Galiano Gold

Primary ticker: TSX:GAU; NYSE:GAU
Stage of development: Production
Commodity: Gold
Project to promote: Asanko Gold Mine
Project location: Ghana

Live financials

Cash: USD$50.6M
Debt: NIL

Major shareholders:
Sun Valley Gold – 10.9%
Donald Smith & Co – 10%
Gold Fields – 9.9%
Ruffer – 9.2%
Gold Mountains, Jin Huang Mining, Zijin – 7.9%
Management Ownership – 0.3%

Galiano is focused on building a sustainable business capable of long-term value creation for its stakeholders through organic production growth, exploration and disciplined deployment of its financial resources. The company currently operates and manages the Asanko Gold Mine, located in Ghana, West Africa which is jointly owned with Gold Fields Ltd. The Company is strongly committed to the highest standards for environmental management, social responsibility, and health and safety for its employees and neighbouring communities.

Management Profile

Greg McCunn, CEO

Greg has over 25 years’ experience in the mining industry. Prior to joining Galiano on April 1, 2019 he was CEO of Alio Gold. Prior to joining Alio Gold, Greg was CFO at Galiano from 2011 to 2017, during which time the Company financed the construction of the Asanko Gold Mine, executed the first phase of construction, completed commissioning and achieved commercial production. Greg was also CFO for Farallon Mining until it was sold to Nyrstar in early 2011. Mr. McCunn’s background includes technical, operational and corporate development roles with Teck Resources, Placer Dome and junior mining companies in Canada and Australia. He is a Professional Engineer and holds a Bachelor of Applied Science degree in Metallurgical Engineering and a Master’s degree in Business Administration.

What is your rationale for attending 121 Mining Investment?

Looking to meet new investors to add to our share registry

What recent news would you like to highlight to investors attending?

Completed an updated Life of Mine plan for the Asanko Gold Mine that targets an 8-10 year mine life at a production rate of 225,000 to 245,000 gold ounces per year. Both 2020 and 2021 are expected to be good years with projected strong free cash flow.

Launched a major cost reduction initiative with the goal of driving down all-in sustaining costs by approximately $100/oz.

Re-invigorated the exploration program with the aim to unlock potential within the 21,000 hectare land package. For 2020 the exploration spend is $10 million.

What are your key goals for the next 3, 6 and 12 months?

3 Months:

Re-invigorate exploration program

6 Months:

Continue to generate free cash flow

12 Months:

Achieve guidance for 2020: 225,000 – 245,000 ounces of gold at AISC of $1,000-$1,100/oz

In a sentence, what do you think makes your company such a compelling investment?

Well positioned both financially and operationally with a strong balance sheet, generating free cash flow and significant exploration potential from our under-explored land package of 21,000 hectares.

Analyst Insight – provided by Independent Investment Research

Galiano Gold (formerly Asanko Gold) is a TSX and NYSE-listed mid-tier gold mining company that’s focused on its flagship project in Ghana, West Africa. Asanko is focused on building a low-cost, mid-tier gold mining company through organic production growth, exploration and disciplined deployment of its financial resources.

The company currently operates and manages the Asanko Gold Mine, located in Ghana. Asanko and Gold Fields both have a 45% economic interest in the mine, with the Government of Ghana holding the remaining 10%. The Asanko Gold Mine is a large-scale, multi-pit asset that was built in 2015 ahead of schedule and within budget, first gold was poured in January 2016 and commercial production commenced in April 2016.

For FY 2019, on a 100% basis the Asanko Gold Mine generated record proceeds of $342.4 million from gold sales of 248,862 ounces at an average realized price of $1,376 per ounce. It generated record gold production of 251,044 ounces, exceeding upper-end of guidance of 225,000 – 245,000 ounces, at an AISC of $1,112/oz, 5% higher than guidance of $1,040 – $1,060/oz. The mine generated operating cash flow of $120.4 million and free cash flow of $44.0 million.

In all, 2019 was a transitional year for the Asanko Gold Mine, as the company shifted focus from investing in significant capital projects to generating positive free cash flow and began distributing capital to the JV partner The mine achieved record production of 251,044 ounces, exceeding our guidance expectations for the year, while costs were slightly higher than expected as a result of a higher-than-expected reliance on lower grade stockpile feed during Q4. Importantly, the development plan for the life of mine was agreed by the JV partners in August 2019.

Looking to the year ahead, production at the Asanko Gold Mine is expected to be very similar to 2019, targeting 225,000 to 245,000 ounces of gold production at AISC of $1,000 to $1,100/oz. The company also expects to continue to focus on exploration with a $10 million exploration program for the year, with its priority targets located close to existing infrastructure.