Q1 2025 Galiano Gold Inc Earnings Call
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email: Good morning, My name is email and I will be your conference operator today.
Unknown Executive: Good morning, my name is Ina and I will be your conference operator today.
Unknown Executive: At this time, I would like to welcome everyone to the Galiano Gold, Inc. first quarter 2025 financial results conference call. 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 a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press star then the number 2. Thank you.
Speaker Change: At this time I would like to welcome everyone to the Bojangles, Inc. First quarter 2025 financial results Conference call.
Speaker Change: All lines have been placed on mute to prevent any back office.
Okay, just because there might still be a question and answer session.
Speaker Change: If he would like to ask a question. During this time. She star then the number one on your telephone keypad.
Speaker Change: If you would like to withdraw your question. Please press Star then the number two thank you.
Matt Badylak: Mr. Matt Badylak, President and CEO of Galiano Gold, you may begin your conference. Thank you operator and good morning everyone. We appreciate you taking time to join us on the call today to review our first quarter 2025 Galiano Gold results that we released last night.
Matt: Mr. Matt Bad luck, but didn't see Australia on a Golden you may begin your conference.
Speaker Change: Thank you operator and good morning.
Matt: Everyone.
Matt: We appreciate you taking time to join US on the call today to review our first quarter 2025, Galiano Gold results that we released last night.
Matt Badylak: On slide two 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 of the webcast presentation. Yesterday's release details our first quarter 2025 financial and operating results. They should be read in conjunction with our first quarter financial statements and in DNA available on our website and filed on CEDAW Plus and EDGAR. Also, please bear in mind that all dollar amounts mentioned in the conference call today are in US dollars unless otherwise noted. On slide four.
Matt: On slide two.
Matt: We will be making forward looking statements and referring to non <unk> measures. During the call. Please refer to the cautionary notes in risk disclosures in our most recent MD&A as well as the slide of the webcast presentation.
Matt: Yesterday's release details, our first quarter 2020 financial and operating results.
Matt: It should be read in conjunction with our first quarter financial statements and in DNI alone available on our website and filed on SEDAR and Edgar.
Matt: Also please bear in mind that all dollar amounts mentioned in the conference call today are in U S or U S dollars unless otherwise noted.
Matt: On slide four.
Matt Badylak: With me on the call today I have Matt Freeman, our Chief Financial Officer, Michael Cardinaels, our Chief Operating Officer, and Chris Pettman, our Vice President of Exploration. For this presentation, I'll initially provide a brief overview of the quarter. Michael will give an operations update, Matt will discuss the financials, and Chris will review the recent exploration success his team has had at Boray.
Speaker Change: With me on the call today, I'll have Matt Freeman, our Chief Financial Officer, Michael Carlos Our Chief operating Officer, Chris Pittman, Our vice President of exploration.
Bob: So this presentation I'll initially provide a brief overview of the quarter, Bob who will give an operations update Matt will discuss the financials and Chris will review the recent exploration success he statements headed alright.
Matt Badylak: I'll then provide some closing remarks and open the call for Q&A. here on slide five. Please note that we are discussing the AGM results on a 100% basis. Starting with safety, we had two LTIs and three TRIs during the quarter. This equates to a rolling 12-month LTI frequency rate of 0.43 and one total recordable injury per million man-hours worked. This falls short of our zero harm commitment and during the quarter we focus on specific actions to address these incidents and strengthen our safety culture. From a mill throughput and grade perspective, the quarter proceeded largely in line with Q4.
Bob: I'll then provide some closing remarks and open the call for Q&A.
Bob: Yeah.
Bob: Here on slide five.
Bob: Please note that we are discussing the AGM results are 100% basis.
Bob: Starting with safety, we had two L T I's and three T. Our eyes during the quarter. This equates to a rolling 12 month LTI frequency rate of 0.43, and one total recordable injuries per million man hours worked.
Bob: This full short about zero harm commitment and during the quarter, we focus on specific actions to address these incidents and strengthening our safety culture.
Bob: From a mill throughput and grade perspective quota preceded largely in line with Q4 that said an unscheduled two week mill shutdown Judah Sag mill repairs reduced production below initial budget projections impacting gold recovered in the period by approximately 5000 ounces for the quarter.
Matt Badylak: That said, an unscheduled two-week milk shutdown due to SAG mill repairs reduced production below initial budget projections, impacting gold recovered in the period by approximately 5,000 ounces for the quarter. Mining operations recommenced at Asasi during the quarter with initial lower grade oxide ore supplementing material mined from a borate to feed the mill. On an absolute basis, costs remain in line with expectations. so ultimately distributed across pure ounces produced.
Bob: Mining operations recommenced set of sources during the quarter with initial lower grade oxide ore supplementing material mined from a ball right to feed the mill.
Bob: On an absolute basis costs remained in line with expectations.
Bob: So it ultimately distributed across fewer ounces produced.
Matt Badylak: We have made excellent progress on strategic initiatives commencing the NCRAN waste stripping campaign in February ahead of schedule. Our financial position remains robust with $106 million in cash at quarter end and zero debt.
Bob: We have made excellent progress on strategic initiatives commencing the enquired why stripping campaign February ahead of schedule.
Bob: Our financial position remains robust with $106 million in cash at quarter end and zero debt.
Matt Badylak: Our exploration team achieved significant success at Aboray, identifying a promising high-grade zone beneath the main pit. Additional infill drilling at Ebore has strengthened our confidence in the resource model. I'll allow Chris to speak about this in more detail later.
Bob: Our exploration team achieved significant success at a ball right identify promising high grade side beneath the night pit.
Bob: Additional infill drilling at Bora has strengthened our confidence in the resource model all of that Chris to speak about this in more detail later.
Matt Badylak: During the quarter, we also published a five-year outlook, which projects a 75% increase in production from 2024 levels over the next 18 months. I'd like to reiterate that Q1 production figures don't fully represent our expected run rate for the balance of the year. However, the impact of the mill shutdown will result in production moving towards the lower end of guidance in 2025.
Bob: During the quarter. We also published a five year outlook, which projects are 75% increase in production from 2024 levels over the next 18 months.
Bob: I would like to reiterate that Q1 production figures don't fully represent our expected run rate for the balance of the year.
Bob: However, the impact of Neil shut down will result in production moving towards the lower end up got it in 2025.
Michael Cardinaels: Now turning it over to Michael and a discussion on our progress in operations during the quarter. Thank you, Matt, and good morning, everyone. As Matt highlighted, during the first quarter, we unfortunately had two LTIs, resulting in a 12-month rolling LTI frequency rate of 0.43. While this reflects an increase from the prior quarter, a number of safety initiatives were implemented to strengthen our performance moving forward. A mind-wide campaign on hand safety was launched, emphasising awareness and prevention of hand-related injury. Refresher training on hazard identification and timely action closure was delivered to supervisors and managers, while a revised energy isolation procedure was introduced across the AGM.
Michael: Now turning it over to Michael and a discussion on our progress in operations during the quarter.
Michael: Thank you, Matt and good morning, everyone.
Michael: As Matt highlighted during the first quarter, we unfortunately had to L. T Ards, resulting in a 12 month rolling LTI frequency rate of 0.43.
Michael: While this reflects an increase from the prior quarter.
Michael: A number of safety initiatives were implemented to strengthen their performance moving forward.
Michael: Our mine wide campaign on the hand safety was launched emphasizing awareness and prevention of hand related injuries.
Michael: Refresher training on the hazard identification.
Michael: And timely action closure was deliberate to supervisors and managers, while our revised energy off the license for installation procedure was introduced across the AGM.
Michael Cardinaels: Emergency response capabilities were also reinforced through targeted training and a cyanide management simulation.
Michael: Emergency response capabilities, we're also reinforced through targeted training.
Michael: Cyanide management simulation.
Michael Cardinaels: Looking at our mining performance during the quarter. Re-establishing the Asasi Pit commenced in January and ramped up steadily in Q1, with the mining fleet now split between Obore and Asasi Pit. We saw a 4% increase in material movement for the two pits compared to the fourth quarter of 2024. The commencement of NCRAN stripping in February, ahead of schedule, resulted in an overall increase of 12% total material movement compared to Q4 2024. Abori continues to expand now that we have completely mined through the historical Resolute Pit and backfill material, opening up the pit to allow for more efficient mining practices.
Michael: Looking at our mining performance during the quarter.
Michael: Reestablishing the Src pit commenced in January and ramped up steadily in Q1 with the mining fleet now split between a boy in the Stasi pits.
Michael: We sort of focus on increasing material movement, the two pits compared to the fourth quarter 2024.
Michael: The commencement of <unk> stripping in February ahead of schedule.
Michael: In an overall increase of 12% total material movement compared to Q4 'twenty to 'twenty four.
Michael: Our board continues to expand now that we have completely mine through the historical resolute pit and backfill material opening up the pit to allow for more efficient mining practices.
Michael Cardinaels: This, combined with establishing mining at SRC, allowed for significantly more ore production, increasing 144% compared to Q4 2024.
Michael: This combined with establishing mining at a saucy allowed for significantly more oil production.
Michael: Increasing 144% compared to Q4 2024.
Michael Cardinaels: On to slide seven, please. On the processing performance, as Matt mentioned, The two-week mill shutdown impacted material process for the quarter. However, we were able to blend ore successfully from Asasi and Obore, allowing for better throughput on a tonnes-per-hour basis than planned. Crushing limitations will continue to restrict mill throughput until the secondary crusher is commissioned in Q3. However, our blend strategy is helping to mitigate some of the Crusher project is progressing well and the majority of the critical components have been received on site or in port awaiting customs clearance, including the crusher itself. More ore is expected to be available from Obore and Azate pits in the coming quarters, reducing the reliance on historical stockpiles and providing a higher-grade feed source to the mill.
Michael: On to slide seven please.
Michael: On the processing performance as Matt mentioned.
Michael: The two week no shutdown impacted material processed for the quarter. However, we were able to blend or successfully for myself being a boring, allowing for better throughput on a tons per hour basis than planned.
Michael: Crushing limitations will continue to restrict mill throughput until the secondary crusher was commissioned in Q3.
Michael: However, our blend strategy is helping to mitigate some of the impact.
Michael: The Crusher project is progressing well and the majority of the critical components have been received on thoughts or.
Michael: In port awaiting customs clearance, including the crusher itself.
Michael: Moral is expected to be available from our board and exhausted pits in the coming quarters, reducing the reliance on historical stockpiles and providing a higher grade feed source to the mill.
Michael Cardinaels: We produced just under 21,000 ounces for the quarter, primarily impacted by the extended mill shutdown. But with the increasing availability of ore and higher grades from Abore and Asasi in the second half of the year, and the expectation of the secondary crusher being online in Q3, we are maintaining our production guidance of between 130,000 and 150,000.
Michael: We produced just under 21000 ounces for the quarter, primarily impacted by the extended mill shut down.
Michael: But with the increasing availability of ore and higher grades from a boy. That's obviously in the second half of the year and the expectation of the secondary crusher being online in Q3, we are maintaining our production guidance of between 130 and 150000 ounces.
Michael Cardinaels: On to slide eight, please. Unit costs for mining at Abori and Asasi are in line with our expectations and have come down to $3.31 per tonne from $3.41 per tonne in Q4 2024. with $4.75 a ton in Q4 2024, with a larger percentage of material now being trucked from a Bore compared to a Sase, which has the higher unit rate being further from the Obertan Rompat. On the back of the mill down time, the lower tonnes milled resulted in higher than planned unit costs for the processing plant at $14.37 per tonne, although down 9% compared with the previous quarter Q4 2024, attributable in part to feeding some historical stockpile material in Q1, which is softer than the Aborey Ore.
Michael: Onto slide eight please.
Michael: Unit costs for mining at a bar in the south of the AR in line with our expectations kind of come down to $3.31 per ton from $3.41 per ton in Q4 2024.
Michael: Okay.
Michael: Great.
Michael: Although with some 70 folks at some time in Q4 2024 with a larger percentage of material now being trucked from a boy compared to a therapy, which has the higher unit rate being further from the herbicide and a real pet.
Michael: On the back of the mill downtime the lower tons milled resulted in higher than planned unit costs for the processing plant at $14.37 per ton.
Michael: Although down 9% compared with the previous quarter Q4, 2024 attributable in part to feeding some historical stockpile material in Q1, which is softer than the Bora at all.
Michael Cardinaels: We saw approximately $3.3 million spent on development capital in the quarter and at NCRAN we spent another $3.2 million. as the waste stripping campaign commenced ahead of schedule. Site G&A for the quarter was $5.78 per tonne. per tonne milk. An improvement over Q4's $6.28 per tonne milk. Overall, costs are being well managed and we should see better alignment as the year progresses and the plant processes more tons and we produce more ounces.
Michael: We saw approximately $3 $3 million spent on development capital in the quarter.
Michael: The increment, we spent another $3 $2 million.
Michael: As the waste stripping campaign commenced ahead of schedule.
Michael: G&A for the quarter was $5.78 per ton.
Michael: It's on milk and improvement over Q4 $6.
Michael: 28 cents per ton milled.
Michael: Overall costs are being well managed and we should see better alignment as the year progresses, and the plant processed more tons and we produced more ounces.
Matthew Freeman: So with that, I would like to turn it over to Matt Freeman to discuss the company's financial results. Slide nine, please. Thanks Mick.
Michael: So with that I would like to turn it over to Matt Friedman to discuss the company's financial results Slide nine please.
Michael: Okay.
Matt Friedman: Thanks, Nick good morning, everyone.
Matthew Freeman: Good morning everyone. On this slide we've outlined some of the key financial metrics for the quarter. We generated revenues of $77 million in the first quarter at a realised price of $2,833 per ounce, being able to sell gold at market prices, having terminated the offtake agreement back in Q4. We generated positive income from mine operations of $15.4 million but net earnings were negatively affected by the fair value adjustments to our hedge book following the historic run-up in gold prices such that we recorded a net loss of $29 million. However, adjusting for the unrecognized portion of the hedge loss, adjusted income was $3 million, whilst EBITDA was approximately $26 million.
Matt Friedman: On this slide we've outlined some of the key financial metrics for the quarter.
Matt Friedman: We generated revenues of 77 million in the first quarter at a realized price of $2933 per ounce.
Matt Friedman: So go to market prices, having 10 minutes you have to take it.
Back in Q4.
Matt Friedman: We generated positive income from mine of prices of $15 4 million, but net earnings were negatively affected by the fair value adjustments to our hedge book following the historic run up in gold prices such that we recorded a net loss of $29 million.
Matt Friedman: However, adjusting for the unrecognized portion of the head last hedge loss adjusted income was $3 million.
Matt Friedman: EBIT was approximately $26 million.
Matthew Freeman: We generated $26 million in cash flows from operations and ended the period flat with respect to cash despite the ongoing stripping at Bore, recommencing mining at Asasi and beginning the waste strip at NCRAS. We continue to focus on the cost structure of the mine and are pleased the operating costs in aggregate remain consistent with recent quarters. Given production is on the low end this quarter, that does translate into higher ASIC at $2,500 per ounce, but we're confident that as production increases in line with the 2025 plan, that ASIC will start to fall commensurally. At this point, it is worth noting that a historically high gold price, although obviously a positive for the business overall, does create some uncontrollable pressure on ASIC by increasing royalty costs.
Matt Friedman: We generated 26 million in cash flows from operations and ended the period with respect to cash despite the ongoing stripping it boy Recommencing mining it is sofie and beginning the waste stripping and Chris.
Matt Friedman: We continue to focus on the cost structure, the mined and placed our pricing costs in Africa remained consistent with recent quarters.
Matt Friedman: Given production was on the low end of this quarter that does translate it hi, Isaac $2500 per ounce, but we're confident that as production increases in line with the 2025 plan that I think will start to fall commensurately.
Matt Friedman: At this point it is worth noting that historically high gold price, obviously, a positive for the business I through does create some uncontrollable pressure on AC by increasing royalty costs.
Matthew Freeman: Our guidance had assumed royalties would be based under $2,500 per ounce, or approximately $125 per ounce of royalty. Secondly, for our business, in March, the Ghanaian government increased the growth and sustainability levy by 2%, which is directly applied to revenues. The impact of both high gold prices and the high levy could impact ASIC by as much as $55 per ounce based upon current spot gold prices. Mining costs, as Mick noted, were below $3.50 per tonne mined. This is a key component of the cost structure, which would help sustain margins in this high-price environment. We also remain disciplined with capital deployment, only spending when critical and with clear line of sight to value creation.
Matt Friedman: Our guidance had assumed royalties would be based on a 2500 per ounce or approximately $125 per ounce of royalty.
Matt Friedman: Secondly for our business in March the Canadian government increased the crisis sustainability level by 2%, which is directly apply to revenues the.
Matt Friedman: Impacted by high coal prices and the high Levy could impact IC by as much as $65 per ounce based upon current spot gold prices.
Matt Friedman: Mining costs at or below $3 50 per tonne mined. This is a key competitive cost structure, which should help sustain margins at as high price environment.
Matt Friedman: We also remain disciplined with capital deployment only spending what critical with clear line of sight to value creation.
Matthew Freeman: Our largest ongoing capital project is the installation of the second recrushing circuit, which is critical to maintaining throughput at or above nameplate levels, even when processing harder material from end-cran and borate. This remained on track for completion in Q3 2025. Additionally, our Capital Programme for the year includes the next list of the tailings facility, Stage 8, which is expected to commence later this year. As we've mentioned, we continue to maintain a very strong balance sheet, even during this period of high stripping, ending the period with $106 million in cash and still no debt. We remain in a very strong position to continue to develop.
Matt Friedman: Our largest ongoing capital project installation of the secondary crushing circuit, which is critical to maintaining throughput at or above nameplate levels.
Matt Friedman: Pricing harder material from and credit it boy.
Matt Friedman: This remains on track for completion in Q3 2025.
Matt Friedman: Additionally, our capital program in place to Netflix to the tailings facility stage H, which is expected to commence later this year.
Matt Friedman: Slide 10 please.
Matt Friedman: Yeah.
Matt Friedman: As we've mentioned we continue to maintain a very strong balance sheet. Even during this period of high stripping ending the period with 106 million in cash and still no debt. We remain in a very strong position to continue to develop and Craig.
Matthew Freeman: invest in the exploration. and continue to expirate to execute on the Osanko mine plan.
Matt Friedman: First in the exploration.
Matt Friedman: We continue to exit rate to execute on the mine plan.
Chris Pettman: And with that, I'll turn it over to Chris Pettman, who will in part discuss the positive drilling results we recently published. Great. Thanks, Matt. Well, it was another busy quarter for us in exploration, with two active drill programs at Abore and Acoma, as well as various ongoing generative activities.
Speaker Change: And with that I'll turn it over to Chris Patman within pop discuss the positive drilling results. We recently published.
Chris Patman: Great. Thanks, Matt.
Chris Patman: Well it was another busy quarter for us in exploration with two active drill programs at a boring in a coma as well as various ongoing generative activities.
Chris Pettman: At Acoma, our drilling targeted northeastern extensions of the mineralized shear zones, a long strike at the positive results we achieved in 2024, with drilling now complete and results expected in Q2. Our regional generator activities have continued, including the startup of the SkyGold B ground IP survey, which was designed to assist in additional drill targeting following the 2024 drilling that identified multiple large gold-bearing shear zones at the SkyGold prospect area. Drilling activities also continued, I should say targeting activities also continued at the Enceroma target area, which is located along strike to the southwest of Encrant.
Chris Patman: In a coma or drilling targeted northeastern extensions of the mineralized shear zones along strike. The positive results. We achieved in 2024 with drilling now complete and results expected in Q2.
Chris Patman: Our regional general activities have continued including the startup of the Sky go be ground. The IP survey, which was designed to assist in additional drill targeting following the 2024 drilling that identified multiple large gold bearing shear zones at the Sky Globe prospect area.
Chris Patman: Drilling activities also continued I should say targeting activities also continued at the <unk> target area, which is located along strike to the southwest of incorrect.
Chris Pettman: Obviously, results from drilling in the Boré were the highlight of the quarter for us, which I'll discuss in some detail. The current program was primarily focused on infill drilling in and around the known South high-grade zone in order to increase our confidence in the mineral resource model as we advance mining at the South pit, as well as testing for continuity of mineralization below the reserve pit in certain prioritized areas. Results were excellent, with all of the holes returning intercepts that were either in line with or exceeding expectations of the mineral resource model. With these infill holes, we have now expanded the strike length of the South high-grade zone from approximately 90 meters to 180 meters.
Chris Patman: Obviously results from drilling into <unk> were the highlight of the quarter for us, which I'll discuss in some detail.
Chris Patman: The current program was primarily focused on infill drilling in and around the known so it's high grade zone in order to increase our confidence in the mineral resource model as we advance mining at the south pit as well as testing for continuity of mineralization below the reserve pit and certain prioritized areas.
Chris Patman: Results were excellent with all of the holes returning intercepts that were either in line with or exceeding expectations of the mineral resource model with these <unk>. We have now expanded the strike length of the South high grade zone from approximately 90 meters to 180 meters.
Chris Pettman: As you will have seen from our press release last week, we reported numerous thick, high-grade intervals throughout this zone, including hole 315, which was 34 metres at 12 grams a tonne gold from 192 metres, and 11 metres at 7.2 grams a tonne from 239 metres, as well as hole 325, which was 38 metres at 6.7 grams a tonne from 195 metres. These holes are representative of the quality of mineralization we see throughout this zone.
Chris Patman: As you will have seen from our press release last week, we reported numerous thick high grade intervals throughout this zone.
Chris Patman: All 315, which was 34 meters at 12 grams, a ton gold from 192 meters and 11 meters at seven two grams, a tonne from 239 meters as well as all $3 25, which was 38 meters at $6 seven grams, a tonne from 195 meters.
Chris Patman: These orders are representative of the quality of mineralization that we see throughout this zone.
Chris Pettman: A particular note this quarter is the discovery of a new high-grade zone below the reserve pit and outside of the mineral resource at the south end of the Ibori main pit. Hole 346 intercepted 50 metres at 3.1 grams a tonne from 100 metres, which places the top of this zone immediately below the reserve pit. This is obviously an exciting result for us, as it further highlights the fact that the Ibori mineralising system may indeed be much larger than we currently understand. Based on these results, we have identified several high-priority structural drill targets at depth, as mineralisation remains open across the entire 1,800-metre deposit strike length.
Chris Patman: A particular note this quarter is the discovery of a new high grade zone below the reserve pit and outside of the mineral resource at the South end of the <unk> main pit.
Chris Patman: All $3 46 intercepted 50 meters at three one grams, a tonne from 100 meters, which places the top of this all immediately below the reserve pit. This is obviously an exciting result for us as it further highlights the fact that the mineralized mineralized system may indeed be much larger than we currently understand.
Chris Patman: Based on these results we have identified several high priority structural drill targets that that's as mineralization remains open across the entire 1800 meter deposit strike length. The next few slides I'll show some of the highlights of <unk> results slide please.
Chris Pettman: The next few slides I'll show some of the highlights of the Ibori results. So this image shows the location of the 2025 drilling in plan view, along with the position of some of the best intercepts. As you can see, we focused on the south pit, but did put several holes into the northern pit area, which also returned excellent intercepts, including 23 metres at 3.1 grams a tonne in hole 329.
Chris Patman: So this shows the location of the 2025 drilling in plan view, along with the position of some of the best intercepts.
Chris Patman: As you can see we focused on the south pit, but did put several holes into the northern pit area, which also returned excellent intercepts, including 23 meters at $3, one gram per tonne and whole $3 29.
Chris Patman: Next slide.
Chris Pettman: These two cross-sections, I think, are helpful to demonstrate the growth potential at Abore. The image on the right shows the position of the new high-grade discovery at Abore, Maine, immediately below the reserve and outside of the resource. This zone is open down-dip and along strike and is a priority target for follow-up. The image on the left shows the new northern extent of the south high-grade zone. These two wide, high-grade intercepts both lie below the reserve pit at grades that were better than expected in the mineral resource model and contributed to extending the strike length of the zone, which we now know to be approximately 180 metres.
Chris Patman: These two cross sections I think are helpful to demonstrate the growth potential at a boring the image on the right shows the position of the new high grade discovery at a board meeting immediately below the reserve and outside of the resource.
Chris Patman: This is one is open down dip and along strike and is a priority targets for follow up the.
Chris Patman: The image on the left shows the new northern extent of the South High grade zone. These two wide high grade intercepts, both lie below the reserve grades that were better than expected in the mineral resource model and contributed to the two extending the strike length of the zone, which we now know to be approximately 180 meters.
Chris Patman: Next slide.
Chris Pettman: This is a long section through the Abori deposit from north to south and shows the location of the newly discovered zone as well as the south high-grade zone discovered in 2023. 2025 drilling is shown here in teal with previous drilling shown in purple. In addition to increasing confidence in the mineral resource model, this latest round of drilling has confirmed that mineralization continues at depth and has provided valuable new structural insights to the team. There are several structural corridors that may be controlling these high-grade ore chutes, as highlighted here in this image, along with several high-priority targets that remain untested.
Chris Patman: This is a long section through the aboard a deposit from north to South and shows the location of the newly discovered zone as well as the South high grade zone discovered in 2023 2025 drilling as shown here until with previous drilling shown in purple.
Chris Patman: In addition to increasing confidence in the mineral resource model. This latest round of drilling has confirmed that mineralization continues at depth and has provided valuable new structural insights team.
Chris Patman: There are several structural corridors that may be controlling these high grade ore shoots as highlighted here in this image along with several high priority targets that remain untested.
Chris Pettman: The next phase of drilling will test these multiple corridors for further extensions of this high-value ore, and we believe there is significant upside for further resource growth at Obore, either for future surface mining expansions or an eventual transition to underground operations, given the high grades and significant width we are seeing as we continue to test this faucet.
Chris Patman: The next phase of drilling will test these multiple corridors for further extensions of this high value ore and we believe there is significant upside for further resource growth at a boring either for future surface mining expansions or an eventual transition to underground operations given the high grades and significant width, we're seeing as we continue to test pilot.
Chris Pettman: The Exploration Team is busy planning for our next round of drilling, and we're certainly excited to see what else Sappori has in store for us.
Matt: The exploration team is busy planning for our next round of drilling and we're certainly excited to see what else. The poor has in store for us with that I'll give it back to you Matt. Thank.
Chris Pettman: With that, I'll give it back to you, Matt. Thank you, Chris.
Matt Friedman: Thank you Chris.
Matt Badylak: Moving on to slide 15. With our asset highly leveraged to gold and metal prices well above $3,000 an ounce, Galiano is uniquely positioned to deliver exceptional value for our shareholders. We project a 75% increase in gold production by 2026. Our investment in developing Cut 3 at NCRAN is off to a solid start and a strategic focus of our technical team is to develop a maiden underground resource at the AGM by year end. We continue to operate from a position of financial strength with over $100 million in cash and zero debt. Galiano's compelling value proposition, based on strong organic growth over the next two years and potential expansion of mineral resources through effective exploration, as we have seen at Obore, make us an attractive investment opportunity in today's market.
Matt: Moving on to slide 15.
Speaker Change: Without asset highly leveraged to gold and middle prices, well above $3000 of laws Galliano is uniquely positioned to deliver exceptional value for our shareholders.
Speaker Change: We appreciate the 75% increase in gold production by 2026.
Speaker Change: Our investment in developing catch rate and cran is off to a solid start and our strategic focus of our technical team is to develop a maiden underground resource at the AGM by yearend.
Speaker Change: We continue to operate from a traditional financial strength with over $100 million in cash and zero debt.
Speaker Change: Gallianos compelling value proposition based on strong organic growth over the next two years and potential expansion of mineral resources through effective exploration as we have seen at the ball right make us an attractive investment opportunity in todays market.
Matt Badylak: With that, I'd like to turn it back to the operator and open up for any questions. Thank you.
Speaker Change: With that I'd like to turn it back to the operator and open up for any questions. Thank you.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the ones on your telephone keypad you would hear you ponder Johanna has been raised and should you wish to cancel your request. Please press star followed later to you.
Unknown Executive: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your telephone keypad. You will hear a prompt that your hand has been raised and should you wish to cancel your request, please press star followed by the two. If you're using a speakerphone, please lift the handset before pressing any. One moment please for your first question.
Speaker Change: You're using a speaker phone please lift the handset before pressing any Keith one moment. Please for your first question.
Heiko Ihle: Your first question comes from the line of Heiko Ihle from HSC Wainwright, please go ahead. Hey there. Thanks, Matt and team. Thanks for taking my question. Thanks Heiko, I appreciate it. Good morning. Sorry, I just heard silence there for a second.
Speaker Change: Your first question comes from the line of Heiko.
Speaker Change: From H C. Wainwright. Please go ahead.
Heiko: Thanks, Matt and team thanks for taking my questions.
Speaker Change: Okay.
Speaker Change: Yeah. Thanks, I appreciate it good morning, perfect I, just heard silos, there first thing.
Chris Pettman: Going through the presentation here that you were giving during this call, page 12, obviously almost all the drilling was in the South Pit. Just walk me through your intermediate and longer term expectations. I mean, 2025, I assume there'll be at least a little bit of drilling elsewhere. But walk us through your longer term expectations and then also walk us through with maybe what you saw on drilling versus what you expected to see. Sure.
Speaker Change: I'm going through a presentation here that we're giving during this call page 12, obviously almost all the drilling in the south.
Speaker Change: Got it.
Speaker Change: Just walk me through your intermediate and longer term expectations, I mean, 2025, I assume there'll be at least a little bit of drilling elsewhere, but walk us through your longer term expectations and then also.
Speaker Change: Walk us through with maybe what you saw on drilling versus what you expected to see.
Speaker Change: Sure, maybe I'll take that one and heiko.
Chris Pettman: Maybe I'll take that one, Heiko. Good morning. Yeah, I guess I'll start with first what we expected to see versus what we did see. And you're right in that we focused on the South Pit, primarily because, Heiko, initially we wanted to understand and make certain that the high-grade zone was as robust as the model was predicting it was. And in all of the holes we drilled, we saw, as I mentioned in the call here, either as good grades and intercepts as we thought we were going to, or better. So typically speaking, they were wider and higher grade than we thought they were going to be in our current resource model, which is obviously one of the things that was exciting for us, particularly with the expansion of the zone, right?
Speaker Change: Yeah.
Speaker Change: Yes, I guess I'll start with first what we expected to see versus what we did see.
Speaker Change: You're right in that we focused in the south pit, primarily because HEICO. Initially we wanted to understand and make certain that the high grade zone with those robust is the model was predicting it was and in all of the holes. We drilled we saw as I mentioned in the call here either as good grades and intercept as we thought we were going to or better.
Speaker Change: So typically speaking they were wider and higher grade than we thought they were going to be in our current resource model, which is obviously one of the things that so that was exciting for us, particularly with the expansion of the zone right. Before we started that drilling it was 90 meters in strike length and now with the infill we've expanded that and we know what it's a 180 meters a significantly high grade material.
Chris Pettman: Before we started that drilling, it was 90m in strike length. And now with the infill, we've expanded that and we know it's 180m of significantly high-grade material. So I think that hopefully that answers that question about what we saw versus expectations. Obviously that the new discovery, that was out of the blue in terms of the resource model. The model there had little to no mineralization. We suspected there might have been a structure there that we were going to chase, and obviously we were happy with those results with a very chunky bit of high-grade mineralization at 50m.
Speaker Change: Ariel.
Speaker Change: So I think that hopefully that answers that question about what we what we saw versus expectations, obviously that the new discovery that was out of the blue in terms of the resource model and the model there had little to no mineralization.
Speaker Change: We suspect that there might have been a structure there that we were going to chase and obviously, we're happy with those results with you know.
Speaker Change: A very chunky bit of high grade mineralization at 50 meters.
Chris Pettman: And importantly, it looks very similar to the high-grade zone in South Pit in terms of its morphology. In terms of the next phases here, we are currently drilling some deeper targets all along the strike length of the ore body. We're still at shallow depths here, right? We've only drilled to about 150m below the surface. So we have a pretty comprehensive plan to test these targets further. We're currently designing the plans now for follow-up. We'll be testing the down-dip extensions of these zones, both the South Pit and the new high-grade discovery, as well as some of these structural targets that we've identified now that are pretty exciting for us, whether that means that we're at depths that could be amenable to underground mining, or whether that could be future expansions of the open pit.
Speaker Change: And importantly, it looks very similar to the high grade zone in South pit in terms of its morphology in.
Speaker Change: In terms of the the next phases here, we are currently drilling and some deeper targets all along the strike length of the ore body I mean, we're still at shallow depths here right. I mean, we've only drilled to about 150 meters below the surface.
Speaker Change: So we have a pretty comprehensive plan to test. These targets further we're currently designing the plans now for follow up will be testing the down dip extensions of these zones, both the south pit and then the new high grade discovery as well as some say some of these structural targets that we've identified now.
Speaker Change: That are pretty exciting for us whether that means that we're at depths that could be amenable to underground mining or whether that could be future expansions of the <unk>.
Speaker Change: The open pit, we're looking at both scenarios.
Heiko Ihle: We're looking at both scenarios. Does that answer your question, Heiko? I think that's a very good answer to the question, and I think that's helpful for us to analyze the longer term here as well. You're maintaining your production guidance here today, but I got to ask, with the secondary crusher commissioning in Q3, you state that the majority of equipment has been received or is awaiting custom clearance, which at least means it's on land. What happened with the cost of all the equipment when it was all said and done versus your expectations? How much has actually been paid thus far, and is there any balance still owed, not owed?
Speaker Change: Does that answer your question Heiko.
Heiko: I think that's a very good answer to the question I think that's that's helpful for us to analyze for the longer term here as well.
Speaker Change: You're maintaining your guidance here today, but I'm going to ask me with the secondary crusher.
Speaker Change: Commissioning in Q3, you state that the majority of equipment has been received or as a way to cost them cleared which at least means it's on land.
Speaker Change: What happened with the cost of all the equipment and when it was all set and done versus your expectations. How much has actually been paid thus far and is there any balance still owns over gold.
Heiko Ihle: And then also just changing course a bit, what sort of downtime should we expect for the install? Thank you.
Heiko: And then also just traded course, a bit what sort of downtime should we expect for the installed. Thank you.
Speaker Change: Good morning, Hi, guys not frame you have I'll take the cost piece of that and say that the.
Matthew Freeman: Morning Heiko, it's Matt Freeman here. I'll take the cost piece of that and so the secondary crusher project remains on budget. As you'd expect, we've, as we said, we're expecting to finish that in Q3. So we've only spent a portion of the amount, a lot of the capped equipment we've paid installments and partial upfront payments. We spent a couple of million bucks this quarter. And I think the overall budget was around five. So we've still got some more to spend. But it's on budget, we're happy with the way it's tracking. And importantly, as you say, the equipment's in country and is moving towards site if it's not there already.
Heiko: The secondary Crusher project remains on budget.
Heiko: As you would expect as we said we expected to finish that in Q3. So we've already spent a portion of the amount of lot of lots of accounts equipment with pipe installments and Pos upfront payments.
Heiko: Spend a couple of million Bucks this quarter and I think the overall budget was around five so we've still got some more to spend and.
Heiko: But its on budget, we're happy with where it's tracking.
Heiko: As you say the equipments.
Heiko: In country and it is moving towards site, it's not there already with respect to downtime I'll, maybe flip that rebound back to Mick if you can give a bit more details on that.
Michael Cardinaels: With respect to downtime, I'll maybe flip that around back to Mick, if he can give a bit more details on that. Yeah, thanks, Matt.
Mick: Yeah. Thanks, Matt.
Michael Cardinaels: Morning, Heiko. In terms of downtime, we should only need a number of days to tie in in the circuit once everything is being commissioned. We're luckily able to do most of the pre-works while the plant is still running. And even then, once we go to tie in the secondary crusher and the new conveyor systems themselves, we can isolate the feed from our primary crusher and still run the feeder that comes from our core soil stockpile to maintain some mill production while we're Tying in the rest of the circuit. So we only expect it to be down for a couple of days, and we'll tie in some other maintenance work.
Heiko: I Wanna Calico.
Speaker Change: In terms of downtime, we we should only need to a number of days to tie in in the circuit.
Speaker Change: Once everything is being commissioned we luckily.
Heiko: <unk> able to do most of the pre works while the plant is still running and even then once we go to tie in the <unk>.
Heiko: Secondary crusher in the new conveyor systems themselves, we can isolate the feed conveyor from from a primary crusher and still run the speed of that comes from a coarse ore stockpile to maintain some no production ball with.
Heiko: Tying in the rest of the circuit. So we only expect it to be down for a couple of days and we will try and some other maintenance work.
Michael Cardinaels: along with that Crushershut and Tyne. So we'll do Mill Re-Line and such to take advantage of that. that Crusher tie-in shutdown, I guess.
Heiko: Along with the crusher shut in time, so we will do and Bel Ray law and such that to take advantage of that.
Heiko: The crusher toy and shut down I guess.
Heiko: Okay.
Michael Cardinaels: So, do you expect to even feel the impact? I mean, I assume there's preventative maintenance going on just about every quarter. Should we even model any sort of impact from this? We don't really expect a significant impact from the shut to actually tie the crusher in itself. And we have contingencies in place with our mobile crushers and everything. There is some additional work for shortening some of the conveyors, which will no longer be necessary once the secondary crusher is installed, but we'll push those out to a shutdown later in the year to maintain that flexibility should we have any issues with the commissioning.
Heiko: So do you expect to even feel the impact because I mean, I assumed or preventative maintenance going on just about every quarter should we should we even model any sort of impact from this.
Heiko: We don't really expect a significant impact from the shift to actually toward the crusher in itself and.
Heiko: We have contingencies in place with your mobile crushers in and everything there is some additional work for shortening some other combos, which will no longer be necessary once the secondary crushers installed, but well push those out to two of them are shut down later in the year to to maintain that flexibility should we have any issues with the commissioning.
Heiko: Right.
Matthew Freeman: We expect... And Heiko, maybe I... Yeah, so maybe I'll just... add something to that as well. I mean, the production forecast that we're estimating for this year do include all of that downtime as well, right? So that's been captured in the production numbers and our projections for the year. So, you know, nothing additional to what what's already been captured there.
Heiko: We expect.
Heiko: Yes.
Heiko: Yeah, So maybe I'll just.
Heiko: <unk>.
Heiko: Add something to that as well I mean, the production forecast that way.
Heiko: If the 19th of this year to include all of that downtime as well right. So that's been captured in the production numbers are projections for the year. So nothing.
Heiko: Additional to what was already being captured that.
Heiko: Okay.
Heiko Ihle: That's helpful. I'll get back to you and stop hogging up the question line here. Thanks for the answers. Perfect, thank you. Thank you.
Heiko: That's helpful I'll.
Heiko: Ill get back in queue and stop hogging up the question line here. Thanks for the answers.
Heiko: Okay. Thank you.
Speaker Change: Thank you once again should you have a question. Please press star followed by the one on your telephone keypad.
Unknown Executive: Once again, should you have a question, please press star followed by the one on your telephone keypad. Once again, that is star and one to ask a question. Thank you.
Heiko: Once again that is star and wanted to ask a question.
Heiko: Thank you that ends our question and answer session and this concludes today's call. Thank you for participating you may all disconnect.
Unknown Executive: That ends our question and answer session and this concludes today's call. Thank you for participating. You may all disconnect.
Heiko: Okay.
Heiko: Yeah.
Heiko: Okay.
Heiko: Yeah.
Heiko: Okay.
Heiko: Okay.
Heiko: Yes.
Heiko: Okay.
Heiko: Sure.