GALANE GOLD LTD. RELEASES FINANCIAL AND OPERATING RESULTS FOR
2020
TORONTO, ONTARIO -
April 28, 2021: 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 year ended December 31, 2020. All
amounts are in United States dollars unless otherwise
indicated.
A copy of the audited
consolidated financial statements for the year ended December 31,
2020 prepared in accordance with International Financial Reporting
Standards and the corresponding Management's Discussion and
Analysis will be available under the Company's profile on
www.sedar.com.
2020
Highlights
-
Positive
operating cash flow of $13,877,756 and net earnings of $4,434,028
(2019 - $2,919,378 and a loss of $3,823,364).
-
Mupane produced
27,369 ounces of gold at a head grade of 1.74 g/t and a recovery of
73.8% (2019 - 30,294 ounces at a head grade of 1.81 g/t and
recovery of 71.2%). Production was constrained in the first half of
2020 due to the COVID-19 restrictions.
-
Mupane's average
sales price achieved for 2020 was $1,766 per ounce (2019 - $1,378)
offset by an operating cash cost(1)
of $1,070 per
ounce (2019 - $1,090).
-
Galaxy produced
3,742 tonnes of concentrate containing 3,932 ounces of gold for
gross sales proceeds, on payable ounces of 2,721, of
$4,948,678.
-
In 2020, Galane
Gold made debt repayments of $4,824,898 (2019 -
$3,442,292).
-
The closing cash
balance at December 31, 2020 was $4,971,880 (2019 -
$2,201,853).
-
A new technical
report and preliminary economic assessment (the "PEA") was produced
for Galaxy that showed:(3)(4)
-
A sixty percent
increase, 891,773 ounces, in all resource categories when compared
to the previous technical report to give a new total of 970,904
ounces of measured and indicated mineral resources, and 1,409,764
ounces of inferred mineral resources.
-
New Preliminary
Economic Assessment, modelled at an average gold price of $1,466
per ounce, with:
-
an initial 11
year mine plan;
-
producing 413,421
ounces;
-
at an all in
sustainable cost of $747 per ounce; and
-
a peak funding
requirement of approximately $600,000.
-
At a gold price
of $1,700 per ounce and a 11-year life, the project has an internal
rate of return of 1,498% and a NPV (5%) of $147
million.(5)
Galane Gold CEO, Nick Brodie
commented: "In 2020, as with the rest of the world, we faced the
challenges resulting from the impacts of the COVID-19 pandemic. It
is a testament to our teams in Botswana and South Africa that we
managed to prioritise the health and safety of our employees, while
still ensuring the continuation of economic operations and the
advancement of our projects.
This has given us a stable
platform to take into 2021 from which we can leverage our goals of
continuing to grow our operations both organically and through
acquisitions.(2)
As an executive
management team, we are focused on the expansion of Galaxy to reach
the Phase 2 target annual production of 43,000 ounces per annum at
an all-in cost of $747 per ounce, the addition of resources at
Mupane to continue to extend life and the closing of the
acquisition of the Summit Mine and the Banner Mill in New Mexico,
following which we plan to bring the mine out of care and
maintenance and back into production.(2)
We relish the
challenge and are looking forward to what we believe will be a
transformative two years for Galane.(2)"
About
Galane Gold
Galane Gold is an un-hedged
gold producer and explorer with mining operations and exploration
tenements in Botswana and South Africa. 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)Total
operating 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 year ended
December 31, 2020, 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".
(3)Information
based on the PEA entitled "NI 43-101
Technical Report on the Galaxy Gold Mine, South Africa" issued on
July 3, 2020, with an effective date of June 29, 2020, 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 PEA
is available under the Company's profile on www.sedar.com.
(4)The
PEA 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.
(5)Based
on the valuation information and assumptions contained in the PEA,
with the exception of the replacement of the gold price of $1,466
as stated in the PEA, with a gold price of $1,700.
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 plans to expand Galaxy, plans
to extend life at Mupane, the closing of the acquisition of the
Summit Mine and Banner
Mill, 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. Forward-looking statements may specifically include,
without limitation, statements relating to the Company's ability to conduct operations
amid COVID-19 related restrictions; the Company's ability to put
proper controls in place to retain funds and minimize the financial
effect of COVID-19; the estimated impact of COVID-19
on the
Company's
business and operations; and the ability of the Company to complete
its Preliminary Economic
Assessment to support the Phase 2 expansion at
Galaxy. 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 Botswana and South Africa; regulatory, consent or
permitting delays; risks relating to the Company's exploration,
development and mining activities being situated in Botswana and
South Africa; 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 Business
Development Manager for Galane 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 Brodie
CEO, Galane Gold
Ltd.
+ 44 7905 089878
Nick.Brodie@GalaneGold.com
www.GalaneGold.com