Galiano Gold Reports Preliminary Q2 2020 Results

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10/07/2020 17:21
(All dollar amounts are United States dollars unless otherwise stated)

VANCOUVER, BC, July 9, 2020 /PRNewswire/ - Galiano Gold Inc. ("Galiano" or the "Company") (TSX: GAU) (NYSE American: GAU) (formerly Asanko Gold Inc.) is pleased to announce results for the second quarter ("Q2")1 from the Asanko Gold Mine ("AGM"), located in Ghana, West Africa. The AGM is a 50:50 joint venture ("JV") with Gold Fields Ltd (JSE, NYSE: GFI) which is managed and operated by Galiano. The Company expects to release its full financial and operational results before the market opens on July 30, 2020.

AGM Q2 Highlights (100% basis):
•Proceeds of $101.3 million generated from gold sales of 61,385 ounces at an average realized price of $1,651 per ounce
•Record gold production of 69,772 ounces
•Mined 1.36 million tonnes ("Mt") of ore, including 0.62Mt of ore from Esaase
•Processed a record 1.64Mt of ore with an average gold grade of 1.4 grams per tonne ("g/t")

"The Asanko Gold Mine delivered another record quarter in milling and production," said Greg McCunn, Chief Executive Officer. "With a second quarter of execution we remain on track to deliver between 225,000 and 245,000 ounces of gold at all-in sustaining costs2 of between $1,000 and $1,100 per ounce for calendar 2020. The strong performance of the operations enabled a further $30m distribution from the joint venture during Q2.

"As a result of receiving $15m in distributions from the AGM, the Company's financial position continued to strengthen with our corporate cash and receivables balance increasing to approximately $68 million at quarter-end with no debt."

Health and Safety
During the quarter, there were no lost time injuries ("LTI") and one total recordable injury ("TRI") reported resulting in a LTI frequency rate of nil per million employee hours worked and a TRI frequency rate of 0.41 per million employee hours worked.

Production
In Q2, the AGM sourced ore from the Nkran, Akwasiso and Esaase pits as well as run of mine stockpiles. During the quarter, 0.34Mt of waste and 0.55Mt of ore at an average gold grade of 1.4 g/t were mined from the Nkran pit. The Esaase pits collectively delivered 0.62Mt of ore at an average gold grade of 1.4 g/t with 5.45Mt of waste mined. At the Akwasiso pit ore mined totaled 0.19Mt and 2.34Mt of waste mined with an average grade of 1.4 g/t.

The processing plant milled 1.64Mt at a gold grade of 1.4 g/t during the quarter with metallurgical recovery averaging 95%.

AGM Key Production
Statistics (100% basis)

Units
Q2 2020 Q1 2020 Q4 2019 Q3 2019 Q2 2019 Q1 2019
Total Tonnes Mined 000 t 9,488 8,962 6,361 7,477 8,864 8,089
Waste Tonnes Mined 000 t 8,128 7,051 4,956 6,372 7,808 6,584
Ore Tonnes Mined 000 t 1,361 1,911 1,405 1,105 1,056 1,505
Strip Ratio W:O 6.0:1 3.7:1 3.5:1 5.8:1 7.4:1 4.4:1
Average Gold Grade Mined g/t 1.4 1.6 1.6 1.5 1.6 1.4
Ore Treated 000 t 1,638 1,400 1,460 1,439 1,375 1,224
Gold Feed Grade g/t 1.4 1.6 1.5 1.4 1.5 1.6
Gold Recovery % 95 94 94 94 93 93
Gold Produced oz 69,772 66,333 66,112 62,440 62,067 60,425

Sales and Liquidity
Gold production for the quarter totalled 69,772 ounces with gold sales of 61,385 ounces at an average realized price of $1,651 per ounce, generating gold sales proceeds of $101.3 million for the quarter. JV distributions from the joint venture to the joint venture partners during the quarter totalled $30.0 million.

The Company held approximately $68 million in unaudited cash and receivables at the quarter-end following receipt of the $15.0 million distribution from the JV and the use of $0.3 million in buying back shares under its Normal Course Issuer Bid. The Company has no debt.

COVID-19 Update
The JV continues to undertake precautionary measures in response to the COVID-19 global pandemic to protect the health and safety of its employees, their families and the local communities. Currently, there are 10 active cases of COVID-19 amongst contractors and employees of the AGM and no active cases with Galiano Gold employees. All active cases at the AGM are asymptomatic cases that were identified through proactive tracking, tracing and testing. Strict hygiene, monitoring and social distancing protocols are in place in accordance with the Ghanaian Ministry of Health guidelines which allows the mine to continue to operate.

Notes:
1 Q2 2020 Results include an extra eight days of production due to a change in the AGM's production calendar in order to align with a recent change in Gold Fields' production calendar. The AGM's production calendar now coincides with the final day of the quarter-end month.

2 Non-GAAP Performance Measures
The Company has made reference to certain non-GAAP performance measures in this press release. These non-GAAP performance measures do not have any standardized meaning. Accordingly, these performance measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. For a description of the methodology used to calculate these non-GAAP performance measures, see the Non-GAAP Measures section of Galiano's previously filed Q1 2020 Management Discussion and Analysis.

• All-in Sustaining Costs Per Gold Ounce
The Company has adopted the reporting of AISC as per the World Gold Council's guidance. AISC include total cash costs, corporate overhead expenses, sustaining capital expenditure, capitalized stripping costs and reclamation cost accretion per ounce of gold sold.




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