VANCOUVER, BC, Feb. 16, 2021 /CNW/ - Galiano Gold Inc. ("Galiano" or the "Company") (TSX: GAU) (NYSE American: GAU) reports preliminary fourth quarter ("Q4") 2020 operating results for 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. All financial information contained in this news release are unaudited and reported in US$.
Q4 and full year 2020 Asanko Gold Mine Highlights (100% basis)
- Exceeded annual production guidance: Annual gold production of 249,904 ounces, exceeding the upper end of 2020 production guidance of 225,000 - 245,000 ounces, with 65,571 ounces produced in the fourth quarter.
- Revenue growth: Highest recorded annual revenue of $418.1 million generated from gold sales of 243,807 ounces at an average realized price of $1,711/oz in 2020. Revenue of $111.1 million generated from gold sales of 60,655 ounces at an average realized price of $1,828/oz in the fourth quarter.
- Record milling performance: The processing plant delivered a record annual milling performance with throughput of 5.9 million tonnes ("Mt"), at an average plant feed grade of 1.4 g/t. The processing facility continued to deliver metallurgical recovery above design, achieving 94% recovery. Processed 1.4Mt of ore with an average gold grade of 1.5 g/t in the fourth quarter.
- Consistent cost performance: Preliminary all-in sustaining costs ("AISC")1 of $1,115/oz for 2020, below revised guidance (as of Q3 2020) of $1,150/oz, and of $1,179/oz for the fourth quarter.
- Significant cash generation: Preliminary cash flow from operating activities of $152.3 million during 2020.
- Return of capital: The AGM distributed $75 million to the joint venture participants through cash distributions in 2020.
Preliminary 2021 Guidance for the Asanko Gold Mine (100% basis)
- Production is expected to remain stable at 225,000 to 245,000 ounces
- AISC are expected to be $1,100 to $1,300/oz, including non-cash costs attributed with processing stockpiled ore
"Production returned to more usual levels at the Asanko Gold Mine in Q4, as planned, resulting in a strong finish to 2020. For the second consecutive year, the AGM was able to exceed annual production guidance and maintain stable all-in-sustaining costs despite the impacts of COVID-19." said Greg McCunn, Chief Executive Officer. "It was also a very successful year for exploration at the AGM, with additional resources delineated at the Akwasiso pit allowing mining to continue through 2021 while infill drilling is being completed to support a maiden resource estimate at Miradani North."
Production and Safety
Safety remains a priority at the AGM. In 2020 there were two lost-time injuries ("LTI") and 10 total recordable injuries ("TRI") reported during the year. LTI frequency rate ("LTIFR") and TRI frequency rate ("TRIFR") per million employee hours worked were 0.20 and 1.01, respectively, for the year.
In Q4 2020, the AGM sourced ore from Akwasiso and Esaase as well as run of mine stockpiles. During the quarter, 2.0Mt of ore was mined at an average grade of 1.4 g/t and 1.4Mt of ore was processed at 1.5 g/t. The processing facility continued to perform well and recovery averaged 95% over the quarter.
| AGM Key Production Statistics
(100% basis) | Units | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 |
| Total Tonnes Mined | 000 t | 13,737 | 12,279 | 9,489 | 8,962 | 6,361 |
| Waste Tonnes Mined | 000 t | 11,773 | 11,321 | 8,128 | 7,051 | 4,956 |
| Ore Tonnes Mined | 000 t | 1,964 | 958 | 1,361 | 1,911 | 1,405 |
| Strip Ratio | W:O | 6.0:1 | 11.8:1 | 6.0:1 | 3.7:1 | 3.5:1 |
| Average Gold Grade Mined | g/t | 1.4 | 1.4 | 1.4 | 1.6 | 1.6 |
| Ore Processed | 000 t | 1,438 | 1,467 | 1,638 | 1,400 | 1,460 |
| Gold Feed Grade | g/t | 1.5 | 1.1 | 1.4 | 1.6 | 1.5 |
| Gold Recovery | % | 95 | 93 | 94 | 94 | 94 |
| Gold Produced | oz | 65,571 | 48,974 | 69,026 | 66,333 | 66,112 |
Sales and Liquidity
The AGM sold 60,655 ounces of gold in Q4 2020 and had a closing unaudited cash balance of $64.3 million (including $30.0 million fully drawn revolving credit facility), $10.9 million in receivables from gold sales and $8.2 million in gold on hand. As at December 31, 2020, Galiano held unaudited cash and cash equivalents of $62.2 million and $2.9 million in receivables.
| Asanko Gold Mine Guidance
History (100% basis) | Production
Guidance (oz gold) | Production
Actual (oz gold) | Cost Guidance (AISC $/oz) | Cost Actual (AISC $/oz) |
| 2019 | 225,000 – 245,000 | 251,044 | $1,000 - $1,100 | $1,112 |
| 2020 | 225,000 – 245,000 | 249,904 | $1,000 - $1,100 | $1,115 |
| 2021 Preliminary | 225,000 – 245,000 | - | $1,100 - $1,300 | - |
The Company is currently finalizing the detailed 2021 business plan and expects to have Board and Joint Venture approval of the plan in March 2021 in conjunction with filing of its audited 2020 annual financial statements on or about March 11, 2021.
Annual mill throughput is expected to range between 5.5Mt and 5.8Mt consisting of contributions from Esaase, Akwasiso and ore stockpiles. Positive results from 2020 infill drilling at Akwasiso, targeting conversion of inferred resource, suggest an expansion at Akwasiso via a phase 3 pushback is economically viable. Pending requisite Joint Venture approvals, stripping at Akwasiso is expected to commence in late Q1 2021.
AISC are expected to range between $1,100 and $1,300/oz in 2021, including non-cash contributions of $30 to $60/oz as stockpiles are depleted during the year. Additionally, the AISC guidance includes royalties payable to the government of Ghana totalling approximately $80/oz based on a $1,600/oz gold selling price. Sustaining capital for the full year is expected to be $15 to $20 million including approximately $13 million for a phase VI expansion of the Tailings Storage Facility.