Galiano Gold Targets Production Growth as Nkran Grades, Hedge Roll-Off Boost Cash Flow

Key Points

• Production is expected to grow: Galiano targets 140,000–160,000 ounces of gold in 2026 at all-in sustaining costs of $2,300–$2,600 per ounce, with higher-grade Nkran ore expected to support a significantly larger production profile from late 2028.
• Cash flow could improve materially: The company’s gold-price hedge expires in December, allowing full exposure to gold prices as production rises. Galiano ended the second quarter with $105 million in cash, no debt and $180 million in total liquidity.
• Growth investments and catalysts are ahead: Galiano plans to spend $200 million on the Nkran pushback in 2027–2028, pursue a potential Esaase reserve increase in early 2027 and evaluate underground potential at Abore, while also considering a share buyback and future acquisitions.

Galiano Gold NYSEAMERICAN: GAU outlined plans to lift gold production, expand reserves and increase cash flow as higher-grade ore reaches its processing plant and an existing gold-price hedge expires.

During a company presentation, Matt, speaking for Galiano, said the company is targeting 2026 production of 140,000 to 160,000 ounces of gold at all-in sustaining costs of $2,300 to $2,600 per ounce. The company produced 121,000 ounces in 2025 and expects production to increase by roughly 20% from 2026 to 2027.

The company operates a hub-and-spoke mining complex with a central processing facility near the Nkran deposit and multiple deposits feeding the mill, including Esaase and Abore. Galiano said it currently has seven deposits comprising a reserve base of approximately 2 million ounces.

Higher-Grade Nkran Material Expected to Lift Output

Galiano is investing in the Nkran deposit, which is currently in a stripping phase. Matt said Nkran is expected to deliver the highest-grade material in the company’s reserve base to the mill beginning in late 2028, supporting a significantly higher production profile.

For the current year, Galiano said first-half production totaled just under 70,000 ounces. Grades are expected to rise in the second half, which the company expects will support greater production later in the year. Matt said the company remains on track to meet both its annual production guidance and all-in sustaining cost guidance.

The company reported $132 million in operating cash flow in the second quarter. It ended the quarter with $105 million in cash and no debt, along with a $75 million undrawn credit facility, for total liquidity of $180 million. Matt said 76% of Galiano’s shares are held by institutional investors and that the company had a market capitalization of just over $550 million.

Hedge Roll-Off Seen Supporting Cash Flow

Galiano said its existing gold-price hedge is scheduled to expire in December. Once the hedge rolls off, the company expects higher production in 2027 to have full exposure to the gold price.

“We do see material increases in cash flow in 2027, 2028 as well,” Matt said.

The company also highlighted its planned reserve update at the Esaase deposit as a potential catalyst in the first quarter of 2027. Esaase currently contains about 560,000 ounces of reserves, according to the presentation. Galiano is conducting approximately 34,000 meters of drilling this year to convert inferred material into indicated resources and potentially add it to reserves.

Matt said the company has identified about 1 million ounces of indicated and inferred material within the targeted zone at Esaase that it aims to convert into reserves. The company expects a reserve update in early 2027.

Abore Underground Potential and Relocation Plans

Galiano also pointed to potential underground development at the Abore deposit. The company has identified a high-grade zone below the current open-pit reserve shell and said Abore could transition to an underground mine after the open-pit portion is depleted.

The company is pursuing permits for an underground exploration adit at Abore and expects to break ground in early 2027. The adit would provide underground drilling platforms to evaluate the mineralization, which Galiano said extends across a 1.8-kilometer strike length and remains open at depth.

In response to an analyst question, Matt said Galiano is actively relocating three villages associated with operations at Nkran, Abore and Esaase. He said the relocations are smaller than projects undertaken by some regional peers and that the company has previously completed relocations at Nkran and Esaase.

Galiano expects the three relocations to cost about $50 million in total, with spending beginning in 2027 and extending into 2028.

Capital Spending, Buyback Discussions and M&A

The company expects the Nkran pushback to require about $120 million of capital in 2027, followed by another $80 million flowing into 2028. Matt said those requirements are expected to be funded through cash on the balance sheet and cash from operations.

He added that Galiano is in active discussions with its board about a potential share repurchase program. The company also sees potential for future acquisitions after it executes its mine plan, generates cash and improves its valuation.

Matt said Galiano remains favorable toward Ghana despite a royalty adjustment earlier in the year that has increased its cost base. For potential acquisitions, he said the company would seek to maintain or improve its jurisdictional profile. Galiano may consider opportunities in West Africa, including Côte d’Ivoire, as well as Namibia, while indicating it would not look to move into Mali or Burkina Faso.

Galiano compared its valuation with other Africa-focused producers, stating that it trades at about $333 per reserve ounce based on its current 2-million-ounce reserve base. The company said a larger reserve base following its planned update could create an opportunity for a market re-rating if it executes on its operating plans.

About Galiano Gold (NYSEAMERICAN:GAU)

Galiano Gold Inc is a Canadian gold exploration, development and production company focused on West Africa. The company's primary asset is the Asanko Gold Mine, an open-pit mining operation located in Ghana's Ashanti Region.

Galiano serves as operator of the Asanko Gold Mine, which it jointly owns with Gold Fields Limited and the government of Ghana. The operation produces gold doré and includes a processing plant, open-pit mining areas and associated infrastructure. Galiano also conducts exploration and resource-development activities in the surrounding region.

The company was formerly known as Asanko Gold Inc and adopted the Galiano Gold name in 2020.

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