Q2 2024 Galiano Gold Inc Earnings Call

Sylvie: Good morning, my name is Sylvie and I will be your conference operator today. At this time, I would like to welcome everyone to the Galiano Gold Inc. second quarter 2024 financial results conference call.

Operator: Welcome everyone to the Galiano Gold, Inc. second quarter 2024 financial results conference call. Note that all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask questions during this time, simply press star then number one on your telephone keypad. And if you would like to withdraw your question, please press star then number two. Thank you. Mr. Matt Badylak, President and CEO of Galiano Gold, you may begin your conference.

Speaker Change: Note that all lines have been placed on mute to prevent any background noise.

Speaker Change: After the speaker's remarks, there will be a question and answer session.

Speaker Change: If you would like to ask questions during this time, simply press star then number 1 on your telephone keypad.

Speaker Change: And if you would like to withdraw your question, please press star then number 2. Thank you.

Speaker Change: Mr. Matt Badylak, President and CEO of Galiano Gold, you may begin your conference.

Matt Badylak: Thank you, Operator, and good morning, everyone. We appreciate you taking time today to join us on this call to review our second quarter 2024 Galiano Gold results that we released last night. 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&A, as well as this slide in the webcast presentation. Our release yesterday details our second quarter 2024 financial and operating results. These should be read in conjunction with our second quarter financial statements and MDNA, available on our website and filed on Cedar and Edgar.

Matt Badylak: Thank you, operator, and good morning, everyone.

Speaker Change: We appreciate you taking time today to join us on this call to review our second quarter 2024 Galiano Gold results that we released last night.

Speaker Change: We will 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&A as well as this slide of the webcast presentation.

Speaker Change: Our release yesterday details our second quarter 2024 financial and operating results. These should be read in conjunction with our second quarter financial statements and MD&A available on our website and filed on CDAR and EDGAR.

Matt Badylak: Also, please bear in mind that all dollar amounts mentioned on the conference call today are US dollars unless otherwise noted. With me on the call today are Matt Freeman, our Chief Financial Officer, and Chris Pettman, our Vice President of Exploration. I'll initially go through the highlights and take you through the operation.

Speaker Change: Also please bear in mind that all dollar amounts mentioned on the conference call today are of US dollars unless otherwise noted.

Matt Badylak: Matt will then discuss finance, Chris will present the high-level exploration overview, and I'll wrap it up and open up for Q&A, on slide five, starting with safety. During the quarter, we had zero lost time injuries on site and no total recordable injuries.

Speaker Change: With me on the call today I have Matt Freeman, our Chief Financial Officer, and Chris Pettman, our Vice President of Exploration.

Speaker Change: I'll initially go through the highlights and take you through the operations.

Matt Badylak: This results in a 12-month rolling LTI and TRI frequency rate of 0.15 and 0.6 million man-hours worked respectively. Health and safety remains at the forefront throughout our organization, particularly as activity has ramped up off-site with the recommencement of mining activities. We consistently strive to reinforce our commitment to zero harm and the implementation of best safety practices at the Sand Coat Gold Mine. As we ramped back up into hard rock mining operations at the Bore Pit, our gold production during the quarter totaled just over 26,000 ounces of gold. This was partially impacted by the rainy season in Ghana, which resulted in wet ground conditions, slower mining rates, and ultimately lower mill throughput. I'll get into this in more detail shortly.

Speaker Change: On slide five, starting with safety.

Speaker Change: During the quarter we had zero lost time injuries on site and no total recordable injuries.

Speaker Change: This results in a 12-month rolling LTI and TRI frequency rate of 0.15 and 0.6 million man-hours worked respectively.

Speaker Change: Health and safety remains at the forefront throughout our organisation particularly as activity has ramped up on-site with the recommencement of mining activities.

Speaker Change: We consistently strive to reinforce our commitment to zero harm and the implementation of best safety practices at the Sand Coat Gold Mine.

Speaker Change: As we ramped back up into hard rock mining operations at the Bore Pit, our gold production during the quarter totaled just over 26,000 ounces of gold.

Speaker Change: were partially impacted by the rainy season in Ghana which resulted in wet ground conditions, slower mining rates and ultimately lower milk throughput. I'll get into this in more detail shortly.

Matt Badylak: On the flip side, through our 2023 and early 2024 infill drilling programs at Abore, we've increased our Abore reserve base by 45 percent or 151,000 ounces, which has led to a larger pit shell at Abore, also increasing near-term strip ratios as we've moved more waste material. As a result of the slower-than-expected ramp-up and more backfill waste material in an older portion of the Boray pit, we are reducing our full-year guidance to between 120 to 130 ounces of gold. On the cost threat, we have recorded all interstate and cash costs at $17.95 per ounce.

Speaker Change: On the flip side, through our 2023 and early 2024 infill drilling program at Aboray, we've increased our Aboray reserve base by 45%, or 151,000 ounces.

Speaker Change: which has led to a larger pit shell at Abore, also increasing near-term strip ratios as we've moved more waste material.

Speaker Change: As a result of the slower than expected ramp up and more backfill waste material in an older portion of the Borae Pit, we are reducing our full year guidance to between 120 to 130 ounces of gold.

Speaker Change: On the cost front, we have recorded all-in sustaining cash costs of $17.95 per ounce.

Matt Badylak: Our costs on an absolute basis are in line with expectations, but we are revising all in sustaining cash costs higher for the full year, to between $19.75 and $20.75 per ounce, as we expect lower production and investments in additional stripping at the borough pit. Galliano's liquidity remains at the top of its peer group with zero debt and 123 million dollars in cash. As we continue to generate positive cash flows from our operations and maintain a robust balance sheet, we remain uniquely positioned to execute on our strategy of becoming a leading mid-tier gold producer.

Speaker Change: Our costs, on an absolute basis, are in line with expectations.

Speaker Change: But we are revising all-in sustaining cash costs higher for the full year, to between $19.75 and $20.75 per ounce, as we expect lower production and investments in additional stripping at the Borae Pits.

Speaker Change: Galeano's liquidity remains at the top of our peer group, with zero debt and $123 million in cash.

Speaker Change: As we continue to generate positive cash flows from our operations and maintain a robust balance sheet, we remain uniquely positioned to execute on our strategy of becoming a leading mid-tier gold producer.

Matt Badylak: I won't steal Chris's son and leave it to him to discuss our exploration progress during the quarter. Taking a look at our corporate slide, we've had a very busy quarter. We have strengthened our Board of Directors with two new additions. I am pleased to welcome Navandile and Dr. Morris Smith and look forward to working with them in the future. I would also like to thank Dr. Michael Price for his 10 years of service as he stepped down from his seat at the last AGM in June. I am pleased to announce that we have hired Michael Cardinals as Executive Vice President and Chief Operating Officer. Michael will be joining us effective September 3rd.

Speaker Change: I won't steal Chris's Sunday and leave it to him to discuss our exploration progress during quarter.

Chris Peppain: taking a look at our corporate slide. We've had a very busy quarter.

Speaker Change: We have strengthened our Board of Directors with two new additions. I am pleased to welcome Navin Dial and Dr Moira Smith and look forward to working with them in the future.

Speaker Change: I would also like to thank Dr Michael Price for his 10 years of service as he stepped down from his seat at the last AGM in June .

Speaker Change: I'm pleased to announce that we have hired Michael Cardinals as Executive Vice President and Chief Operating Officer.

Matt Badylak: He brings over two decades of mining experience across various commodities, having held progressively senior operational roles throughout his career. Most recently, he was the general manager of Yaowaray Mine after a successful five years at Sisingui Mine, both with Perseus Mining Ltd. In early July, we released our 2023 Annual Sustainability Report, where we examined our 2023 performance against objectives and laid out our 2024 goals, which we continued to track towards achieving.

Speaker Change: Michael will be joining us effective September 3rd

Speaker Change: He brings over two decades of mining experience across various commodities, having held progressively senior operational roles throughout his career. Most recently, he was the General Manager of Yaowaray Mine after a successful five years at the Sisingui Mine, both with Perseus Mining Ltd.

Speaker Change: In early July we released our 2023 Annual Sustainability Report where we examined our 2023 performance against objectives and laid out our 2024 goals which we continued to track towards achieving.

Matt Badylak: On slide 7, I'd like to highlight the progress we have made ramping up mining operations at Ebore. Our mining contractor will complete final mobilization in August, which has occurred slightly slower than expected. That said, we have seen significant mining rates, increasing production by 50% quarter on quarter since Q4 2023. During the quarter, we experienced some challenges with the rainy season, in particular saturated ground conditions in the upper part of the waste material.

Speaker Change: On slide 7 I'd like to highlight the progress we've made ramping up mining operations at Ebore.

Speaker Change: Our mining contractor will complete final mobilization in August, which has occurred slightly slower than expected. That said, we have seen significant mining rates increasing production by 50% quarter-on-quarter since Q4 2023.

Speaker Change: During the quarter we have experienced some challenges with the rainy season, in particular saturated ground conditions in the upper part of the waste material.

Matt Badylak: I want to stress that these are normal core start-up issues, and we anticipate these are largely behind us. As mentioned previously, the significant increase in our borate mineral reserve is expected to give us more flexibility and enhance the optimized life of my plant. We anticipate this to be completed later this year in Q4. On slide 8, I cannot emphasize enough the impressive growth that we've seen at the Borough, which highlights the value that we are continuing to add to the AGM since the delivery of the 2023 technical report.

Speaker Change: I want to stress that these are normal course start-up issues and we anticipate these are largely behind us.

Speaker Change: As mentioned previously, the significant increase in our borate mineral reserve is expected to give us more flexibility and enhance the optimised life of my plant. We anticipate this to be completed later this year in Q4.

Speaker Change: On slide 8, I cannot emphasise enough the impressive growth that we've seen at Abore, which highlights the value that we are continuing to add to the AGM since the delivery of the 2023 Technical Report.

Matt Badylak: This ore body remains open at depth and potentially amenable to further expansion through additional drilling and potentially high gold prices. On the back of positive drill results and an increase in mineral resources in Q1 coupled with a rising gold price environment, we anticipated an expansion in mineral reserves would follow. At this time, we proactively stepped out and began mining a larger pit shell in Q2. This larger pit shell impacted strip ratios and deferred some ore production during the quarter, while looking at some of our key optimisation projects underway at the AGM. Our tailing storage facility, and evaporators have been commissioned in early Q2 and are now fully operational, and I am pleased with the results we are seeing thus far. The C.I.L.

Speaker Change: This ore body remains open at depth and potentially amenable to further expansion through additional drilling and potentially high gold prices.

Speaker Change: On the back of positive drill results and increase of mineral resources in Q1 coupled with a rising gold price environment, we anticipated an expansion in mineral reserves would follow. At this time we proactively stepped out and began mining a larger pit shell in Q2.

Speaker Change: This larger pit shell impacted strip ratios and deferred some ore production during quarter.

Speaker Change: Looking at some of our key optimisation projects underway at the AGM.

Speaker Change: Our tailing storage facility evaporators have been commissioned in early Q2 and are now fully operational, and I am pleased with the results we are seeing thus far.

Matt Badylak: The tags were unfortunately delayed due to a port incident in Turkey that hit one of our containers, and we had to wait for one new tank to be replaced. That said, we are back on track now and are eager to get them back up and running. This is expected to be completed in Q4 this year. Regarding the secondary crusher installation, this is an upgrade that will maintain the plant nameplate capacity at 5.8 million tonnes per annum when treating harder material.

Speaker Change: The CIL tanks were unfortunately delayed due to a port incident in Turkey that hit one of our containers and we had to wait for one new tank to be replaced.

Speaker Change: That said, we are back on track now and are eager to get them up and running in the circuit. This is expected to be completed in Q4 this year.

Speaker Change: Looking at the second iterative crusher installation, this is an upgrade that will maintain the plant nameplate capacity at 5.8 million tonnes per annum when treating harder material. The engineering and early earthworks are already underway and we expect commissioning in the first half of 2025.

Matt Badylak: The engineering and early earthworks are already underway, and we expect commissioning in the first half of 2025. With that, I'm now going to hand the time over to Matt Freeman, our CFO, to discuss Galiano's financial results.

Matt Freeman: With that, I'm now going to hand the time over to Matt Freeman, our CFO , to discuss Galiano's financial results.

Matt Freeman: Thanks Matt. Good morning everyone.

Matt Freeman: On slide ten, as you can see, Galiano generated revenues of 64 million in the second quarter, which culminated in net income of 8.8 million and adjusted EBITDA of 17.6 million. As Matt outlined, Q2 production was lower than we had anticipated. But from a financial perspective, operating costs in aggregate remain consistent or slightly below recent quarters. In particular, I'm pleased we're able to report mining costs per tonne below $3 per tonne mined, which is, in fact, lower than estimated in the technical report from early 2023. We've also remained disciplined with capital deployment, only spending where it is critical and with a clear line of sight to value creation.

Matt Freeman: Thanks Matt, good morning everyone.

Matt Freeman: On slide 10, as you can see, Galiano generated revenues of $64 million in the second quarter, which culminated in net income of $8.8 million and adjusted EBITDA of $17.6 million.

Speaker Change: As Matt outlined, Q2 production was lower than we had anticipated, but from a financial perspective operating costs in aggregate remain consistent, or slightly below recent quarters.

Speaker Change: In particular, I'm pleased that we're able to report mining costs per tonne below $3 per tonne mined, which is in fact lower than estimated in the technical report from early 2023.

Speaker Change: We have also remained disciplined with capital deployment, only spending where critical and with a clear line of sight to value creation. The largest ongoing projects, as Matt mentioned, include the construction of two CL tanks that will increase residency time and expected to have a positive increase in recovery rates across our deposits.

Matt Freeman: The largest ongoing projects, as Matt mentioned, include the construction of two CL tanks that will increase residency time, expected to have a positive increase in recovery rates across our deposits. And secondly, the installation of a secondary crushing circuit, which will assist in maintaining throughputs at or above nameplate levels, even when processing harder fresh ore from in-crown in a bore. On to slide seven, you can see that this close attention to cost, allied with the strong gold price environment, has meant that even while undertaking a significant stripping campaign to access a borate, our liquidity and balance sheet remain very strong.

Speaker Change: and secondly the installation of a secondary crushing circuit which will assist in maintaining throughputs at or above nameplate levels even when processing harder fresh ore from in-crown and in-bore.

Speaker Change: On to slide 7, you can see that this close attention to cost, allied with the strong gold price environment, has meant that even while undertaking a significant stripping campaign to access a boray, our liquidity and balance sheet remains very strong.

Matt Freeman: We ended the quarter with $123 million in cash and still have no debt. Here it really demonstrates how the cash balance has benefited from the transaction to consolidate the Ithanka gold mine and how it has remained strong since.

Speaker Change: We ended the quarter with 123 million cash and still have no debt. Here it really demonstrates how our cash balance has benefited from the transaction to consolidate the Ithanka gold mine and how it has remained strong since.

Chris Pettman: As previously mentioned, we were pleased to see an increase of 45% in the boron mineral reserve on the back of the successful infill drilling in 2023 and early 2024. This increase in reserve requires a substantially larger pit to deliver those out, and in the current price environment, provides significant additional value to the company. The implication of this large payover, as Matt mentioned, is that it will be required to strip more waste material over the balance of 2024 than we originally planned and therefore access less fresh ore in 2024.

Speaker Change: Moving on to slide 12.

Speaker Change: As previously mentioned, we were pleased to see the increase of 45% in the boron mineral reserve on the back of the successful infill drilling in 2023 and early 2024.

Speaker Change: This increase in reserve requires a substantially larger pit to deliver those ounces.

Speaker Change: and in the current price environment provide significant additional value to the company. The implication of this large pay-over as Matt mentioned is that it will be required to strip more waste material over the balance of 2024 than we originally planned and therefore access

Matt: less threshold in 2024.

Chris Pettman: So we're supplementing production with lower-grade stockpile material. Along with the lower Q2 production than planned, this means that we now expect to produce between 120,000 and 130,000 ounces this year, rather than 140,000 to 160,000 ounces that we'd previously guided to. Overall, though, we're pleased that deferring some ounces this year ultimately leads to more than 150,000 ounces added to the life of the mine plan. Additionally, given the lower expected production, our all-in sustaining cost per ounce is expected to increase.

Speaker Change: So we're supplementing production with lower grade stockpile material. Along with the lower Q2 production than planned, this means that we now expect to produce between 120,000 and 130,000 ounces this year, rather than the 140,000 to 160,000 ounces that we'd previously guided to.

Speaker Change: Overall though, we're pleased that deferring some ounces this year ultimately leads to more than 150,000 ounces added to the life of the mine plan.

Speaker Change: Additionally, given the lower expected production, our oil in sustaining cost per ounce is expected to increase.

Chris Pettman: Between 1975 and 2075 ounces per ounce sold, which does include all of the stripping activities that are BORI. But I'd like to reiterate that underlying operating costs are actually trending quite well. So we're confident that once production starts to increase on the back of high-grade material, we'll start to see those all-in sustaining cost numbers come back down in 2025 and beyond. So although Q2 was a lower production quarter, Galiano remains in good financial shape to execute on our corporate strategy and to continue to add value to the AGM. With that, I'll turn the call over to Chris.

Speaker Change: to between 1975 and 2075 ounces per ounce sold.

Speaker Change: which does include all of the stripping activities that are Bore.

Speaker Change: But I'd like to reiterate that underlying operating costs are actually trending quite well, so we're confident that once production starts to increase on the back of higher-grade material, we'll start to see those all-in sustaining cost numbers come back down in 2025 and beyond.

Speaker Change: So although Q2 was a lower production quarter, Galiano remains in good financial shape to execute on our corporate strategy and to continue to add value to the AGM. With that, I'll turn the call over to Chris.

Chris Pettman: Great, thanks, Matt. For the next few minutes, I'll be discussing our exploration activities and results from the first half of the year. And as always, our exploration efforts are focused on maximizing the value of our existing deposits through our near mine work, while also generating new organic greenfields opportunities through our regional generative efforts. And we've had another successful near mine campaign so far this year focused on three of our main deposits, those being Abore, Midras, and Dubiasa.

Chris Peppain: Great, thanks Matt. For the next few minutes I'll be discussing our exploration activities and results from the first half of the year.

Chris Peppain: As always, our exploration efforts are focused on maximizing the value of our existing deposits through our near-mine work, while also generating new organic greenfields opportunities through our regional generative efforts. And we've had another successful near-mine campaign so far this year that's been focused on three of our main deposits, those being Abore, Midres, and the Dubiaso.

Chris Pettman: So, as Matt discussed, the bore reserves were increased by 45% on the back of our 2023 and our Q1 2024 drilling. 2024 drilling has proved that mineralization is continuous and robust at least 30 meters below the current reserve pit and is open at depth, with intercepts including 22 meters at 3.8 grams a ton and 9 meters at 10.8 grams a ton below the south pit, amongst others. Phase two of the Midrash South conversion drilling program, which consisted of approximately 7,600 meters, was completed successfully in Q2, and results will now support a 2024 maiden reserve expected by the end of this year.

Chris Peppain: So as Matt discussed, the bore reserves were increased by 45% on the back of our 2023 and our Q1 2024 drilling.

Matt: 2024 drilling has proved that mineralization is continuous and robust, at least 30 meters below the current reserve pit, and is open at depth with intercepts including 22 meters at 3.8 grams a ton and 9 meters at 10.8 grams a ton below the south pit, amongst others.

Matt: Phase 2 of the Midrash South Conversion Drilling Program that consisted of approximately 7,600 meters was completed successfully in Q2 and results will now support a 2024 Maiden Reserve expected by the end of this year.

Chris Pettman: A small information program at Adobe Asso confirmed the robust nature of mineralization, and results will now be used to support planning for potential mining. Our focus on generating and testing new regional targets at the AGM continued throughout the quarter with the continuation of follow-up drill testing at Giacotresso and first pass drilling at Acoma, which is formerly known as Target 3, which I'll touch on in a bit more detail in the next slide.

Matt: A small infall program at Adubiaso confirmed the robust nature of mineralization and results will now be used to support planning for potential mining.

Matt: Our focus on generating and testing new regional targets at the AGM continued throughout the quarter with the continuation of follow-up drill testing at Jaja Treso and first pass drilling at Acoma, which is formerly known as Target 3, which I'll touch on in a bit more detail in the next slide.

Chris Pettman: Preparatory work and crop compensation activities at Skyworld B were undertaken throughout the quarter, with the first drill test on schedule to begin in the next two weeks, which we're very excited about. The Acoma target is located on the northern extension of the Miradadi Shear Zone and sits approximately five kilometers from the process facility at Engram, with it identified as a priority drill target following prospect activities in 2023, and our initial drill test of three primary targets in the area was completed in Q2, totaling just under 4,600 meters.

Matt: Preparatory work and crop compensation activities at SkyGold B were undertaken throughout the quarter with the first drill test on schedule to begin in the next two weeks, which we're very excited about.

Matt: The Acoma target is located on the northern extension of the Miradati shear zone and sits approximately 5 km from the process facility at NCRAM. It was identified as a priority drill target following prospecting activities in 2023, and our initial drill test of three primary targets in the area was completed in Q2, totaling just under 4,600 m.

Matt: We're very pleased with the initial results with gold mineralization intercepted in all three zones.

Matt: Mineralization is associated with quartz shear veins as is typical of the AGM deposits. Our best intercepts were seen in the northern zone and include hole 3 with 4 meters at 31.57 grams per ton, hole 8, 16 meters at 3.57 grams per ton, hole 6, 7 meters at 6.89 grams per ton, hole 15, 10 meters at 2.63 grams per ton, and hole 4 at 6 meters at 6.96 grams per ton coal.

Matt: Now of note is hole T3RC24003, which ended in 31.57 gram material. This is a hole we weren't able to complete due to ground conditions, so it remains open at depth and along strike.

Matt Badylak: Interpretation of these results is underway, which will support likely follow-up work in the near future. We're very happy with progress in the first half of 2024 as we are efficiently moving targets through our exploration pipeline. Aside from near-mind successes and new encouraging results on targets such as the coma, we are continuing to identify and prioritize additional targets through early stage ground activities across the AGM tenement package and are excited to continue drill testing in the second half. With that, I'll turn it back to Matt.

Matt: Interpretation of these results is underway which will support likely follow-up work in the near future.

Matt: We're very happy with progress in the first half of 2024 as we are efficiently moving targets through our exploration pipeline.

Matt: Aside from near-mind successes and new encouraging results at targets such as the coma, we are continuing to identify and prioritize additional targets through early-stage ground activities across the AGM tenement package and are excited to continue drill testing in the second half of the year.

Matt Badylak: Before I close out the official presentation here, I want to remind the listeners of how much the company has changed in the last 12 months. Notably, we've completed the transaction with Goldfields, which in turn puts us on the path to becoming a mid-tier gold producer. While we've had a challenging quarter with the RAPA, we remain confident and steadfast in our vision for long-term value creation and growth as a company. With that, I'd like to turn it back to the operator and open up for Q and A.

Matt: With that, I'll turn it back to Matt.

Matt: Thank you, Chris.

Matt: Before I close out the official presentation here, I want to remind the listeners of how much the company has changed in the last 12 months. Notably, we have completed the transaction with Goldfields, which in turn puts us on the path to becoming a mid-tier gold producer.

Matt: While we've had a challenging quarter with the ramp-up, we remain confident and steadfast in our vision for long-term value creation and growth as a company.

Matt: With that, I'd like to turn it back to the operator and open up for the Q&A session.

Operator: Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touchtone phone. And if you would like to withdraw from the question queue, you will need to press the star followed by two. And if you're using a speakerphone, please lift the handset first before pressing any keys. Please go ahead and press star 1 now if you have any questions, and your first question will be from Iko Ihle at H.C. Wainwright.

Speaker Change: Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touch-tone phone. And if you would like to withdraw from the question queue, you will need to press star followed by two.

Matt: And if you're using a speakerphone, please lift the handset first before pressing any keys. Please go ahead and press star 1 now if you have any questions.

Speaker Change: And your first question will be from Heiko Ihle at HC Wainwright. Please go ahead.

Heiko Ihle: Hi there, thanks for taking my questions and welcome to Michael. I'm assuming you're already listening in on this call.

Aiko Ele: Hi there, thanks for taking my questions and welcome to Michael assuming you're already listening in on this call.

Matt Badylak: Thanks, Heiko. It's good to have you this morning.

Heiko Ihle: Always. It actually gets me pretty giddy asking you that question in your mind, but with your 250 million shares outstanding, we're looking at Mark Kappa 330ish million today. You got a hundred and twenty-three million dollars in cash, that's forty-eight cents a share. At one point, is that just enough? I mean, at one point, do you think you should actually start paying out some incentives to your shareholders, be it through a dividend or a buyback? I'm not looking for definite answers here, but maybe you could just walk me through your thought process on that issue, please.

Michael: Thanks Heiko, good to have you this morning.

Speaker Change: always it actually gets me pretty giddy asking a junior minor that question but with your 250 million shares outstanding we're looking at a market cap of 330 ish million today you got a hundred and twenty three million of cash that's 48 cents a share

Speaker Change: At what point is that just enough? I mean, at what point do you think you actually start paying out some incentives to your shareholders, be it through a dividend, a buyback? I'm not looking for definite answers here, but maybe just walk me through your thought process on that issue, please.

Matt Badylak: Yeah, Heiko, thanks for your question. It is a good one. And it's one that we do get quite often. I mean, I think, ultimately, what we want to do here is build long-term value for our shareholders. And we see that, you know, that that requires a little bit of investment of the capital that we currently have on our books, both with regard to implementing our life of mine plan, which, you will note, does require a significant amount of capital to access high-quality ounces in the NCRAN pit. And I think we've discussed that in the past. So there's no portion of that cash that's certainly allocated for that project.

Speaker Change: Yeah Heiko, thanks for your question. It is a good one and it's one that we do get quite often.

Speaker Change: I think ultimately what we want to do here is build a long-term value for our shareholders and we see that that requires a little bit of investment of the capital that we currently have on our books, both with regards to implementing our life of mine plan, which you will note

Speaker Change: does require a significant amount of capital to access high quality ounces in the NCRAN pit. And I think we've discussed that in the past. So there's a portion of that

Matt Badylak: In addition to that, you know, I do feel that we're in a position to use our cash to advance value for our shareholders in the current stock price environment by looking at very specific and unique M&A opportunities where we can utilize our cash to potentially add value to our, you know, a larger portfolio through M&A activities. So I think at this point in time, that's what we're focused on.

Speaker Change: Thank you very much for watching this video.

Speaker Change: of looking at things that we can discuss.

Matt Badylak: And those kind of activities are going to yield, you know, longer-term shareholder value than and potentially the short-term value that could be created through shareholder buybacks. Although, you know, those kinds of things are never off the table, I might add that as well. I mean, these things are things that we discuss regularly at the board and also at the executive management level.

Speaker Change: regularly at the board and also at the at the executive management level.

Heiko Ihle: Fair enough. And then just a quick clarification. I'll get back to you.

Speaker Change: Fair enough. And then just quick clarification, I'll get back to you. Payments to mining service contracts were, you know, $146 an ounce higher year over year, but mostly flat versus Q1. What are we seeing in Q3 thus far? I mean, we're at this point, what, five or six weeks into the quarter?

Speaker Change: and how much correlation is there on gold prices say you know gold goes up a hundred bucks how much does flow through the to the contractors place

Matt Freeman: Payments to mining service contracts were, you know, $146 an ounce higher year over year, but mostly flat versus Q1. What are we seeing in Q3 thus far? I mean, we're at this point, what, five or six weeks into the quarter? And how much correlation is there on gold pricing? Say, you know, gold goes up 100 bucks. How much does that flow through to the contractors?

Matt Freeman: Hi HICO, it's Matt Freeman here. Just on the cost structure, the mining cost rates are kind of fixed rates through the contract, so it's obviously volume driven, so as you said we've been pretty fixed around the three dollars a tonne or slightly less.

Matt Freeman: Hi Heiko, it's Matt Freeman here. Just on the cost structure, the mining cost rates are fixed rates through the contract, so it's obviously volume driven. So, as you said, we've been pretty fixed around $3 a tonne or slightly less, and we expect that to carry on through this year. And indeed, as we mentioned, as we increase the volume of mining, as we've seen this good ramp up through this year, it should come down on an overall basis because a certain element of the cost is a fixed management fee.

Matt Freeman: and we expect that to carry on through this year.

Matt Freeman: And indeed, as we mentioned, as we increase the volume of mining, as we've seen this good ramp up through this year.

Matt Freeman: So as you start adding tonnes to that, it brings the unit rates down. So yes, we're very comfortable with the contract with the miner, with the mining contractor, and those costs are going to remain very consistent for the near term. So there will be no surprises there.

Matt Freeman: and it should come down on an overall basis because a certain element of the cost is a fixed management fee.

Matt Badylak: Matt Badylak

Alfredo: With respect to the second part of your comment, the mining contractor has no gold price participation or anything like that in their contract, if that's how I understand your question correctly. So, and I think, as I said, the nice thing is that our basic cost structure of processing G&A and everything is relatively fixed, period on period. So we're entirely grade-dependent. So as production goes up or if the gold price goes up, that goes straight to the bottom line. So it benefits us.

Matt Badylak: So no surprises to come there. With respect to the second part of your comment...

Speaker Change: The mining contractor has no gold price participation or anything like that in there.

Speaker Change: in their contract, if that's how I understand your question correctly.

Speaker Change: So, and I think, as I said, the nice thing is that our basic cost structure of processing G&A and everything is relatively fixed, period on period, so we're entirely grade dependent. So as production goes up, or if gold price goes up, that goes straight to the bottom line, so that benefits us 100%.

Matt Badylak: Thank you. The next question will be from Alfredo at Equinox Partner. Please go ahead.

Speaker Change: Thank you. Next question will be from Alfredo at Equinox Partner. Please go ahead.

Alfredo: Yeah. Hi Matt. Thank you for taking my question. I have two. So first, the Enkron mining contract. You mentioned that it is expected to be, Basically, close in the second half of this year. Just... Can you maybe comment on the prices of that contract? What are they, I guess?

Speaker Change: Yeah, hi Matt. Thank you for taking my question.

Alfredo: I have two. So first, the NCRAN mining contract, so you mentioned that it is expected to

Speaker Change: basically closing the second half of this year.

Speaker Change: Jeff

Speaker Change: Can you maybe comment on how the prices of that contract what are they I guess

unknown: and Chris Pettman, Matt Badylak, Matthew Freeman, Galiano Gold, and Matt Pettman.

Jeff: that you are seeing there and whether or not they are kind of in line with what you were forecasting.

Matt Badylak: Yeah, hi Alfredo. Good morning, and thanks for your question.

Jeff: Yeah, hi Alfredo.

Matt Badylak: Yeah, I mean, we're pretty advanced in the tender process for the NCRAN deposit. We're coming to the tail end of that process as we speak, and we're really encouraged by the responses from the contractors thus far. I think, you know, we're not seeing anything that's shocking or surprising or even a large deviation from what we anticipated those costs to be in our technical report. So, largely speaking, what we've received thus far is costs that are in line with that report, with the costs described in our technical report for the mining of the NCRAN deposit.

Speaker Change: Good morning and thanks for your question.

Speaker Change: Yeah, I mean, we're pretty much advanced in the tender process for the NCRAN deposit. We're coming to the tail end of that process as we speak. And we're really encouraged by the responses from the contractors thus far. I think, you know, we're not seeing anything that's shocking or surprising or even a large deviation.

Speaker Change: from what we anticipated those costs to be in our technical report. So, largely speaking, what we've received thus far is costs that are in line with that report, with the costs described in our technical report for the mining of the Nkran deposit.

Alfredo: Thanks. And then my second question is related to the capitalized waste streeting cost at Aboard. Apparently, that's not included as part of sustaining CAPEX. Is that included as part of development CAPEX, or... And if not, how much is that topic?

Speaker Change: Versailles.

Speaker Change: Thanks, and then my second question is related to the capitalized waste stripping costs at ABOR. Apparently, that's not included as part of sustaining CAPEX, is that included as part of development CAPEX?

Speaker Change: And if not, how much is that capex?

Matt Freeman: Hi Alfredo, it's Matt Freeman here. All of the Aborey stripping costs we have included in sustaining capital, so they are within all sustaining costs, which is a large driver as to why those costs are relatively high relative to the life of my asset.

Speaker Change: Hi Alfredo, it's Matt Freeman here. All of the aborage stripping costs we have included in sustaining capital, so they are within all in sustaining costs.

Speaker Change: which is a large driver as to why those costs are relatively high relative to the life of mine plants.

Alfredo: Oh, okay. Okay.

unknown: And maybe just the last one, very quickly on the lease payment. Is that something that is included as part of ASIC or as part of sustaining CAPEX, or is something that's not included? So that the lease payments are also part of it.

Speaker Change: Okay, okay. Thank you for.

Alfredo: for confirming that. And maybe just the last one very quickly on the lease payments.

Speaker Change: Is that something that is included as part of ASIC or as part of sustaining CAPEX or is something?

Speaker Change: That's not included.

unknown: Unknown Executive, Chris Pettman, Matt Badylak, Matthew Freeman, Galiano Gold, Matt Badylak, Okay, perfect. Okay, that's all. Thank you very much.

Speaker Change: so that the lease payments are also part of

Speaker Change: I'm sure you're aware that the accounting standards require us to classify the mining contract as a lease.

Speaker Change: which I think confuses things unfortunately, but we're required to do that under IFRS. So because the mining contractor is predominantly focused on Obore, all of those costs flow through it, all the sustaining costs.

Operator: Thank you. The next question will be from Raj Ray at BMO Capital Markets. Please go ahead.

Speaker Change: Okay, perfect. Okay, that's all. Thank you very much.

Speaker Change: Thank you. Next question.

Raj Ray: Thank you, operator. Good morning, Matt and team.

Speaker Change: We'll be from Raj Ray at BMO Capital Markets. Please go ahead.

Raj Ray: Thank you, operator. Good morning, Matt and team. I have a few questions. The first one, Matt, is that you did speak about the mind rate improving.

Raj Ray: I have a few questions. The first one, Matt, is that you spoke about the mind rate improving. Can you talk about whether you are at steady state right now or are you looking for improvement there? And when did you achieve steady state?

Speaker Change: Can you talk to whether you are at steady state with your money right now or there's still some improvement there? And when did you achieve steady state? And secondly, on the Boris Strip, you did highlight looking at a bigger pit with a higher gold prize.

Raj Ray: And secondly, on the Boris Strip, you highlighted looking at a bigger pet with a higher gold price. Did the instability that you saw have anything to do with the increase in the strip as well, or was that just in the upper levels? Because I do see that the Boris Strip has gone from like 4.8 to 7.2. You didn't answer that one, Matt.

Speaker Change: Did the instability that you saw have anything to do with the increase in the strip as well, or was that just in the above levels? Because I do see that the borage strip has gone from like 4.8 to 7.2.

Speaker Change: You didn't answer that one. I have a couple more questions after that.

Matt Badylak: Yeah, okay, Raj. Listen, I've got the first part of your question regarding mining rates. The second part was a little bit muted, so I didn't really understand that one. But I'll start with the first part. With regard to the mining rates, they are ramping up, as I mentioned, and we're quite comfortable or happy with the way that we're seeing those rates increase quarter on quarter. There is some additional equipment to come in quarter three. It's basically towards the end of this month.

Speaker Change: Yeah okay Raj, listen I've got the first part of your question regarding mining rates, the second part was a little bit muted so I didn't really get that one but I'll start with the first

Speaker Change: First part with regards to the mining rates They are ramping up as I mentioned and we're quite comfortable or happy with the way that we're we're seeing those rates Increase quarter on quarter. There is some additional Equipment to come in quarter three. It's basically towards the end of this month

Speaker Change: and on the back of that we expect the rates to continue to increase. What we are planning for us, just to give you a little bit of an indication is...

Matt Badylak: And on the back of that, we expect the rates to continue to increase. What we are planning for, Raj, just to give you a little bit of an indication, is that these mining rates on a monthly basis will continue to increase up and through until about November and December, when they hit steady state. And at that point, we're expecting about 4 million tonnes of movement, total movement per month. So that will probably be our steady state, and we're ramping up.

Speaker Change: that these mining rates on a monthly basis will continue to increase up and through until about November-December where they hit steady state and at that point we're expecting about 4 million tonnes movement, total movement.

Matt Badylak: And you saw roughly we're about 3 million tonnes thereabouts in recent months. And so we'll be slowly ramping up over the course of the latter part of this half to that 4 million tonne per month mark by November and December. And yeah, maybe you could just repeat that second part, yeah.

Speaker Change: Matt Badylak

Raj Ray: The second part was on the borage strip. You did mention that you increased the gold price and you're looking at a bigger pit, but have there been any changes to your pit design as a result of some of the stability issues you saw early on?

Speaker Change: and maybe you could just repeat that second part, yeah.

Speaker Change: The second part was on the borage strip. You did mention that you've increased the gold price and you're looking at a bigger pit, but has there been any changes to your pit design as a result of some of the stability issues you saw early on?

Matt Badylak: No, well, obviously, we've increased the gold price slightly to 1650, Raj, in terms of stability issues, and the pit designs have obviously changed in terms of it expanding across the deposit. We have done thorough geotechnical work to set the geotechnical parameters on a larger pit there, and we've held true to the consultant's views on what those slope parameters should be. So, there shouldn't be any concern on that front in terms of pit stability on the larger pit.

Speaker Change: Thank you for listening, bye.

Speaker Change: No, obviously we've increased the gold price slightly to $1,650, Raj, in terms of stability issues and the pit design has obviously changed in terms of it expanding across the deposit. We have done thorough geotechnical work to set the geotechnical parameters.

Speaker Change: on a larger pit there and we've held true to the consultants views on what those pit slope parameters should be. So there shouldn't be any concern on that front in terms of the pit stability on the larger pit.

Matt Badylak: And I will add just to this, maybe I'll just add one thing here that, you know, if you look at the grade in the new reserve here at Boray, the grade's slightly down compared to the previous reserve, but, you know, ultimately that's on the back of a slightly reduced cut-off grade with the high gold prices. But, you know, that kind of points to the fact that we're not chasing low-quality ounces here, right?

Speaker Change: And I will add, Raj, just to this, maybe I'll just add one thing here that, you know, if you look at the grade...

Speaker Change: in the new reserve here at Borei. I mean, the grade's slightly down compared to the previous reserve, but, you know, ultimately that's on the back of a slightly reduced cut-off grade with the high gold prices. But, you know, that kind of points to the fact that we're not chasing low-quality ounces here, right? The grade still remains relatively high. We're using a $1,650 gold price for this reserve. Gold prices at the moment are in the 23-plus.

Matt Badylak: The grade still remains relatively high. We're using a 1650 gold price for this reserve. Gold prices at the moment are in the 23-plus mark, so, you know, we're not going out there chasing low-quality ounces through this expansion.

Speaker Change: Mark. So, you know, we're not going out there chasing low quality ounces by this expansion, through this expansion.

Raj Ray: Okay, that's good. The other question I had was, look, I mean, you just started your mining, so you still don't have the flexibility. So I'm guessing that's going to improve over the next little while. But in your original mine plan, if I'm not wrong, you were supposed to start initial mining activities at Assasi and Miradani North in the first half as well. Has that already started?

Speaker Change: Okay, that's good. The other question I had was, I mean, look, Kevin, you just added your...

Speaker Change: mining, so you still don't have the flexibility. I'm guessing that's going to improve over the next little while.

Speaker Change: But, in your original mine plan, if I'm not wrong, you were supposed to start initial mining activities at Sassi and Miradani North in the first half as well. Has that already started?

Matt Badylak: It's a really good question, and I think we've mentioned in the call here that this expansion in Obore actually gives us more flexibility in our mine plan, and this is kind of one of the aspects of that. What we've found now is that the additional growth in Obore has allowed us to defer the commencements of the Asasi ore delivery and also the Muradani ore delivery.

Speaker Change: It's a really good question and I think we've mentioned in the call here that this expansion in a borate actually gives us more flexibility in our mine plan and this is kind of one of the aspects of that. What we've found now is that

Speaker Change: The additional growth in Oboro has allowed us

Speaker Change: to defer those commencement of the ASASI ore delivery and also the Muridani ore delivery. And the other benefit that it does also provide is, you know, we've got a new contractor on site with new equipment and new policies, procedures. You know, it does allow us now to have one contractor focused on one pit delivering, you know, all the ore tons that we need from one single pit rather than having that contractor spread out across ASASI, Muridani, etc. So, you know, we now believe that with this expansion, Borei is going to...

Matt Badylak: And the other benefit that it does also provide is that we've got a new contractor on site with new equipment and new policies and procedures. It does allow us now to have one contractor focused on one pit delivering all the tonnes that we need from one single pit rather than having that contractor spread out across Asasi, Muradani, etc. So we now believe that with this expansion, Obore is going to allow for longer and more sustained mill feed delivery from the single pit, which we're quite pleased with actually.

Speaker Change: going to allow for longer and more sustained milk feed delivery from the single pit, which we're quite pleased with actually.

Raj Ray: Okay, and then one last question on the installation of the new secondary crusher. Can you remind us, was this part of the original mine plan, or is this something that you've decided to put in based on the hardness of the ore, and if so, is the ore harder than expected for a borax?

Speaker Change: [inaudible]

Speaker Change: Okay, and then one last question on the installation of the new secondary crusher. Can you remind us, what's the part of the original mine plan, or is this something that you've decided to put in based on the hardness of the ore, and if so, is the ore harder than expected for a boray?

Matt Badylak: No, Raj, it wasn't captured in our technical report, but we knew that we were going to need to upgrade our system for multiple reasons. One is throughput-related, particularly when we're treating the NCRAM material as it's harder than, say, for example, an ASASI. But the other reason that we did it was from a cost perspective, because certainly we're using mobile crushers at the moment, which require a lot of handling and a lot of equipment to feed the final stockpile.

Speaker Change: No, Raj, it wasn't captured in our technical report, but we knew that we were going to need to upgrade our system for multiple reasons. One is throughput related, particularly when we're treating the NCRAM material as it's harder than, say, for example, an ASASI, but the other reason that we did it was from a cost perspective, because certainly we're using mobile crushers at the moment, which require a lot of re-handle and a lot of equipment to feed.

Matt Badylak: And then, you know, probably more importantly than all of those is from a safety perspective. We wanted to make sure that we managed safety on site better. And at the moment, there's a lot of equipment and human interactions in that mobile crushing circuit that we will remove through the addition of that secondary crusher. So it was something that we didn't capture in the technical report, but we knew we had to move on very quickly, and it's advanced quite, quite quickly today.

Speaker Change: feed the final stockpile. And then, you know, probably more importantly than all of those is from a safety perspective, you know, we wanted to make sure that we.

Speaker Change: We manage safety on site better and at the moment there's a lot of...

Speaker Change: equipment and human interactions in that mobile crushing circuit that we will remove through the addition of that secondary crusher. So it was something that we didn't capture in the technical report but we knew we had to move on very quickly and it's advanced quite

Speaker Change: quite quickly today.

Raj Ray: Thank you, Raj. Cheers.

Speaker Change: Okay, that's great, Matt. Thanks a lot.

Operator: Again, a reminder, ladies and gentlemen, to please press star followed by one on your touch-tone phone to get into the question queue. The next question is from Dan Ellsworth at World Micro. Please go ahead.

Raj Ray: Thank you, Raj. Cheers.

Speaker Change: Again, a reminder, ladies and gentlemen, to please press star followed by one on your touch-tone phone to get into the question queue. Next question is from Dan Ellsworth at World Micro. Please go ahead.

Dan Ellsworth: Yeah, quick question for you on...

Speaker Change: If you could just highlight any changes that have occurred with respect to the hedges

Speaker Change: because that seems to be something fairly new since we took over 100%. And then just overall on, you know, we've managed the, you know, the whole project for several, several years. And then now we're kind of on our own. And it seems as if we're

Speaker Change: adding additional, you know, management and some cost structure to it. I'm just wondering if you can...

Dan Ellsworth: I'm just wondering if you can Kind of just explain what's changed, what's different now, maybe then, you know, prior to us taking over because, as the manager, we've kind of got good visibility of what's occurred there along the way, but just talking about executive, you know, compensation in terms of share compensation.

Speaker Change: and Mattie. Thank you, Mattie. Thank you, Heiko. Thank you, Heiko. It's good to be back. Thank you. I wanted to kind of just explain what's changed, what's different now maybe than, you know, prior to us taking over because we, as the manager, we've kind of got good visibility of what's occurred there along the way. But just talking about like executive, you know, compensation, in terms of share compensation, I noticed some of those numbers seemed to be up a little bit. The hedges. The hedges.

Dan Ellsworth: I notice some of those numbers seem to be up a little bit on the hedges. Just understanding what the strategy with the hedges is, if you could tackle those two topics, and then also, on a go forward basis, do we look at Q3 and Q4 and say, Hey, we expect to have kind of a similar, you know, four or $5 million used in terms of total cash, based on where we are, or is that, you know, usage of cash, we still have 128 million, which is great?

Speaker Change: just understanding what's the strategy with the hedges.

Speaker Change: if you could tackle those two topics and then...

Speaker Change: Also, you know, on a go-forward basis, do we look at Q3 and Q4?

Speaker Change: and say, hey, we expect to have kind of similar, you know, four or five million dollars used in.

Speaker Change: in terms of total cash, based on where we are, or...

Dan Ellsworth: But do we expect to use 4 million in the next couple of quarters? Or do we expect that, you know, to kind of get back to more of a simple, normal, normalized, you know, adding to that cash stockpile?

Speaker Change: Is that, you know, usage of cash, we still have 128 million, which is great. But do we expect to use 4 million in the next couple of quarters? Or do we expect that, you know, to kind of get back to more of a simple normal normalized, you know, adding to that cash stockpile?

Matt Badylak: Hi Dan, good morning. Well, that's that's a lot to get through. Thanks for that.

Speaker Change: Hi Dad, good morning.

Speaker Change: Well, that's a lot to get through. Thanks for that. Let me try to start off quickly and I'll pass.

Speaker Change: The bulk of the answer to Matt's

Speaker Change: to your question here. Maybe I'll just start with a little bit of colour around the changes in the executive team. I mean, listen, we have made a few changes that were very necessary. I mean, the appointment of the COO is something that we've been looking to do for quite some time. It certainly wasn't driven by any movement in terms of the ownership of the company. That position has been vacant.

Matt Badylak: Let me try to start off quickly, and I'll pass the bulk of the answer to Matt on your question here. Maybe I'll just start with a little bit of color around the changes in the executive team. I mean, listen, we have made a few changes that were very necessary. I mean, the appointment of the COO is something that we've been looking to do for quite some time. It certainly wasn't driven by any movement in terms of the ownership of the company.

Matt Badylak: That position has been vacant, really, since I was appointed to the CEO role in early 2021, and we have gone through a very extensive search process to find the right candidate. So I'm really pleased to have Michael on board. And, you know, in parallel to that, we have made some other senior management changes as well that we've described in the MD&A as well that have reduced some overall headcount costs with regard to the corporate G&A here as well.

Speaker Change: really, since I was appointed to the CEO role in early 2021. And, you know, we have gone through a very extensive search process to find the right candidate. So I'm really pleased to have Michael on board. And, you know, in parallel to that, we have made some other senior management changes as well that we've described in the MD&A as well that have reduced some overall headcount costs with regards to the corporate G&A here as well. So, you know, none of these were specifically driven on the back of the change.

Matt Badylak: So, you know, none of these were specifically driven on the back of the change of ownership of the asset. So I'll just finish up there, and I'll pass it on to Matt Freeman to answer the bulk of your other questions.

Speaker Change: of ownership of the asset. So I'll just finish up there and I'll pass it on to Matt Freeman to answer the bulk of your other questions.

Matt Freeman: Yeah, hi Dan. So I'll try. If I miss anything, let me know. So on the hedges side of things, our strategy hasn't really changed with the change of ownership with Goldfields. Even during the period when we operated the joint venture, we did prudently put some hedges in place over periods where we knew capital was going to be higher. So again, very much, and we've tried to reiterate this to everybody that we're only doing it for risk mitigation standpoints during periods of known high stripping and high capital expenditure.

Matt Freeman: Yeah, hi Dan. So I'll try, if I miss anything, let me know. So on the hedges side of things,

Matt Freeman: Our strategy hasn't really changed with the change of ownership with Goldfields.

Matt Freeman: Even during the period when we operated the joint venture, we did prudently put some hedges in place over periods of

Matt Freeman: where we knew capital was gonna be higher.

Matt Freeman: So again, very much, and we've tried to reiterate this to everybody that we're only doing it for risk mitigation standpoints during periods of known high stripping, high capital expenditure. So as you know, from the Life of Mine plan, we know that's going to be for a few years when we are stripping a bore at the moment. And then as we move into stripping the Aincran deposit, we know our cash flows are skinny and we're highly leveraged at that price of gold. So if we can take advantage of the current price environment to protect ourselves, we thought that was a proven thing to do.

Matt Freeman: So as you know, from the life of mine plan, we know that's going to be for a few years when we are stripping a bore at the moment. And then as we move into stripping the Aincran deposit, we know our cash flows are skinny, and we're highly leveraged at that price of gold. So if we can take advantage of the current price environment to protect ourselves, we think that is a proven thing to do. So the specifics of the hedges that we've got in place at the moment, which run through the balance of 2025 only, are unchanged. We haven't actually entered into 20 new hedges during this quarter.

Matt Freeman: So, the specifics of the hedges that we've got in place at the moment, which run through the balance of 2025 only.

Matt Freeman: are unchanged. We haven't, didn't actually enter into any new hedges during this quarter. And as I think the key for me, as we've said, we're moving towards...

Matt Freeman: And as I think the key for me, as we've said, we're moving towards updating a life of mine plan with updated reserves by the end of this year, that will give us greater visibility into what those cash flows look like in the medium and short term, and then we'll consider where there are opportunistic times to potentially add some risk mitigation to that. So the underlying strategy hasn't changed, again, with the change of ownership, and we believe we're being prudent, given where the company is at at the moment. Then on the executive G&A, I think, as Matt outlined, I think from a basic cost perspective, we're pretty neutral through the changes that have happened this year. The books look a bit different.

Matt Badylak: Matt Badylak

Matt Badylak: Um...

Matt Badylak: Then on the executive G&A, I think as Matt outlined, I think from a basic cost, we're pretty neutral through the changes that have happened this year.

Matt Freeman: I think when we're consolidating the Asanko gold mine, I would say it's relatively modest, but in part, in our financial statements, we do add some sort of new G&A expenses that come from managing a corporate office in Accra that we didn't used to have on the books. So that does provide a modest increase in our base G&A cost that wasn't there pre-transaction on Galiano's books but has always been there under the joint venture rate.

Speaker Change: The books look a bit different. I think when we're consolidating the the Asanka gold mine

Speaker Change: and I would say it's relatively modest but hard about in our financial statements.

Speaker Change: We do add...

Speaker Change: some sort of new G&A expenses that come from managing a corporate office in Accra that we didn't used to have on the books. So that does provide a modest increase in our base G&A cost that wasn't there pre-transaction on Galliano's books but has always been there under the joint venture rate. So there's kind of really been no change in that cost structure just the way it's reported a little bit.

Matt Freeman: So there's kind of really been no change in that cost structure, just the way it's reported a little bit. And then, turning to stock-based compensation, particularly, I think it's very apparent to anybody reading the financials that that number has been growing significantly this year. And that's purely driven on the back of the increase in the gold price. Sorry, in our share price, that's obviously on the back of the strong performance through the last 12 months plus the gold price environment.

Speaker Change: And then turning to stock-based compensation particularly, I think it's very apparent to anybody reading the financials that that number has been growing significantly this year.

Speaker Change: and...

Speaker Change: and that's purely driven on the back of the increase in gold price.

Speaker Change: in our share price that's obviously on the back of the strong performance in through the

Matt Freeman: So what we've seen there is that under the accounting rules that where you have kind of units that are settled in cash, so we have performance share units and deferred share units with the directors receive, they get marked to market each period based on share price. So we've seen that big run up in share price over the last 12 months, which ultimately, I think I'd be happy with. But that does impact the short term cost structure there. Unknown Executive, Chris Pettman, Matt Badylak, Matt Badylak, Matt Badylak, Unknown Executive, Matt Badylak, Matthew Freeman, Galiano Gold Unknown Executive, Chris Pettman, Matt Badylak,

Speaker Change: the last 12 months, plus the gold price environment.

Speaker Change: So, what we've seen there is that...

Speaker Change: under the accounting rules that where you have

Matt Badylak: Matt Badylak

Matt Badylak: They get mark-to-market each period based on share price. So we've seen that big run-up in share price over the last 12 months, which obviously ultimately I think everybody's happy with, but that does impact the the short-term cost structure there.

Speaker Change: Well, see, most of that run-up happened through to the mid part of Q2, and then we sort of flattened off through the summer.

Speaker Change: I wouldn't expect unless there's another material increase in share price.

Matt Badylak: Matt Badylak

Speaker Change: and obviously full details are in the information circular you can see on that compensation strategy that was approved by a strong shareholder support at the AGM back in June.

Operator: Thank you. The next question will be from Mericat Uri at Beacon Securities. Please go ahead.

Speaker Change: Thank you. Next question will be from Maricat Uri at Beacon Securities. Please go ahead.

Mericat Uri: Hi Matt, a very basic question for me. What sort of proportions are you going to be going forward for Q3 and Q4, relying upon the stockpiles and relative contribution from Obori? And if you could just give me, you know, average percentages, that would be great.

Maricat Uri: Hi Matt, a very basic question for me. I was wondering what sort of proportions are you going to be going forward for Q3 and Q4, relying upon the stockpiles and relative contribution now from Obori and if you just could give me

Speaker Change: You know, average percentages, that would be great.

Matt Badylak: Yeah, no, good. Thanks for that, Buraket, and good morning. It's good to have you on the call. We're looking at, you know, probably about a third, three-quarters of the balance of the year will be coming out of the borough, and then roughly around a quarter of the mill feed will probably be coming off the lower grade stockpiles, certainly. Matt Badylak, Unknown Executive, Chris Pettman, Matt Badylak, Matt Badylak, Matt Badylak, Unknown Executive, Chris Pettman, Matt Badylak, Unknown Executive, Chris Pettman, Matt Badylak,

Matt: Thanks for that Buraket and good morning. It's good to have you on the call. We're looking at probably about a three...

Matt: Three-quarters of the balance of the year will be coming out of a borough and then roughly around a quarter of the mill feed will probably be coming off the lower grade stockpiles.

Matt: So that should give you enough to do your numbers on

Speaker Change: And maybe I will add something else to this and I think this is important for all listening in is you know as we as we're stripping more and and we won't be as deep in the deposit by the end of the year the grades out of the boray you know are probably lower in the upper portions and you know and they start to get get higher as we mine below the the old resolute pit so you know just to bear in mind that you know when we're saying three quarters out of the boray that will be slightly lower grade than the average grade of the deposit as well.

Matt Badylak: Perfect. That answers everything I need.

Speaker Change: Yeah.

Speaker Change #100: Perfect, that answers everything I need.

Operator: Next is a follow-up from Alfredo at Equinox Partner. Please go ahead. Yeah, Matt.

Speaker Change #101: Okay, thank you very much. Thank you. Next is a follow-up from Alfredo at Equinox Partner. Please go ahead.

Alfredo: Matt, sorry, I just wanted to reframe maybe my first question on the sustaining capital. So basically your guidance for sustaining capital excluding waste stripping is 10 million. So I guess my question is how much is only the waste stripping?

Matt Freeman: Hi Alfredo, it's Matt here, I think. Thank you. As Matt alluded to, you can assume a ramp up in mining costs, and Matt Badylak. So we're going to be looking at mining rates of approximately 4 million tonnes per month by the end of the year. And you can see from the numbers we put out sort of what we're averaging through Q3. So I think if you extrapolate that through, that should give you an indication that obviously the strip ratios are there, that they are high, and you can see that from the reserve. So you should be able to kind of work out a good proxy. We can circle back maybe offline if you need a bit more help on that one.

Alfredo: Okay, yeah, that makes sense. Okay, thank you.

Alfredo: Hi Alfredo, it's Matt here. I think...

Speaker Change #102: As Matt alluded to, you can you can assume a ramp up in mining costs to

Speaker Change #103: to respect to.

Alfredo: you can see that from the reserves. So, you should be able to kind of work out good proxy. We can circle back maybe offline, if you need a bit more help on that one. But I think from what we've said, you should be able to get.

Alfredo: reasonably good estimate of what our stripping cost is. And as we said, it is high through the balance of H2 because we're stripping this larger pit, so that is driving our oil and sustaining costs number up on a per ounce basis.

Alfredo: Okay, yeah, that makes sense. Okay, thank you.

Matt Badylak: At this time, I would like to turn the call back over to our speakers for any additional remarks.

Speaker Change #104: At this time, I would like to turn the call back over to our speakers for any additional remarks.

Matt Badylak: Thank you, operator. I think there's nothing more to add from our side, and I appreciate everyone joining the call this morning, and if there's any further follow-up, we'll be happy to take them online one by one, sorry, separately offline one by one. Thanks, thanks operator.

Speaker Change #105: Thank you for watching.

Speaker Change #106: Thank You operator I think nothing more to add from our side and I appreciate everyone joining the call this morning and if there's any further follow-up we'll be happy to take them online one by one or sorry separately offline one by one

Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude the conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your lines. Have a good weekend.

Speaker Change #107: Thanks. Thanks, Operator.

Speaker Change #107: [inaudible]

Dan Ellsworth: Yeah, quick question for you on if you could just highlight any changes that have occurred with respect to the hedges because that seems to be something fairly new since we took over 100% and then just overall on, you know, we've managed the whole project for several, several years, and then now we're kind of on our own, and it seems as if we are. [inaudible] adding additional management and some cost structure to it.

Raj Ray: Okay, that's great, Matt. Thanks a lot. I'm glad you're doing it.

Alfredo: Matt, sorry, I just wanted to reframe maybe my first question on sustaining capital. So basically, your guidance for sustaining capital, excluding waste stripping, is 10 million. So I guess my question is, how much is only waste stripping?

Matt Freeman: But I think from what we've said, you should be able to get a reasonably good estimate of what our stripping cost is. And as we said, it is high through the balance of H2 because we're stripping this larger pit. So that is driving our oil sustain cost number up on a per ounce basis.

Chris Pettman: We're very pleased with the initial results of gold realization intercepted in all three holes. Mineralization is associated with quartz shear veins as is typical of the AGM deposits, and our best intercepts were seen in the Northern Zone and include Hole 3 with 4 meters at 31.57 grams per ton, Hole 8, 16 meters at 3.57 grams per ton, Hole 6, 7 meters at 6.89 grams per ton, Hole 15, 10 meters at 2. Now of note is Hole T3RC24003, which ended with 31.57 grams of material. This is a hole we weren't able to complete due to ground conditions, so it remains open at depth and along the stripes.