Galiano Gold Q1 2025 Earnings Report

Galiano Gold EPS Results

• Actual EPS: N/A
• Consensus EPS: -$0.01
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Galiano Gold Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $71.00 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Galiano Gold Announcement Details

• Quarter: Q1 2025
• Date: 5/14/2025
• Time: After Market Closes
• Conference Call Date: Thursday, May 15, 2025
• Conference Call Time: 10:30AM ET

Galiano Gold (NYSEAMERICAN:GAU) engages in the exploration and evaluation of gold properties in Canada. Its flagship asset is the Asanko Gold Mine that covers an area of approximately 21,000 hectares located in Ghana, West Africa. The company was formerly known as Asanko Gold Inc. and changed its name to Galiano Gold Inc. in May 2020. Galiano Gold Inc. was incorporated in 1999 and is headquartered in Vancouver, Canada.

Galiano Gold Q1 2025 Earnings Call Transcript

Key Takeaways

• Galiano reported two lost‐time injuries (LTI) and three total recordable injuries (TRI) in Q1, equating to a 12-month LTI frequency rate of 0.43 per million man-hours, and launched enhanced safety campaigns to pursue its zero‐harm goal.
• Gold production of just under 21,000 ounces was below budget after an unscheduled two-week SAG mill shutdown reduced recovered ounces by ~5,000, though mill throughput and ore grades remained consistent with Q4 levels.
• Mining costs were $3.31 per tonne and processing costs $14.37 per tonne—elevated by lower throughput—with commissioning of a secondary crusher in Q3 expected to boost mill rates and drive unit costs down.
• The company ended Q1 with $106 million in cash, zero debt, and $26 million of operating cash flow, but recorded a $29 million net loss due to fair-value adjustments on its hedge book, while adjusted EBITDA was ~$26 million.
• Exploration success at Obore included doubling the strike of the South high‐grade zone to 180 m and discovering a new high‐grade zone below the main pit (50 m at 3.1 g/t Au), highlighting significant upside potential.

Presentation

[Operator]

Good morning. My name is Ina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Galiano Gold, Inc. First Quarter twenty twenty five Financial Results Conference Call. All lines have been placed on mute to prevent any background noise.

[Operator]

After the speakers' remarks, there will be a question and answer session. You. Mr. Matt Bedilak, President and CEO of Geliana Gold, you may begin your conference.

[Matt Badylak, President & CEO at Galiano Gold]

Thank you, operator, and good morning, everyone. We appreciate you taking time to join us on the call today to review our first quarter twenty twenty five Galliano Gold results that we released last night. On slide two, we'll be making forward looking statements and referring to non IFRS measures during the call. Please refer to the cautionary notes and risk disclosures in our most recent MD and A, as well as this slide of the webcast presentation. Yesterday's release details our first quarter twenty twenty five financial and operating results.

[Matt Badylak, President & CEO at Galiano Gold]

They should be read in conjunction with our first quarter financial statements and MD and available on our website and filed on CEDAR plus and EDGAR. Also, bear in mind that all dollar amounts mentioned in the conference call today are in US dollars unless otherwise noted. On slide four, with me on the call today I have Matt Freeman, our Chief Financial Officer Michael Cardinals, our Chief Operating Officer and Chris Pettman, our Vice President of Exploration. For this presentation, I'll initially provide a brief overview of the quarter. Michael will give an operations update.

[Matt Badylak, President & CEO at Galiano Gold]

Matt will discuss the financials, and Chris will review the recent exploration success his team has had at Hibori. I'll then provide some closing remarks and open the call for Q and A. Here on slide five, please note that we are discussing the AGM results on a 100% basis. Starting with safety, we had two LTIs and three TRIs during the quarter. This equates to a rolling twelve month LTI frequency rate of zero point four three and one total recordable injury per million man hours worked.

[Matt Badylak, President & CEO at Galiano Gold]

This falls short of our zero harm commitment, and during the quarter we focused on specific actions to address these incidents and strengthen our safety culture. From a mill throughput and grade perspective, the quarter proceeded largely in line with q four. That said, an unscheduled two week mill shutdown due to SAG mill repairs reduced production below initial budget projections, impacting gold recovered in the period by approximately 5,000 ounces for the quarter. Mining operations recommenced at Asasi during the quarter with initial lower grade oxide ore supplementing material mined from a borate to feed the mill. On an absolute basis, costs remained in line with expectations, though ultimately distributed across fewer ounces produced.

[Matt Badylak, President & CEO at Galiano Gold]

We have made excellent progress on strategic initiatives commencing the NCREAM waste stripping campaign in February ahead of schedule. Our financial position remains robust with $106,000,000 in cash at quarter end and zero debt. Our exploration team achieved significant success at Oboro, identifying a promising high grade zone beneath the main pit. Additional infill drilling at Obuare has strengthened our confidence in the resource model. I'll allow Chris to speak about this in more detail later.

[Matt Badylak, President & CEO at Galiano Gold]

During the quarter, we also published a five year outlook which projects 75% increase in production from twenty twenty four levels over the next eighteen months. I'd like to reiterate that Q1 production figures don't fully represent our expected run rate for the balance of the year. However, the impact of the mill shutdown will result in production moving towards the lower end of guidance in 2025. Now turning it over to Michael and a discussion on our progress in operations during the quarter.

[Michael Cardinaels, EVP & COO at Galiano Gold]

Thank you, Matt, and good morning, everyone. As Matt highlighted, during the first quarter, we unfortunately had two LTIs, resulting in a twelve month rolling frequency rate of 0.43. While this reflects an increase from the prior quarter, a number of safety initiatives were implemented to strengthen our performance moving forward. A mind wide campaign on hand safety was launched, emphasising awareness and prevention of hand related injuries. Refresher training on hazard identification and timely action closure was delivered to supervisors and managers, while a revised energy isolation procedure was introduced across the AGM.

[Michael Cardinaels, EVP & COO at Galiano Gold]

Emergency response capabilities were also reinforced through targeted training and a cyanide management simulation. Looking at our mining performance during the quarter. Re establishing the Esasi pit commenced in January and ramped up steadily in Q1, with the mining fleet now split between Obore and Esasi pits. We saw a 4% increase in material movement for the two pits compared to the fourth quarter twenty twenty four. The commencement of NCRAN stripping in February ahead of schedule resulted in an overall increase of 12% total material movement compared to Q4 twenty twenty four.

[Michael Cardinaels, EVP & COO at Galiano Gold]

Albori continues to expand now that we have completely mined through the historical Resolute pit and backfill material, opening up the pit to allow for more efficient mining practices. This, combined with establishing mining at Esasi, allowed for significantly more ore production, increasing 144% compared to Q4 twenty twenty four. On to slide seven, please. On the processing performance, as Matt mentioned, the two week mill shutdown impacted material process for the quarter. However, we were able to blend ore successfully from a Sarsi and a Borre allowing for better throughput on a tonnes per hour basis than planned.

[Michael Cardinaels, EVP & COO at Galiano Gold]

Crushing limitations will continue to restrict mill throughput until the secondary crusher is commissioned in Q3. However, our blend strategy is helping to mitigate some of the impact. The crusher project is progressing well and the majority of the critical components have been received on-site or in port awaiting customs clearance, including the crusher itself. More ore is expected to be available from Obore and Esarthi pits in the coming quarters, reducing the reliance on historical stockpiles and providing a higher grade feed source to the mill. We produced just under 21,000 ounces for the quarter, primarily impacted by the extended mill shutdown, but with the increasing availability of ore and higher grades from Arbori and Esasi in the second half of the year and the expectation of the secondary crusher being online in Q3, we are maintaining our production guidance of between 280,000 ounces.

[Michael Cardinaels, EVP & COO at Galiano Gold]

On to Slide eight, please. Unit costs for mining at Obora and Esasi are in line with our expectations and have come down to $3.31 per tonne from $3.41 per tonne in Q4 twenty twenty four. With $4.75 a tonne in Q4 twenty twenty four, with a larger percentage of material now being trucked from a bore compared to a Sasi, which has the higher unit rate being further from the Obatan ROM pad. On the back of the mill downtime, the lower tonnes milled resulted in higher than planned unit costs for the processing plant at $14.37 per tonne, although down 9% compared with the previous quarter Q4 twenty twenty four, attributable in part to feeding some historical stockpile material in Q1, which is softer than the Abore ore. We saw approximately $3,300,000 spent on development capital in the quarter, and at Encran, we spent another $3,200,000 as the waste stripping campaign commenced ahead of schedule.

[Michael Cardinaels, EVP & COO at Galiano Gold]

Site G and A for the quarter was $5.78 per tonne milled, an improvement over Q4's '6 '2 '8 dollars per tonne melt. Overall, costs are being well managed, and we should see better alignment as the year progresses and the plant processes more tonnes and we produce more ounces. So with that, I would like to turn it over to Matt Freeman to discuss the company's financial results. Slide nine, please.

[Matt Freeman, EVP & CFO at Galiano Gold]

Thanks, Mick. Good morning, everyone. On this slide, we've outlined some of the key financial metrics for the quarter. We generated revenues of $77,000,000 in the first quarter at a realized price of $2,833 per ounce, being able to sell gold at market prices having terminated the offtake agreement back in Q4. We generated positive income from mine operations of 15,400,000.0, but net earnings were negatively affected by the fair value adjustments to our hedge book following the historic run up in gold prices, such that we recorded a net loss of 29,000,000.

[Matt Freeman, EVP & CFO at Galiano Gold]

However, adjusting for the unrecognized portion of the hedge loss, adjusted income was $3,000,000 while EBITDA was approximately $26,000,000 We generated $26,000,000 in cash flows from operations and ended the period flat with respect to cash despite the ongoing stripping at Bouere, recommencing mining at Assassi and beginning the waste strip at Encrant. We continue to focus on the cost structure of the mine and are pleased that operating costs in aggregate remain consistent with recent quarters. Given production was on the low end this quarter, that does translate into higher AISC at $2,500 per ounce, but we're confident that as production increases in line with the 2025 plan that ASIC will start to fall commensurately. At this point, it is worth noting that historically high gold price, although obviously a positive for the business overall, does create some uncontrollable pressure on ASIC by increasing royalty costs. Our guidance had assumed royalties would be based on a 2,500 per ounce or approximately $125 per ounce of royalty.

[Matt Freeman, EVP & CFO at Galiano Gold]

Secondly, for our business in March the Ghanaian government increased the growth sustainability levy by 2%, which is directly applied to revenues. The impact of both high gold prices and the high levy could impact ASIC by as much as $55 per ounce based upon current spot gold prices. Mining costs as Mick noted were below $3.5 per tonne mined. This is a key component of cost structure which should help sustain margins in this high price environment. We also remain disciplined with capital deployment, only spending when critical with clear line of sight to value creation.

[Matt Freeman, EVP & CFO at Galiano Gold]

Our largest ongoing capital project is installation of the secondary crushing circuit, which is critical to maintaining throughput at or above nameplate levels, even processing harder material from N Crane and Aboure. This remains on track for completion in Q3 twenty twenty five. Additionally, capital program for the year includes the next lift of the tailings facility stage eight, which is expected to commence later this year. Slide 10 please. As we've mentioned, we continue to maintain a very strong balance sheet even during this period of high stripping, ending the period with 106,000,000 in cash and still no debt.

[Matt Freeman, EVP & CFO at Galiano Gold]

We remain in a very strong position to continue to develop Encran, invest in the exploration and continue to explore to execute on the Asanko mine plan. And with that, I'll turn it over to Chris Petman, who will in part discuss the positive drilling results we recently published.

[Chris Pettman, Vice President of Exploration at Galiano Gold]

Great. Thanks, Matt. Well, it was another busy quarter for us in exploration with two active drill programs at Aborre and Acoma, as well as various ongoing generative activities. At Acoma, our drilling targeted northeastern extensions of the mineralized shear zones along strike the positive results we achieved in 2024, with drilling now complete and results expected in Q2. Our regional generator activities have continued, including the startup of the Skygold B ground IP survey, which was designed to assist an additional drill targeting following the 2024 drilling that identified multiple large gold bearing shear zones at the Skygold prospect area.

[Chris Pettman, Vice President of Exploration at Galiano Gold]

Drilling activities also continued I should say targeting activities also continued at the Ensoroma target area, which is located along strike to the Southwest of Enkran. Obviously results from drilling into Bore were the highlight of the quarter for us, which I'll discuss in some detail. The current program was primarily focused on infill drilling in and around the known South High grade zone in order to increase our confidence in the mineral resource model as we advanced mining at the South Pit, as well as testing for continuity of mineralization below the reserve pit in certain prioritized areas. Results were excellent with all of the holes returning intercepts that were either in line with or exceeding expectations of the mineral resource model. And with these infill holes, we have now expanded the strike length of the South High Grade Zone from approximately 90 meters to 180 meters.

[Chris Pettman, Vice President of Exploration at Galiano Gold]

As you will have seen from our press release last week, we reported numerous thick high grade intervals throughout this zone, including Hole 315, which was 34 meters at 12 grams a ton gold from 192 meters and 11 meters at 7.2 grams a ton from two thirty nine meters as well as Hole 325, which was 38 meters at 6.7 grams a ton from 195 meters. These holes are representative of the quality of mineralization we see throughout this zone. A particular note this quarter is the discovery of a new high grade zone below the reserve pit and outside of the mineral resource at the south end of the Abore Main pit. Hole 346 intercepted 50 meters at 3.1 grams a tonne from 100 meters, which places the top of this zone immediately below the reserve pit. This is obviously an exciting result for us as it further highlights the fact the Abori system may indeed be much larger than we currently understand.

[Chris Pettman, Vice President of Exploration at Galiano Gold]

Based on these results, we have identified several high priority structural drill targets at depth as mineralization remains open across the entire 1,800 meter deposit strike length. The next few slides I'll show some of the highlights of the Borea results. Slide please. So this image shows the location of the 2025 drilling in plan view, along with the position of some of the best intercepts. As you can see, we focused on the South pit, but did put several holes into the Northern pit area, which also returned excellent intercepts, including 23 meters at 3.1 grams a ton in Hole 329.

[Chris Pettman, Vice President of Exploration at Galiano Gold]

Slide. These two cross sections I think are helpful to demonstrate the growth potential at Obori. The image on the right shows the position of the new high grade discovery at Obori Main immediately below the reserve and outside of the resource. This zone is open down dip and a long strike and is a priority target for follow-up. The image on the left shows the new northern extent of the south high grade zone.

[Chris Pettman, Vice President of Exploration at Galiano Gold]

These two wide high grade intercepts both lie below the reserve pit at grades that were better than expected in the mineral resource model and contributed to extending the strike length of the zone, which we now know to be approximately 180 meters.

[Chris Pettman, Vice President of Exploration at Galiano Gold]

Next slide.

[Chris Pettman, Vice President of Exploration at Galiano Gold]

This is a long section through the Abori deposit from north to south and shows the location of the newly discovered zone as well as the south high grade zone discovered in 2023. '20 '20 '5 drilling is shown here in teal with previous drilling shown in purple. In addition to increasing confidence in the mineral resource model, the latest round of drilling has confirmed that mineralization continues at depth and has provided valuable new structural insights to the team. There are several structural corridors that may be controlling these high grade ore shoots as highlighted here in this image, along with several high priority targets that remain untested. The next phase of drilling will test these multiple corridors for further extensions of this high value ore, And we believe there is significant upside for further resource growth in Abore either for future surface mining expansions or an eventual transition to underground operations given the high grades and significant width we're seeing as we continue to test the deposit.

[Chris Pettman, Vice President of Exploration at Galiano Gold]

The exploration team is busy planning for our next round of drilling, and we're certainly excited to see what else the pori has in store for us. And with that, I'll give it back to you, Matt. Thank you, Chris.

[Matt Badylak, President & CEO at Galiano Gold]

Moving on to slide 15. With our asset highly leveraged to gold and metal prices well above $3,000 an ounce, Galliano is uniquely positioned to deliver exceptional value for our shareholders. We project a 75% increase in gold production by 2026. Our investment in developing Cut 3 at Encran is off to a solid start, and a strategic focus of our technical team is to develop a maiden underground resource at the AGM by year end. We continue to operate from a position of financial strength with over $100,000,000 in cash and zero debt.

[Matt Badylak, President & CEO at Galiano Gold]

Galeano's compelling value proposition based on strong organic growth over the next two years and potential expansion of mineral resources through effective exploration, as we have seen at Haboray, make us an attractive investment opportunity in today's market. With that, I'd like to turn it back to the operator and open up for any questions. Thank you.

[Operator]

Thank you. Ladies and gentlemen, we will now begin the question and answer session. And should you wish to cancel your request, please press star followed by the two. If you're using a speakerphone, please leave the handset before pressing any keys. One moment, for your first question.

[Operator]

Your first question comes from the line of Heiko Ihle from H. C. Wainwright. Please go ahead.

[Heiko Ihle, MD & Equity Research at H.C. Wainwright & Co.]

Hey there. Thanks, Matt and team. Thanks for taking my questions. Can you hear

[Heiko Ihle, MD & Equity Research at H.C. Wainwright & Co.]

me okay?

[Matt Badylak, President & CEO at Galiano Gold]

Thanks Heiko, appreciate it. Good morning.

[Heiko Ihle, MD & Equity Research at H.C. Wainwright & Co.]

Perfect, sorry. I just heard silence there for a second. Going through a presentation here that you were giving during this call, page 12. Obviously almost all the drilling was in the South Pit. Just walk me through your intermediate and longer term expectations.

[Heiko Ihle, MD & Equity Research at H.C. Wainwright & Co.]

I mean, 25, I assume where there'll be at least a little bit of drilling elsewhere, But walk us through your longer term expectations and then also walk us through with maybe what you saw on drilling versus what you expected to see.

[Chris Pettman, Vice President of Exploration at Galiano Gold]

Sure, maybe I'll take that one. Heiko, good morning. I guess I'll start with first what we expected to see versus what we did see. And you're right in that we focused in the South Pit primarily because Heiko initially we wanted to understand and make certain that high grade zone was as robust as the model was predicting it was. And in all of the holes we drilled, we saw as I mentioned in the call here, as good grades and intercepts as we thought we were going to or better.

[Chris Pettman, Vice President of Exploration at Galiano Gold]

So typically speaking, they were wider and higher grade than we thought they were going to be in our current resource model, which is obviously one of the things that was exciting for us, particularly with the expansion of the zone, right? Before we started that drilling, it was 90 meters in strike length. And now with the infill, we've expanded that we know it's 180 meters of significantly high grade material. You know, so I think hopefully that answers that question about what we what we saw versus expectations. Obviously, that the new discovery that was out of the blue in terms of the resource model.

[Chris Pettman, Vice President of Exploration at Galiano Gold]

The model there had little to no mineralization. We suspected there might have been a structure there that we were going to chase and obviously we were happy with those results with you know a very chunky you know bit of high grade mineralization at 50 meters. And importantly it looks very similar to the high grade zone in South Pit in terms of its morphology. In terms of the next phases here we are currently drilling some deeper targets all along the strike length of the ore body. I mean, we're still at shallow depths here, right?

[Chris Pettman, Vice President of Exploration at Galiano Gold]

I mean, we've only drilled to about 150 meters below the surface. And so we have a pretty comprehensive plan to test these targets further. We're currently designing the plans now for follow-up. We'll be testing the down dip extensions of these zones, both the south pit and in the new high grade discovery, as well as some of these structural targets that we've identified now that are pretty exciting for us. Whether that means that we're at depths that could be amenable to underground mining or whether that could be future expansions of the open pit.

[Chris Pettman, Vice President of Exploration at Galiano Gold]

We're looking at both scenarios. Does that answer your question Heiko?

[Heiko Ihle, MD & Equity Research at H.C. Wainwright & Co.]

I think that's a very good answer to the question. I think that's helpful for us to analyze the longer term here as well. You're maintaining your production guidance here today, but I got to ask, I mean, with the secondary crusher commissioning in Q3, you state that the majority of equipment has been received or is awaiting customs clearance, which at least means it's on land. What happened with, you know, the cost of all the equipment when it was all said and done versus your expectations? How much has actually been paid thus far?

[Heiko Ihle, MD & Equity Research at H.C. Wainwright & Co.]

And is there any balance still owned, And then also just changing course a bit, what sort of downtime should we expect for the install? Thank you.

[Matt Freeman, EVP & CFO at Galiano Gold]

Morning, hi, Kirk, it's Matt Freeman here. I'll take the cost piece of that. So the secondary crusher project remains on budget. As expect, said we're expected to finish that in Q3. So we've only spent a portion of the amount.

[Matt Freeman, EVP & CFO at Galiano Gold]

A lot of the capital equipment we paid installments and partial upfront payments. We spent a couple of million bucks this quarter and I think the overall budget was around 5. So we've still got some more to spend. But it's on budget, we're happy with where it's tracking. And importantly, as you say, the equipment's in country and is moving towards site if it's not there already.

[Matt Freeman, EVP & CFO at Galiano Gold]

With respect to downtime, I'll maybe flip that one back to Mick. He can give a bit more details on that.

[Michael Cardinaels, EVP & COO at Galiano Gold]

Yeah. Thanks, Matt. Morning, Heiko. In terms of downtime, we should only need a number of days to tie in in the circuit once everything is being commissioned. We're luckily able to do most of the the preworks while the plant is still running.

[Michael Cardinaels, EVP & COO at Galiano Gold]

And even then, once we go to tie in the secondary crusher and the new conveyor systems themselves, we can isolate feed conveyor from our primary crusher and still run the feeder that comes from our coarse ore stockpile to maintain some mill production while we're tying in the rest of the circuit. So we only expect it to be down for a couple of days. And we'll tie in some other maintenance work along with that crusher shut and tie in. So we'll do mill reline such to take advantage of that that crusher tie in shutdown, I guess.

[Heiko Ihle, MD & Equity Research at H.C. Wainwright & Co.]

So do you expect to even feel the impact? Because, I mean, I assume there's preventative maintenance going on just about every quarter. Should we should we even model any sort of impact from this?

[Michael Cardinaels, EVP & COO at Galiano Gold]

We we don't really expect a significant impact from the shut to actually tie the crusher in itself. And we have contingencies in place with our mobile crushers and and everything. There is some additional work for shortening some of the conveyors, which will no longer be necessary once the secondary crusher is installed, but we'll push those out to a shutdown later in the year to maintain that flexibility should we have any issues with the commissioning.

[Matt Badylak, President & CEO at Galiano Gold]

Expect And Heiko, maybe I just

[Matt Badylak, President & CEO at Galiano Gold]

yeah, so maybe I'll just add something to that as well. I mean, the production forecast that we're estimating for this year do include all of that downtime as well, right? So that's been captured in the production numbers and our projections for the year. So nothing additional to what's already been captured there.

[Heiko Ihle, MD & Equity Research at H.C. Wainwright & Co.]

That's helpful. Perfect. I'll get back in queue and stop hogging up the question line here. Thanks for the

[Heiko Ihle, MD & Equity Research at H.C. Wainwright & Co.]

answers.

[Chris Pettman, Vice President of Exploration at Galiano Gold]

Perfect. Thank you.

[Operator]

Thank you. Once again, that is star and one to ask a question. Thank you. That ends our question and answer session. And

Participants

Executives

• Matt Badylak, President & CEO
• Michael Cardinaels, EVP & COO
• Matt Freeman, EVP & CFO
• Chris Pettman, Vice President of Exploration

Analysts

• Heiko Ihle, MD & Equity Research at H.C. Wainwright & Co.