TORONTO, May 26, 2022 (GLOBE NEWSWIRE) -- 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).
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.
(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”.
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:
CEO, Galane Gold Ltd.
+ 44 7905 089878