000 t) 622 357 2,133 1,464
Ore transportation cost ($/t trucked) 7.15 8.62 7.65 8.83
Ore milled (‘000t) 1,438 1,460 5,943 5,498
Average mill head grade (g/t) 1.5 1.5 1.4 1.5
Average recovery rate (%) 95 94 94 94
Processing cost ($/t treated) 10.46 10.83 10.51 10.91
Gold production (oz) 65,571 66,112 249,904 251,044
Gold sales (oz) 60,655 66,095 243,807 248,862
Average realized gold price ($/oz) 1,828 1,465 1,711 1,376
Operating cash costs1 ($/oz) 801 790 803 776
Total cash costs1 ($/oz) 892 863 889 845
All-in sustaining costs1 ($/oz) 1,179 969 1,115 1,112
All-in sustaining margin1 ($/oz) 649 496 596 264
All-in sustaining margin1 ($m) 39.4 32.8 145.3 65.7
Revenue ($m) 111.1 97.1 418.1 341.0
Income from mine operations ($m) 46.3 9.1 147.9 29.2
Cash provided by operating activities ($m) 48.0 45.4 152.3 120.4
Free cash flow1 ($m) 21.5 28.9 66.9 44.0
• There was one Lost Time Injury (“LTI”) and three Total Recordable Injuries (“TRI”) reported during
the quarter. The AGM’s LTI and TRI frequency rates for the three months ended December 31, 2020
were 0.37 and 1.10 per million employee hours worked, respectively.
• Produced 65,571 and 249,904 ounces of gold in Q4 2020 and FY 2020, respectively, exceeding the
upper-end of 2020 production guidance of 225,000-245,000 ounces.
• Sold 60,655 ounces of gold in Q4 2020 at an average realized gold price of $1,828/oz for record total
gold sales proceeds of $ 110.9 million, an increase of $ 14.0 million from Q4 20 19. The increase in
revenue quarter-on-quarter was a function of a 25% improvement in average realized gold prices,
partly offset by an 8% decrease in sales volumes in Q4 2020.
• The AGM incurred operating cash costs per ounce1, total cash costs per ounce1 and AISC1 per ounce
of $801, $892 and $1,179, respectively, in Q4 2020.
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• Total cost of sales (including depreciation and depletion and royalties) amounted to $64.8 million in
Q4 2020, a decrease of $23.2 million from Q4 2019. The decrease in cost of sales was primarily due
to lower depreciation and depletion expense associated with a lower depreciable asset cost base in
the current quarter . This factor was partly offset by a higher royalty expense arising from
improvement in the gold price during Q4 2020 compared to Q4 2019.
• Net income for Q4 2020 totaled $41.5 million compared to a net loss of $285.1 million in Q4 2019.
The Q4 2019 net loss was due to an impairment recognized on the AGM’s non -current assets
associated with an updated LOM plan. The remaining improvement in net income during the current
quarter was due to higher realized gold prices and the above -mentioned reduction in depreciation
and depletion expense.
• The AGM generated $48.0 million of cash flows from operating activities (after taking into account
unfavorable working capital changes of $5.9 million) and free c ash flow1 of $21.5 million during Q4
2020. This compares to $45.4 million of cash flows from operating activities (after taking into account
favorable working capital changes of $11.6 million) and $28.9 million of free cash flow 1 during Q4
2019. The reduction in free cash flow1 was the result of a $17.5 million unfavorable increase in cash
invested in non -cash working capital when comparing Q4 2020 to Q4 2019 and a $10.0 million
increase in cash flows associated with capital expenditures during Q4 2020. These factors were partly
offset by a $17.0 million increase in the AGM’s Adjusted EBITDA1.
• AISC1 for the FY 2020 was $1,115/oz, below revised guidance (as of Q3 2020) of $1,150/oz, and was
in line with FY 2019 AISC1 of $1,112/oz.
• Reported Adjusted EBITDA1 of $169.0 million in FY 2020 compared to $99.4 million in FY 2019.
• For FY 2020, the JV generated $ 152.3 million in operating cash flow and free cash flow 1 of $66.9
million.
• As at December 31, 2020, the JV held cash and cash equivalents of $64.3 million (including $30.0
million fully drawn on the AGM’s revolving credit facility), $10.9 million in receivables from gold sales
and $8.2 million in gold on hand.
Galiano Gold Inc. – Summary FY 2020 and Q4 2020 Financial Results
Three months ended
December 31
Year ended
December 31
Galiano Gold Inc. (consolidated) 2020 2019 2020 2019
Net income (loss) after tax ($m) 17.7 (21.2) 57.4 (167.9)
Net income (loss) after tax per share $0.08 ($0.09) $0.26 ($0.74)
Adjusted net income (loss)1 ($m) 17.7 0.9 57.4 2.5
Adjusted net income (loss) per share1 $0.08 $0.00 $0.26 $0.01
Adjusted EBITDA1 ($m) 20.4 12.6 68.3 36.0
• The Company reported net income after tax of $17.7 million in Q4 2020 compared to a net loss after
tax of $21.2 million in Q4 2019. The improvement in earnings during Q4 2020 was predominantly due
to the fact that the Q4 2019 net loss included a $20.2 million downward fair value adjustment on the
Company’s redeemable preference shares in the JV associated with an update to the AGM LOM plan.
Additionally, the improvement in earnings in Q4 2020 was also partly due to an increase in the
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Company’s 45% interest in the net earnings of the JV which totaled $18.7 million for the quarter.
• Reported Adjusted EBITDA1 of $20.4 million for Q4 2020, compared to $12.6 million in Q4 2019. The
increase in Adjusted EBITDA1 was primarily a result of the increase in the Company’s interest in the
AGM’s net earnings.
• For FY 2020, the Company reported net income after tax of $57.4 million compared to a net lo ss of
$167.9 million in FY 2019. The improvement in earnings in FY 2020 was due to an increase in the
Company’s 45% interest in the net earnings of the JV which totaled $59.2 million for the year, while
FY 2019 including impairment charges associated with an update to the AGM’s LOM plan.
• Reported Adjusted EBITDA1 of $68.3 million for FY 2020 compared to $36.0 million in FY 2019. The
improvement in Adjusted EBITDA1 was primarily a result of an increase in the Company’s interest in
the AGM’s net earnings.
• The Company held cash and cash equivalents of $62.2 million and $2.9 million in receivables as at
December 31, 2020, while remaining debt-free.
2021 Outlook
In 2021, the AGM is targeting 225,000 to 245,000 ounces of gold production at AISC1 of $1,100 to $1,300
per ounce. AISC1 includes budgeted sustaining capital expenditures of $20 million, with approximately $13
million for a tailings storage facility lift.
The mine plan for 2021 plans to source ore primarily from Akwasiso and Esaase. These ore sources are
expected to be augmented where necessary with run‐of‐mine stockpile material. Accordingly, budgeted
AISC1 for 2021 includes approximately $60 to $80 per ou nce of non -cash charges associated with
processing stockpiled ore.
Development capital is forecast at $ 18 million, primarily for completion of the Tetrem village relocation
and work on the Obotan and Esaase water treatment plants. In addition, $20 million is budgeted for
exploration, mainly around the Miradani mineralized trend.
This news release should be read in conjunction with Galiano’s Management’s Discussion and
Analysis and the Consolidated Annual Financial Statements for the years ended December 31, 2020
and 2019, which are available at www.galianogold.com and filed on SEDAR.
1 Non-GAAP Performance Measures
The Company has included certain non -GAAP performance measures in this press release. These non -GAAP
performance measures do not have any standardized meaning. 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 GAAP. Refer to the Non -GAAP Measures section of Galiano’s
Management 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.
• Operating Cash Costs per ounce and Total Cash Costs per ounce
Operating cash costs are reflective of the cost of production, adjusted for share-based payments and by-product
revenue per ounce of gold sold. Total cash costs include production royalties of 5%. Excluded from operating
cash costs are one-time severance charges.
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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” (“AISC”) 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.
• 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 pres entation 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 contractors for leases capitalized under IFRS 16.
Enquiries:
Peter Lekich
VP Investor Relations
Toll-Free (N. America): 1-855-246-7341
Telephone: 1-778-729-0608
Email: [email protected]
About Galiano Gold Inc.
Galiano is focused on creating a 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 th e 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.
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, whi ch 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 act ion. 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”, “estim ate”, “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: estimates regarding the value of the
gold currently held at the AGM; expectations with respect to the Company’s exploration program, including the
expected results therefrom and the associated impact on the AGM’s mineral reserve and resource estimates, the
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timelines associated therewith, additional follow-on exploration programs, the ability of the exploration program to
replace depletion from mining operations and the expected cost of the exploration program; statements with respect
to future sales pursuant to the Company’s at -the-market offering; statements with respect to planned mining and
development operations at the AGM for 2021; expectations regarding development capital; expected gold
production; and cost estimates. Such forward -looking statements are based on a number of material factors and
assumptions, including, but not limited to: the ability of the AGM to continue to operate during the COVID -19
pandemic; that gold production and other activities will not be curtailed as a result of the COVID -19 pandemic; that
the AGM will be able to continue to ship dor é from the AGM site to be refined; that the doré produced by the AGM
will continue to be able to be refined at similar rates and costs to the AGM, or at all; that the other current or potential
future effects of the COVID -19 pandemic on the Company’s business, operations and financial position, including
restrictions on the movement of persons (and in particular, the AGM’s workforce), restrictions on business activities,
including access to the AGM, restrictions on the transport of goods, trade restrictions, increases in the cost of
necessary inputs, reductions in the availability of necessary inputs and productivity and op erational constraints, will
not impact its 202 1 production and cost guidance; that the Company’s and the AGM’s responses to the COVID -19
pandemic will be effective in continuing its operations in the ordinary course; the accuracy of the estimates and
assumptions underlying the Mineral Resource and Mineral Reserve estimates, including future gold prices, cut -off
grades and production and processing estimates; the successful completion of development and exploration projects,
planned expansions or other proj ects within the timelines anticipated and at anticipated production levels; that
mineral resources can be developed as planned; that the Company’s relationship with joint venture partners will
continue to be positive and beneficial to the Company; interest and exchange rates; that required financing and
permits will be obtained; general economic conditions; that labour disputes or disruptions, flooding, ground
instability, geotechnical failure, fire, failure of plant, equipment or processes to operate are as anticipated and other
risks of the mining industry will not be encountered; that contracted parties provide goods or services in a timely
manner; that there is no material adverse change in the price of gold or other metals; competitive conditions in the
mining industry; title to mineral properties; costs; taxes; the retention of the Company’s key personnel; and changes
in laws, rules and regulations applicable to Galiano.
Forward-looking statements involve known and unknown risks, uncertainties and othe r 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 materia lly from those expressed in the forward -looking statements contained in this
news release, include, but are not limited to: the Company’s and/or the AGM’s operations may be curtailed or halted
entirely as a result of the COVID -19 pandemic, whether as a res ult of governmental or regulatory law or
pronouncement, or otherwise; that the dor é produced at the AGM may not be able to be refined at expected levels,
on expected terms or at all; that the Company and/or the AGM will experience increased operating costs as a result
of the COVID -19 pandemic; that the AGM may not be able to source neces sary inputs on commercially reasonable
terms, or at all; the Company’s and the AGM’s responses to the COVID -19 pandemic may not be successful in
continuing its operations in the ordinary course; mineral reserve and resource estimates may change and may prove
to be inaccurate; life of mine estimates are based on a number of factors and assumptions and may prove to be
incorrect; 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; 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; adverse geotechnical and geological conditions (including geotechnical failures)
may result in operating delays and lower throughput or recovery, closures or damage to min e 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 Company’s operations may encounter delays in or losses of
production due to equipment delays or the availability of equipment; the Company’s operations are subject to
continuously evolving legislation, compliance wi th which may be difficult, uneconomic or require significant
expenditures; the Company may be unsuccessful in attracting and retaining key personnel; labour disruptions could
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adversely affect the Company’s operations; the Company’s business is subject to r isks 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 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 co uld impede the Company’s operations; the Company’s title to exploration, development and
mining interests can be uncertain and may be contested; the Company’s properties may be subject to claims by
various community stakeholders; risks related to limited a ccess to infrastructure and water; the Company’s
exploration programs may not successfully expand its current mineral reserves or replace them with new reserves;
the Company’s common shares may experience price and trading volume volatility; 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; Company shareholders may be
subject to future dilution; risks related to changes in interest rates and foreign currency exchange rates; changes to
taxation laws applicable to the Company may affect the Company’s profitability and ability to repatriate funds; the
Company’s primary asset is held through a jo int venture, which exposes the Company to risks inherent to joint
ventures, including disagreements with joint venture partners and similar risks; risks related to the Company’s
internal controls over financial reporting and compliance with applicable accounting regulations and securities laws;
the carrying value of the Company’s assets may change and these assets may be subject to impairment charges; the
Company may be liable for uninsured or partially insured losses; the Company may be subject to litigati on; 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 compani es and individuals for mining interests; and risks related to information systems security
threats.
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 Toronto Stock Exchange nor the Investment Industry Regulatory Org anization of Canada accepts
responsibility for the adequacy or accuracy of this release.
Source: Galiano Gold Inc.