Golconda Gold Ltd. (“Golconda Gold” or the “Company”) (TSX-V: GG;
OTCQB: GGGOF) is pleased to announce the release of its financial
results for the year ended December 31, 2022. All amounts are in
United States dollars unless otherwise indicated.
A copy of the audited consolidated financial
statements for the year ended December 31, 2022 prepared in
accordance with International Financial Reporting Standards and the
corresponding Management’s Discussion and Analysis (the “MD&A”)
will be available under the Company’s profile on www.sedar.com.
2022 Highlights
- For the year
ended December 31, 2022, at its Galaxy property (“Galaxy”), the
Company:
- mined 91,744
tonnes of ore, from its Galaxy and Princeton ore bodies, with an
average grade of 3.22 grammes per tonne (g/t) compared to 62,086
tonnes at 4.75 g/t in the year ended December 31, 2021;
- reclaimed 38,197
tonnes of historic tailings with an average grade of 0.80 g/t
compared to 54,162 tonnes at 0.85 g/t in the year ended December
31, 2021;
- produced 9,102
tonnes of concentrate at an average grade of 34.0 g/t containing
9,961 ounces of gold compared to 8,349 tonnes at 31.0 g/t
containing 8,319 ounces of gold in the year ended December 31,
2021; and
- generated
revenue of $13.2 million from the sale of 9,770 contained ounces
(7,367 payable ounces) of gold at an operating cash cost of $1,353
per payable ounce compared to $9.2 million revenue for the year
ended December 31, 2021 at an operating cash cost of $1,677 per
payable ounce.(1)
- In addition, as
previously reported, the Company also achieved the following
significant milestones during the year ended December 31, 2022:
- completed the sale of Mupane Gold
Mining Proprietary Limited (“Mupane”) to Hawks Mining Company
Proprietary Limited;
- signed and commenced deliveries
under a new offtake agreement for the Galaxy operation with Ocean
Partners UK Limited and an associated unsecured $3 million
revolving finance facility;
- fully repaid the Barak $5 million
secured facility;
- produced an updated Preliminary
Economic Assessment (the “PEA”) of the Summit Mine and Banner Mill
in New Mexico(2); and
- mining of the total footprint of the
Galaxy Ore Body(3) at 22 level generated 29% more ounces than
forecasted.
Golconda Gold CEO, Nick Brodie commented: “2022
was another positive year for Golconda Gold, notably achieving a
20% increase in production at Galaxy and a 19% reduction in cash
costs, significantly improving the Company’s balance sheet through
the removal of $17 million of liabilities associated with Mupane
and the full repayment of the $5 million senior secured loan
facility and demonstrating the robust economics of the Summit
project through the release of an updated preliminary economic
assessment.
We have moved into 2023 with clear goals in
mind, specifically to continue to materially increase production at
Galaxy and reduce unit costs and progress with funding the restart
of the Summit project as soon as possible.”(4)
About Golconda Gold
Golconda Gold is an un-hedged gold producer and
explorer with mining operations and exploration tenements in South
Africa and New Mexico. Golconda Gold is a public company and its
shares are quoted on the TSX Venture Exchange under the symbol “GG”
and the OTCQB under the symbol “GGGOF”. Golconda Gold’s management
team is comprised of senior mining professionals with extensive
experience in managing mining and processing operations and
large-scale exploration programmes. Golconda Gold is committed to
operating at world-class standards and is focused on the safety of
its employees, respecting the environment, and contributing to the
communities in which it operates.
Notes:
(1) Cash cost is a non-GAAP
measure. Refer to below and “Supplemental Information to the
MD&A” for reconciliation to measure reported in the Company’s
financial statements.
|
FY 2022 |
Q4 2021 |
Operating costs (US$) |
11,506,339 |
|
3,286,000 |
|
Adjust for: |
|
|
Depreciation and depletion |
(1,085,629 |
) |
(650,998 |
) |
Inventory movement |
48,659 |
|
163,994 |
|
Total operating cash cost |
10,469,369 |
|
2,798,996 |
|
Royalties |
(272,809 |
) |
(82,360 |
) |
Total operating cash cost excluding royalties |
10,196,560 |
|
2,716,636 |
|
Gold production (payable ozs) |
7,536 |
|
1,620 |
|
Total operating cash cost excluding royalties per payable
oz |
1,353 |
|
1,677 |
|
(2) The PEA
is an update of the economic model provided by Waterton Precious
Metals Fund II Cayman, the previous owner of Summit, to the Company
with an effective date of September 17, 2014, which was
included in the "Technical Report, Preliminary Economic Assessment,
Summit Gold-Silver Project, Grant and Hidalgo Counties, New
Mexico", prepared by Douglas F. Irving, P.E., Susan C. Bird,
P.Eng., and Tracey D. Meintjes, P. Eng. of Chapman, Wood and
Griswold, Inc. in Albuquerque, New Mexico. The PEA has been updated
by the creation of a new mine plan, updated costings, revised
off-take terms and updated metal prices. The updated PEA is
preliminary in nature, and includes inferred mineral resources that
are considered too speculative geologically to have the economic
considerations applied to them that would enable them to be
categorized as mineral reserves. There is no certainty that the
updated PEA will be realized. Please see the Company’s press
release dated June 27, 2022 for further
details.(3) The deposits at the
Galaxy mine are supported by a technical report entitled “NI 43-101
Technical Report on the Galaxy Gold Mine, South Africa” which was
issued on July 3, 2020 (the “Galaxy Technical Report”), with an
effective date of June 29, 2020, a copy of which is available under
the Company’s profile on www.sedar.com. The Galaxy Technical Report
was prepared by Minxcon (Pty) Ltd and approved by Mr. Uwe
Engelmann, BSc (Zoo. & Bot.), BSc Hons (Geol.) Pr.Sci.Nat.,
MGSSA, and Mr. Daniel (Daan) van Heerden, B Eng (Min.), MCom (Bus.
Admin.), MMC, Pr.Eng., FSAIMM, AMMSA, both “qualified persons” as
defined by National Instrument 43-101 – Standards of Disclosure for
Mineral Projects (“NI 43-101”), and independent of the Company for
the purposes of NI 43-101. The preliminary economic assessment
(“PEA”) supported by the Galaxy Technical Report is preliminary in
nature as the resources included in the PEA are comprised 54% of
inferred mineral resources. Inferred mineral resources are
considered too speculative geologically to have the economic
considerations applied to them that would enable them to be
categorized as mineral reserves. There is no certainty that the PEA
will be realized.(4) This is
forward-looking information and is based on a number of assumption.
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 the
Company’s goals to materially increase production at Galaxy, to
reduce unit costs and progress with funding the restart of the
Summit project, and 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.
Information of a technical and scientific nature
that forms the basis of the disclosure in the press release has
been prepared and approved by Kevin Crossling Pr. Sci. Nat.,
MAusIMM. and former Business Development Manager for Golconda Gold,
and a “qualified person” as defined by NI 43-101. Mr. Crossling has
verified the technical and scientific data disclosed herein and has
conducted appropriate verification on the underlying data.
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, Golconda Gold Ltd.+ 44 7905
089878Nick.Brodie@GolcondaGold.comwww.GolcondaGold.com
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