Galane Gold Ltd. (“Galane Gold” or the Company”) (TSX-V: GG; OTCQB:
GGGOF) is pleased to announce the release of its financial results
for the three months ended March 31, 2022.
A copy of the unaudited condensed consolidated
interim financial statements for the three months ended March 31,
2022 prepared in accordance with International Financial Reporting
Standards and the corresponding Management’s Discussion and
Analysis are available under the Company’s profile on
www.sedar.com. All references to “$” in this press release refer to
United States dollars.
First Quarter 2022 Highlights
- Produced 2,286 tonnes of
concentrate containing 3,143 ounces of gold (Q4 2021 - 2,662 tonnes
of concentrate containing 2,440 ounces of gold) at Galaxy.
- 2,357 payable ounces of gold
produced at an operating cash cost before royalties of $1,067 per
ounce (Q4 2021 - 1,620 payable ounces at an operating cash cost
before royalties of $1,677 per ounce) at Galaxy (1).
- Positive cash flows from operating
activities before working capital of $1.6 million (Q1 2021 - $1.5
million operating cash outflow).
- $1.1 million of debt repaid,
resulting in net debt of $0.8 million (Q4 2021 - $1.4
million).
Galaxy Update
In April 2022, Durban, South Africa suffered
severe flooding as a result of unseasonably high rain fall.
The Port of Durban was impacted by these floods including the
warehouse that the Company uses to store its gold concentrate
before it is exported overseas for smelting. Subsequent to
the floods, the Company has been able to physically verify over 99%
of its concentrate that was in the warehouse at the time of the
flood, meaning that there are no material loses anticipated,
however, there has been a delay to the time it is taking to
finalise, ship and receive any remaining payments for those
concentrate lots that were not fully paid at the time of the
flood. A new warehouse facility has been set up on the
outskirts of Durban which is accepting all new concentrate
production from the Galaxy mine and payment for concentrate
production going forward is not expected to be materially
impacted(2).
Galane Gold CEO, Nick Brodie commented: “The
results for Galaxy for the first quarter are very encouraging with
production increasing and cash costs reducing. We will work to
build on this trend in the second quarter as we progress with our
ramp up and expansion plans (2).
With the sale of Mupane now completed we have
recharged our balance sheet and are looking to push ahead at both
Galaxy and Summit by leveraging off a much-strengthened financial
position(2).”
Name Change and
Consolidation
At the Company’s annual and special meeting of
shareholders on June 23, 2022, management will be seeking
shareholder approval for (a) the change of the Company’s name to
“Golconda Gold Ltd.” (the “Name Change”) and (b) the consolidation
of the Company’s outstanding common shares on the basis of one new
common share for every five existing common shares (the
“Consolidation”). The effective date of the Name Change and
Consolidation will be determined by the board of directors after
all necessary approvals have been obtained.
The Company believes the proposed new name,
“Golconda Gold Ltd.”, will more accurately represent the Company
today and going forward. The name “Galane Gold Ltd.” is associated
with, and was chosen specifically to complement, the Mupane Gold
Mine. With the divestment of Mupane, the Company believes a new
name will make it clear to current stakeholders and future
stakeholders that the Company no longer owns Mupane and is
concentrating on progressing both Galaxy Gold and the Summit Mine
and Banner Mill(2).
As a result of the Consolidation, the
356,366,541 common shares issued and outstanding prior to the
Consolidation will be reduced to approximately 71,273,308 common
shares. Each shareholder’s percentage ownership in the Company and
proportionate voting power will remain unchanged after the
Consolidation, except for minor changes and adjustments resulting
from the treatment of any fractional common shares.
The Company believes that the share price and
the number of shares outstanding following the Consolidation will
more appropriately reflect the Company’s status as a junior gold
producer. Based on investor feedback, management believes that
while the higher share count and lower share price was appealing to
certain investors, the new proposed capital structure will be more
appealing to prospective institutional shareholders and will aid
management in its efforts to expand and diversify the Company’s
shareholder base with an ultimate goal of more liquidity and a
trading price that more accurately reflects the underlying value
and future potential of the Company’s operations(2).
Galane Gold CEO, Nick Brodie commented: “We have
transitioned away from Mupane, and our core asset is now Galaxy.
Galaxy has produced gold on some basis for over 130 years and we
believe will continue as a multi-generational, low-cost operation.
With the transformation of our balance sheet, cost structure, and
asset base, we felt that it was important that the Company
recognized this by changing its name to better represent its new
status. Golconda was the name of a historic mine that was believed
to be so productive that the word ‘golconda’ was adopted into the
English language as a noun referring to a source of wealth,
happiness and great fortune. We are optimistic that Golconda Gold
will live up to its name as we continue to develop the Galaxy mine,
advance the Summit Mine, and pursue other opportunities to leverage
our experience and capabilities to deliver returns for
shareholders(2).”
The Name Change and Consolidation are subject to
various approvals, including approval by the Company’s Shareholders
and the TSX Venture Exchange.
About Galane Gold
Galane Gold is an un-hedged gold producer and
explorer with mining operations and exploration tenements in South
Africa and New Mexico. Galane Gold is a public company and its
shares are quoted on the TSX Venture Exchange under the symbol “GG”
and the OTCQB under the symbol “GGGOF”. Galane Gold’s management
team is comprised of senior mining professionals with extensive
experience in managing mining and processing operations and
large-scale exploration programmes. Galane Gold is committed to
operating at world-class standards and is focused on the safety of
its employees, respecting the environment, and contributing to the
communities in which it operates.
Notes:
(1) Cash cost
is a non-GAAP measure. Refer to “Supplemental Information to
Management’s Discussion and Analysis” in the Company’s Management’s
Discussion and Analysis for the three months ended March 31, 2022,
for reconciliation to measures reported in the Company’s financial
statements.(2) This is
forward-looking information and is based on a number of
assumptions. See “Cautionary Notes”.
Cautionary Notes
Certain statements contained in this press
release constitute “forward-looking statements”. All statements
other than statements of historical fact contained in this press
release, including, without limitation, those regarding Company’s
ability to ramp up and expand operations at Galaxy, the Company’s
ability to recommence production at the Summit Mine, the Company’s
ability attain the necessary approvals for the Name Change and
Consolidation, the Company’s future financial position and results
of operations, strategy, proposed acquisitions, plans, objectives,
goals and targets, and any statements preceded by, followed by or
that include the words “believe”, “expect”, “aim”, “intend”,
“plan”, “continue”, “will”, “may”, “would”, “anticipate”,
“estimate”, “forecast”, “predict”, “project”, “seek”, “should” or
similar expressions or the negative thereof, are forward-looking
statements. These statements are not historical facts but instead
represent only the Company’s expectations, estimates and
projections regarding future events. These statements are not
guarantees of future performance and involve assumptions, risks and
uncertainties that are difficult to predict. Therefore, actual
results may differ materially from what is expressed, implied or
forecasted in such forward-looking statements.
Additional factors that could cause actual
results, performance or achievements to differ materially include,
but are not limited to: the Company’s dependence on two mineral
projects; gold price volatility; risks associated with the conduct
of the Company’s mining activities in South Africa and New Mexico;
regulatory, consent or permitting delays; risks relating to the
Company’s exploration, development and mining activities being
situated in South Africa and New Mexico; risks relating to reliance
on the Company’s management team and outside contractors; risks
regarding mineral resources and reserves; the Company’s inability
to obtain insurance to cover all risks, on a commercially
reasonable basis or at all; currency fluctuations; risks regarding
the failure to generate sufficient cash flow from operations; risks
relating to project financing and equity issuances; risks arising
from the Company’s fair value estimates with respect to the
carrying amount of mineral interests; mining tax regimes; risks
arising from holding derivative instruments; the Company’s need to
replace reserves depleted by production; risks and unknowns
inherent in all mining projects, including the inaccuracy of
reserves and resources, metallurgical recoveries and capital and
operating costs of such projects; contests over title to
properties, particularly title to undeveloped properties; laws and
regulations governing the environment, health and safety; the
ability of the communities in which the Company operates to manage
and cope with the implications of COVID-19; the economic and
financial implications of COVID-19 to the Company; operating or
technical difficulties in connection with mining or development
activities; lack of infrastructure; employee relations, labour
unrest or unavailability; health risks in Africa; the Company’s
interactions with surrounding communities and artisanal miners; the
Company’s ability to successfully integrate acquired assets; risks
related to restarting production; the speculative nature of
exploration and development, including the risks of diminishing
quantities or grades of reserves; development of the Company’s
exploration properties into commercially viable mines; stock market
volatility; conflicts of interest among certain directors and
officers; lack of liquidity for shareholders of the Company; risks
related to the market perception of junior gold companies; and
litigation risk. Management provides forward-looking statements
because it believes they provide useful information to investors
when considering their investment objectives and cautions investors
not to place undue reliance on forward-looking information.
Consequently, all of the forward-looking statements made in this
press release are qualified by these cautionary statements and
other cautionary statements or factors contained herein, and there
can be no assurance that the actual results or developments will be
realized or, even if substantially realized, that they will have
the expected consequences to, or effects on, the Company. These
forward-looking statements are made as of the date of this press
release and the Company assumes no obligation to update or revise
them to reflect subsequent information, events or circumstances or
otherwise, except as required by law.
Neither the TSX Venture Exchange nor its
regulation services provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
For further information please
contact:Nick BrodieCEO, Galane Gold Ltd.+ 44 7905
089878Nick.Brodie@GalaneGold.comwww.GalaneGold.com
Golconda Gold (TSXV:GG)
Historical Stock Chart
From Nov 2024 to Dec 2024
Golconda Gold (TSXV:GG)
Historical Stock Chart
From Dec 2023 to Dec 2024