Q2 2025 Galiano Gold Inc Earnings Call
Speaker #2: 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 ePad.
Speaker #2: If you would like to withdraw your question, please press *2. Thank you. Mr. Matt Badylak, incident and CEO of Galiano Gold, you may begin your conference.
Speaker #3: Thank you, Jenny, and good morning, everyone. We appreciate you taking time to join us on the call today to review Galiano Gold's second quarter 2025 results that we released yesterday after market close.
Matt Badylak: Thank you, Jenny, and good morning, everyone. We appreciate you taking time to join us on the call today to review Galiano Gold Inc.'s second quarter 2025 results that we released yesterday after market close. On slide two, 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 MDNA, as well as this slide of the webcast presentation. Yesterday's release details our second quarter 2025 financial and operating results. They should be read in conjunction with our second quarter financial statements and MDNA available on our website and filed on CDART+ and EDGAR. Also, please bear in mind that all dollar amounts mentioned on the conference call today are in U.S. dollars unless otherwise noted.
Speaker #3: 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.
Speaker #3: Yesterday's release details our second quarter 2025 financial and operating results. They should be read in conjunction with our second quarter financial statements and MD&A available on our website and filed on CDAR Plus and EDGAR.
Speaker #3: Also, please bear in mind that all dollar amounts mentioned on the conference call today are in US dollars unless otherwise noted. Moving to slide four, with me on the call today, I have Michael Cardinals, our chief operating officer.
Matt Badylak: Moving to slide four, with me on the call today, I have Michael Cardinaels, our Chief Operating Officer, Matthew Freeman, our Chief Financial Officer, and Chris Pettman, our Vice President, Exploration. For this presentation, I will initially provide a brief overview of the quarter. Michael will give an operations update, Matthew will discuss the financials, and then Chris will review the recent exploration success his team has had at the Abore (Bull Ray) deposit. I will then provide some closing remarks and open the call for Q&A. Here on slide five, we can see the team commenced building momentum during the quarter towards a stronger second half of the year. I am pleased to report that we saw a reduction in significant safety incidents during the period, with no lost time injuries and no total recordable incidents.
Speaker #3: Matthew Freeman, our chief financial officer. And Chris Pettman, our vice president exploration. For this presentation, I will initially provide a brief overview of the quarter.
Speaker #3: Michael will give an operations update. Matthew will discuss the financials, and then Chris will review the recent exploration success his team has had at a bull rate.
Speaker #3: I'll then provide some closing remarks and open the call for Q&A. Here on slide five, we can see the team commence building momentum during the quarter towards a stronger second half of the year.
Speaker #3: I am pleased to report that we saw a reduction in significant safety incidents during the period, with no lost-time injuries and no total recordable incidents.
Speaker #3: Looking at operations, our mining contractor increased ore production from a bull rate and a SARSI by 5% quarter on quarter, and the stripping of the Encran deposit advanced ahead of schedule during the period.
Matt Badylak: Looking at operations, our mining contractor increased ore production from Abore (Bull Ray) and Assasi by 5% quarter on quarter, and the stripping of the Enkran deposit advanced ahead of schedule during the period. On the processing side, progress on the secondary crusher accelerated towards completion during the quarter, and I am pleased to report that the commissioning of the circuit commenced slightly ahead of schedule in late July. Michael will provide more details on this and highlight the production benefits we expect to realize post-commissioning and optimization of the circuit. Gold production increased to just over 30,000 ounces in Q2. This is an increase of 46% from Q1 and brings our year-to-date production to just over 51,000 ounces.
Speaker #3: On the processing side, progress on the secondary crusher accelerated towards completion during the quarter, and I am pleased to report that the commissioning of the circuit commenced slightly ahead of schedule in late July.
Speaker #3: Michael will provide more details on this and highlight the production benefits we expect to realize post-commissioning and optimization of the circuit. Gold production increased to just over 30,000 ounces in Q2.
Speaker #3: This is an increase of 46% from Q1 and brings our year-to-date production to just over 51,000 ounces. Moving to our financial performance, we saw a 10% reduction in all-in sustaining cash costs during the quarter, which saw us generate $36 million in cash flow from operating activities, ending the period with $115 million in cash and no debt.
Matt Badylak: Moving to our financial performance, we saw a 10% reduction in all-in sustaining cash costs during the quarter, which saw us generate $36 million in cash flow from operating activities, ending the period with $115 million in cash and no debt. Matt will provide more details on this shortly. Finally, I will briefly touch on exploration. We saw positive results from our deep step-out drilling program at the Abore (Bull Ray) deposit, with mineralization intercepted in all four holes across a 1,200-meter strike length. This included a particularly strong intercept of 36 meters at 2.5 grams per ton. The program confirmed that the Abore (Bull Ray) granite and mineralizing system continues 200 meters below our current mineral reserve pit shell over a significant strike length. Chris will provide more commentary on the program later on the call.
Speaker #3: Matt will provide more details on this shortly. Finally, I will briefly touch on exploration. We saw positive results from our deep step-out drilling program at the bull rate deposit, with mineralization intercepted in all four holes across a 1,200-meter strike length.
Speaker #3: This included a particularly strong intercept of 36 meters at 2.5 grams per ton. The program confirmed that the bull rate granite and mineralizing system continues 200 meters below our current mineral reserve pit shelf over a significant strike length.
Speaker #3: Chris will provide more commentary on the program later on the call. Now turning it over to Michael and a discussion on our progress in operations during the quarter.
Matt Badylak: Now turning it over to Michael and a discussion on our progress in operations during the quarter. Slide six, please.
Speaker #3: Slide six, please.
Speaker #4: Thank you, Matt, and good morning, everyone. As Matt just highlighted, we saw positive momentum in the second quarter of the year. We focused on operational safety and rolled out several safety campaigns to increase awareness around key areas that impacted previous quarters, such as hand injury prevention, fatigue management, and energy isolation with our staff and our business partners.
Michael Cardinaels: Thank you, Matt, and good morning, everyone. As Matt just highlighted, we saw positive momentum in the second quarter of the year. We focused on operational safety and rolled out several safety campaigns to increase awareness around key areas that impacted previous quarters, such as hand injury prevention, fatigue management, and energy isolation with our staff and our business partners. I am happy to report there were no recordable injuries during the quarter, and our lost time injury and total recordable injury frequency rates both improved to 0.42 and 0.97 respectively per million hours worked. Looking at our mining performance during the quarter, we continued to see strong production performance at the Abore (Bull Ray) deposit with an 18% increase in ore mined versus Q1, extracting 0.8 million tons.
Speaker #4: I'm happy to report there were no recordable injuries during the quarter. And our lost-time injury and total recordable injury frequency rates both improved to 0.42 and 0.97 respectively per million hours worked.
Speaker #4: Looking at our mining performance during the quarter, we continued to see strong production performance at the Bull Rate pit, with an 18% increase in all mined versus Q1, extracting 0.8 million tons.
Speaker #4: And a SARSI continued steady production, also producing half a million tons of ore, which enabled us to execute on our plan to feed a blend of fresh bull rate ore and softer SARSI ores.
Michael Cardinaels: Assasi continued steady production, also producing 0.5 million tons of ore, which enabled us to execute on our plan to feed a blend of fresher Abore (Bull Ray) ore and softer Assasi ores. The forecast for the second half of the year continues to be on track to deliver more ore tons than the first half of the year. Enkran waste stripping continued and benefited from a full quarter's production, increasing 113% compared to Q1. The mining contractor is also mobilizing additional fleet, and we expect to see further increases in volumes in the second half of the year. On to slide seven, please. On the processing performance, we also saw some positive momentum in the plant, with an increase in the number of tons treated on the back of improved plant availability and an increase in overall recovery, which contributed to a quarter-on-quarter increase in gold produced and sold.
Speaker #4: The forecast for the second half of the year continues to be on track to deliver more ore tons than the first half of the year.
Speaker #4: Encran waste stripping continued and benefited, pardon me, from a full quarter's production, increasing 113% compared to Q1. The mining contractor is also mobilizing additional fleet, and we expect to see further increases in volumes in the second half of the year.
Speaker #4: Onto slide seven, please. On the processing performance, we also saw some positive momentum in the plant, with an increase in the number of tons treated on the back of improved plant availability and an increase in overall recovery.
Speaker #4: Which contributed to a quarter-on-quarter increase in gold produced and sold. We sold just over 29,000 ounces and produced just over 30,000 ounces for the quarter.
Michael Cardinaels: We sold just over 29,000 ounces and produced just over 30,000 ounces for the quarter. Following the encouraging performance in Q2 and the installation of the secondary crusher, we are maintaining production guidance towards the lower end of the range that was outlined at the start of the year between 130,000 and 150,000 ounces. Another key project completed during Q2 was the installation and commissioning of the new carbon regeneration kiln, which we expect to deliver long-term economic and operational benefits to the milling circuit. On to slide eight, please. Continuing on with projects, I would like to give an update on the secondary crusher.
Speaker #4: Following the encouraging performance in Q2, and the installation of the secondary crusher, we are maintaining production guidance towards the lower end of the range that was outlined at the start of the year between 130 and 150,000 ounces.
Speaker #4: Another key project completed during Q2 was the installation and commissioning of the new carbon regeneration kiln, which we expect to deliver long-term economic and operational benefits to the milling circuit.
Speaker #4: Onto slide eight, please. Continuing on with projects, I'd like to give an update on the secondary crusher. As we have previously communicated, the hardness of Bull Rate ore was a limiting factor to our mill throughput.
Michael Cardinaels: As we have previously communicated, the hardness of Abore ore was a limiting factor to our mill throughput, and the installation of the secondary crusher is critical in achieving a material feed size that will enable us to process harder ore and reach design throughput of 5.8 million tons per annum. I am extremely happy to report that the crusher was brought online at the end of July, on budget and without incurring any incidents or injuries. We are currently working to optimize the secondary crusher performance and will be completing several small upgrade projects during August, but we are very pleased with the initial performance. The delivery of this project marks a significant milestone for the AGM, and we expect to ramp up production in the latter part of the year as planned.
Speaker #4: The installation of the secondary crusher is critical in achieving a material feed size that will enable us to process harder ore and reach a design throughput of 5.8 million tons per annum.
Speaker #4: I'm extremely happy to report that the crusher was brought online at the end of July, on budget, and without incurring any incidents or injuries.
Speaker #4: We are currently working to optimize the secondary crusher performance and will be completing several small upgrade projects during August. We are very pleased with the initial performance.
Speaker #4: The delivery of this project marks a significant milestone for the AGM, and we expect to ramp up production in the latter part of the year as planned.
Speaker #4: And with that, I would like to turn it over to Matt Freeman to discuss the company's financial results. Slide nine, please.
Michael Cardinaels: With that, I would like to turn it over to Matthew Freeman to discuss the company's financial results. Slide nine, please.
Speaker #5: Thanks, Michael. Good morning, everyone. Here on slide nine, we've outlined some of the key financial metrics for the quarter. We recognized revenues of $97.3 million in the second quarter and an average realized price of $3,317 per ounce for the impact of hedges.
Matthew Freeman: Thanks, Michael. Good morning, everyone. Here on slide 9, we have outlined some of the key financial metrics for the quarter. We recognized revenues of $97.3 million in the second quarter and an average realized price of $3,317 per ounce for the impact of hedges. We owned income from mine operations of $37.2 million. Our net earnings continue to be negatively affected by the fair value adjustments to our hedge book following the run-up in gold prices. We still recorded a net income of $21.6 million, or $0.07 per share. Adjusted EBITDA was just under $40 million. We generated $35.8 million cash flows from operations and ended the period with a strong cash balance of approximately $115 million, and that included having paid a $6 million income tax installment to the Ghanaian Revenue Authority.
Speaker #5: We reported income from mine operations of $37.2 million. While net earnings continue to be negatively affected by the fair value adjustments to our hedge book following the run-up in gold prices, we still recorded net income of $21.6 million.
Speaker #5: Or $0.70 per share. Adjusted EBITDA was just under $40 million. We generated $35.8 million in cash flows from operations and ended the period with a strong cash balance of approximately $115 million.
Speaker #5: And that included having paid a $6 million income tax installment to the Ghanaian Revenue Authority. Given these strong cash flows, we intend to allocate additional capital to accelerating the waste strip at Encran. As Michael noted, we expect to see Encran mining volumes ramp up in the second half of the year, accordingly.
Matthew Freeman: Given these strong cash flows, we intend to allocate additional capital to accelerating the waste stripping at Enkran. As Michael Cardinaels noted, we expect to see Enkran mining volumes ramp up in the second half of the year accordingly. As production has increased substantially since Q1, we have also seen a meaningful reduction in AISC, and we expect this trend to continue as production rises in the second half of the year. We anticipate that AISC will trend towards the top end of production guidance, as we have mentioned previously, due to the production expectations following a slow start up to the year. We also want to reiterate that there continue to be factors outside of our control that were not envisaged when we set guidance that have impacted AISC.
Speaker #5: As production has increased substantially since Q1, we've also seen a meaningful reduction in ASIC, and we expect this trend to continue, as production rises in the second half of the year.
Speaker #5: We anticipate that ASIC will trend towards top-end production guidance, as we've mentioned previously, due to the production expectations following a slow start-up to the year.
Speaker #5: We also want to reiterate that there continue to be factors outside of our control that were not envisaged when we set guidance that have impacted ASIC.
Speaker #5: The effect of higher royalty costs, resulting from both high gold prices and the additional 2% growth in sustainability levy that the Ghanaian government levied from April, is expected to add a further $100 per ounce to ASIC at current spot prices.
Matthew Freeman: The effects of higher royalty costs resulting from both high gold prices and the additional 2% growth of sustainability levy that the Ghanaian government levied from April, these are expected to add a further $100 per ounce to AISC at current spot prices. Furthermore, during the second quarter, there was a sudden and unexpected appreciation of the Ghanaian CEE against the U.S. dollar, which will add additional pressure to AISC if sustained over the balance of the year, despite our overall cost structure still being predominantly U.S. dollar based. Moving to slide 10, notwithstanding these pressures on reported AISC, we continue to focus on the cost structure of the mine, and I am pleased to report that fixed operating costs, such as processing at GNA in aggregate, remain consistent with recent quarters.
Speaker #5: Furthermore, during the second quarter, there was a sudden and unexpected appreciation of the Ghanaian cedi against the U.S. dollar, which will add additional pressure to ASIC if sustained over the balance of the year.
Speaker #5: Despite our overall cost structure still being predominantly U.S. dollar-based. Moving to slide 10, notwithstanding these pressures on reported ASIC, we continue to focus on the cost structure of the mine and are pleased to report that fixed operating costs, such as processing and G&A, in aggregate remain consistent with recent quarters.
Speaker #5: Of note, processing costs per ton have reduced as throughput has improved quarter on quarter. Seeing a 10% decline in unit costs since Q1. And we expect further decreases on a unit basis as the full impact of the secondary crusher is realized in the second half of the year.
Matthew Freeman: Of note, processing costs per ton have reduced as throughput has improved quarter on quarter, seeing a 10% decline in unit costs since Q1. We expect further decreases on a unit basis as the full impact of the secondary crusher is realized in the second half of the year. Mining costs at our producing deposits, namely Abore (Bull Ray) in Assasi, remain consistent on a per ton mined basis and in line with the fixed unit rates per the mining contract. Although we expect to see mining rates marginally increase as we drive deeper into these deposits where ore distances increase, Enkran mining costs are also subject to fixed rate mining contracts. We expect to see unit costs decrease as volumes increase over the next 12 months as fixed management costs under this contract are shared over more tons.
Speaker #5: Mining costs are now producing deposits, namely a bull rate SARSI, which remain consistent on a per-ton mine basis and are in line with the fixed unit rates at the mining contract.
Speaker #5: Although we expect to see mining rates marginally increase as we drive deeper into these deposits, where ore distance is increased. Encran mining costs have also subject to a fixed rate mining contract, and we expect to see unit costs decrease as volumes increase over the next 12 months, a fixed management costs under this contract are shared over more tons.
Speaker #5: We also remain disciplined with capital allocation, only spending where critical, and with clear value line of clear line of sight to value creation. We're pleased that the secondary crusher project has come in on budget, and the largest project ongoing currently is raise eight at the tailings facility.
Matthew Freeman: We also remain disciplined with capital allocation, only spending where critical and with clear value line of sight to value creation. We are pleased that the secondary crusher project has come in on budget, and the largest project ongoing currently is ray base at the Taggings facility, which is expected to be completed in 2026. Overall, costs have been well managed, and we should see improvement in unit rates as the year progresses, now that the secondary crusher is online. We expect to process more tons and subsequently produce more ounces. This will generate higher operating margins and cash flows for the business. Slide 11. Our AISC trended down in Q2 as expected, such that the cash margins have improved dramatically with the run-up in gold prices.
Speaker #5: Which is expected to be completed in 2026. Overall, costs have been well managed, and we should see improvement in unit rates as the year progresses.
Speaker #5: Now that the secondary crusher is online, and we expect to process more tons and subsequently produce more ounces. This will generate higher operating margins and cash flows for the business.
Speaker #5: Slide 11. As our ASIC trended down in Q2 as expected, such that the cash margins have improved dramatically with the run-up in gold prices.
Speaker #5: This has meant that despite investment in development capital for the secondary crushing project, and stripping at Encran, as well as the tax installment, we continue to maintain a very strong balance sheet with approximately $115 million in cash and no debt.
Matthew Freeman: This has meant that despite investment in development capital for the secondary crushing project and stripping at Enkran and the tax installment, we continue to maintain a very strong balance sheet with approximately $115 million in cash and no debt. With that, I will turn it over to Chris Pettman to discuss the exciting drilling results we continue to see at Abore (Bull Ray).
Speaker #5: And with that, I'll turn it over to Chris to discuss the exciting drilling results we continue to see at a bull rate.
Speaker #6: Thanks, Matt. The bull rate was the primary focus of exploration efforts in Q2 and was the sole focus of our near-mine efforts, with the commencement of an expanded Phase Two infill drill program and the completion of the first deep drill test, which I will discuss shortly.
Chris Pettman: Thanks, Matt. Our Abore (Bull Ray) deposit was the primary focus of exploration efforts in Q2, and it was the sole focus of our near mine efforts, with the commencement of an expanded Phase 2 infill drill program and the completion of the first deep drill test, which I will discuss shortly. While we continue to have success in our near mine programs, we also continue to advance our regional generator program, with work progressing at the Entzeruma and Sky Gold B targets through the quarter. The IP survey at Sky Gold B was completed in June, and initial results suggest a new interpretation of the underlying geology, which will likely lead to new potential drill targets.
Speaker #6: While we continue to have success in our near-mine programs, we also continue to advance our regional generator program, with work progressing at the Ensaroma and Sky Gold B targets throughout the quarter.
Speaker #6: The IPE survey at Sky Gold was completed in June, and initial results suggest a new interpretation of the underlying geology, which will likely lead to new potential drill targets.
Speaker #6: Q2 prospecting activities along the Encran shear at the Ensaroma target area, located southwest of Encran, returned multiple high-grade quartz vein grab samples within the initial five-kilometer-long gold soil anomaly, further highlighting the prospectivity of the area.
Chris Pettman: Q2 prospecting activities along the Enkran shear at the Entzeruma target area, which is located southwest of Enkran, returned multiple high-grade quartz vein grab samples within the initial 5-kilometer-long golden soil anomaly, further highlighting the prospectivity of the area. An IP survey is currently underway and will be used for final refinement of drill targets planned for testing in the second half of this year. The Phase 2 infill drilling at Abore (Bull Ray) deposit began in early Q2 and is the immediate follow-up to the positive results of the first phase of drilling completed and announced in Q1 of this year. As a reminder, Phase 1 drilling was focused largely on testing for continuations of mineralization immediately below the mineral reserve and resource at the southern end of the deposit and returned significant results, some of the highlights of which are listed at the bottom of this slide.
Speaker #6: An IPE survey is currently underway and will be used for the final refinement of drill targets, planned for testing in the second half of this year.
Speaker #6: The phase two infill drilling at a bull rate began in early Q2 and is the immediate follow-up to the positive results of the first phase of drilling, completed and announced in Q1 of this year.
Speaker #6: As a reminder, Phase One drilling was focused largely on testing for continuations of mineralization immediately below the mineral reserve and resource at the southern end of the deposit.
Speaker #6: And returned significant results, some of the highlights of which are listed at the bottom of this slide. Phase Two has been expanded to cover approximately 1.5 kilometers of strike length, extending to the northern end of a bull rate.
Chris Pettman: Phase 2 has been expanded to cover approximately 1.5 kilometers of strike length, extending to the northern end of Abore (Bull Ray) deposit. Next slide, please. This image shows the priority target areas of the Phase 2 infill drilling currently underway on a long section of Abore (Bull Ray) deposit that showed the existing drilling, including that from Q1 infill Phase 1 holes. Current drilling is focused on testing for the presence of potential north plunging low angle ore chutes across the entire strike length of the deposit, as well as possible south plunging conjugate structures carrying mineralization, as well as to determine the potential for open pit reserve and resource expansions. Drilling has progressed under budget and ahead of schedule, with the majority of the planned 8,900 meters over 35 holes now complete, and we expect to be in a position to release results in the coming weeks.
Speaker #6: Next slide, please. This image shows the priority target areas of the phase two infill drilling currently underway on a long section of a bull rate that showed the existing drilling, including that from Q1 infill phase one holes.
Speaker #6: Current drilling is focused on testing for the presence of potential north-plunging low-angle ore chutes across the entire strike length of the deposit, as well as possible south-plunging conjugate structures carrying mineralization.
Speaker #6: As well as to determine the potential for open-pit reserve and resource expansions. Drilling has progressed under budget and ahead of schedule, with the majority of the planned 8,900 meters over 35 holes now complete, and we expect to be in a position to release results in the coming weeks.
Speaker #6: Slide 14. As discussed in our July press release, the primary objective of the deep drilling completed in Q2 was to test for continuations of the bull rate mineralizing system well below the current mineral resource and prove it is carrying grades and widths that could support an underground bulk mining operation.
Chris Pettman: Slide 14. As discussed in our July press release, the primary objective of the deep drilling completed in Q2 was to test for continuations of the Abore (Bull Ray) mineralizing system well below the current mineral resource and prove it is carrying grades and widths that could support an underground bulk mining operation. In this, we were successful as all four drill holes intersected significant widths of mineralized granite, with three of them returning significant assay results, including as Matt Badylak has already mentioned, 36 meters at 2.5 grams a ton, but also 16 meters at 3.1 grams per ton gold and 18 meters at 1.9 grams per ton. The system remains open in all directions at depth and is the first proof of concept for an eventual transition to an underground mining at Abore (Bull Ray).
Speaker #6: In this, we were successful, as all four drill holes intersected significant widths of mineralized granite, with three of them returning significant assay results, including, as Matt has already mentioned, 36 meters at 2.5 grams per ton, but also 16 meters at 3.1 grams per ton gold and 18 meters at 1.9 grams per ton.
Speaker #6: The system remains open in all directions at depth and is the first proof of concept for an eventual transition to an underground mining at a bull rate.
Speaker #6: Results from this work will be integrated with the assays being received from the current Phase Two infill drilling at shallower depths to determine the next steps for further drill testing, which may result in additional open pit expansions.
Chris Pettman: The results from this work will be integrated with the assays being received from the current phase two infill drilling at shallower depths to determine the next steps for further drill testing, which may result in additional open pit expansions. Next slide. This is a planned map showing the wide spacing of the four deep drill holes across approximately 1.2 kilometers of the total 1.8 kilometers strike of Abore (Bull Ray) and demonstrates how we really have only just begun to test the full strike extent of deeper mineralization. Next. Here we show an image of a long section through Abore (Bull Ray) with gram meter contours for existing drilling as well as the four new deep holes.
Speaker #6: Next slide. This is the planned map showing the wide spacing of the four deep drill holes across approximately 1.2 kilometers of the total 1.8 kilometers strike of a bull rate.
Speaker #6: And demonstrates how we really have only just begun to test the full strike extent of deeper mineralization. Next. Here we show an image of a long section through a bull rate with gram-meter contours for existing drilling as well as the four new deep holes.
Speaker #6: This provides a visualization of how these holes really just were really just our initial probe of the mineralizing system below the mineral resource. And how there is significant room for additional drill at depth.
Chris Pettman: This provides a visualization of how these holes really were just our initial probe of the mineralizing system below the mineral resource and how there is significant room for additional growth at depth. Slide 17. The next two images I will show are taken from the July press release. This first image shows hole 350, which intersected 36 meters at 2.49 grams per ton gold, approximately 90 meters below the mineral reserve at Abore (Bull Ray) main pit. Seeing these widths and grades in our first pass testing of these deeper zones is a major success of the program, and it confirms that the system does carry mineralization that could support a potential bulk underground mining operation. It is also important to note that grades are significantly better than those currently modeled in the bottom of the inferred portion of the mineral resource as this cross-section shows.
Speaker #6: Slide 17. The next two images I'll show are taken from the July press release. This first image shows hole 350, which intersected 36 meters at 2.49 grams per ton gold, approximately 90 meters below the mineral reserve at the Bull Rate main pit.
Speaker #6: Seeing these widths and grades in our first pass testing of these deeper zones is a major success of the program. And it confirms that the system does carry mineralization that could support a potential bulk underground mining operation.
Speaker #6: It's also important to note that the grades are significantly better than those currently modeled in the bottom of the inferred portion of the mineral resource at this cross-section shows.
Speaker #6: Next, the final image I'll show today is a cross-section through the northern end of a bull rate. In this area, our deep test intersected the bull rate granite approximately 200 meters below the current reserve, again with very good width and grade.
Chris Pettman: The final image I will show today is a cross-section through the northern end of Abore (Bull Ray). In this area, our deep test intersected the Abore (Bull Ray) deposit granite, approximately 200 meters below the current reserve, again with very good width and grade. This image is one that shows how open the deposit remains for further drill testing and the scale of potential growth that we see at Abore (Bull Ray) deposit. We see Q2 as another successful one in the exploration space at the Asanko Gold Mine (AGM) as we continue to advance our growth opportunities in both the near mine and regional programs. We are well funded and supported by Matt Badylak and the board and expect to put forward additional drilling at Abore (Bull Ray) deposit in H2 to build on the continued successes we are seeing there. With that, back to you, Matt Badylak.
Speaker #6: This image shows how open the deposit remains for further drill testing and the scale of potential growth that we see at a bull rate.
Speaker #6: We see Q2 as another successful one in the exploration space at the AGM, as we continue to advance our growth opportunities in both the near mine and regional programs.
Speaker #6: We are well-funded and supported by Matt and the board and expect to put forward additional drilling at a bull rate in H2 to build on the continued successes we're seeing there.
Speaker #6: With that, back to you, Matt.
Speaker #3: Thank you, Chris. With the team building momentum and the secondary crusher now online, as we previously guided, we anticipate production will be stronger in the second half of the year.
Matt Badylak: Thank you, Chris. With the team building momentum and the secondary crusher now online, as we have previously guided, we anticipate production will be stronger in the second half of the year. Galiano Gold Inc. is well positioned as Ghana's largest single asset gold producer with compelling fundamentals across many key areas. We maintain a robust five-year production outlook with strong financial discipline, including a solid $115 million cash position while remaining debt-free. Our exploration program at Abore (Bull Ray) deposit is delivering results, and we continue to advance multiple greenfields exploration targets across our extensive land package. The waste stripping to access high-grade ore at the Enkran deposit is progressing ahead of schedule, and the mill throughput is expected to ramp up to 5.8 million tons per annum now that the crusher is commissioned.
Speaker #3: Galiano is well positioned as Ghana's largest single-asset gold producer, with compelling fundamentals across many key areas. We maintain a robust five-year production outlook with strong financial discipline, including a solid $115 million cash position, while remaining debt-free.
Speaker #3: Our exploration program at a bull rate is delivering results and we continue to advance multiple greenfields exploration targets across our extensive land package. The stripping to access high-grade ore at the Encran deposit is progressing ahead of schedule, and the mill throughput is expected to ramp up to 5.8 million tons per annum, now that the crusher is commissioned.
Speaker #3: Operating in Ghana provides us with a safe and stable jurisdiction with a mature regulatory framework under which we can execute our organic growth profile and drive value for our shareholders.
Matt Badylak: Operating in Ghana provides us with a safe and stable jurisdiction with a mature regulatory framework under which we can execute our organic growth profile and drive value for our shareholders. I will highlight that our current market valuation is less than 40% of analyst consensus net asset value. With the Asanko Gold Mine highly leveraged the gold price, a robust organic growth profile, and record high gold prices, the potential for value creation as we continue to build on our current momentum remains high. With that, I will turn it back to the operator and open it up for any questions. Thank you.
Speaker #3: I will highlight that our current market valuation is less than 40% of analysts' consensus net asset value. With the AGM highly leveraged to the gold price, a robust organic growth profile, and record high gold prices, the potential for value creation, as we continue to build on our current momentum, remains high.
Speaker #3: With that, I'll turn it back to the operator and open it up for any questions. Thank you.
Speaker #2: Thank you, ladies and gentlemen. We will now begin the question and answer session. If you have a question, please press the star followed by the one you touched on phone.
Jenny: Thank you, ladies and gentlemen. We will now begin the question and answer session. If you have a question, please press the star followed by the one on your touchdown phone. Should you wish to cancel your request, please press the star followed by the two. If you are using a speaker phone, please lift the handset before pressing any keys. Once again, that is star one should you wish to ask a question. Your first question is from Heiko Illa from HC Wainwright. Your line is now open.
Speaker #2: Request, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. Once again, that is star one.
Speaker #2: Should you wish to ask a question? Your first question is from Haikal Ela from HC Wainwright. Your line is now open.
Speaker #7: Hey there. Thanks for taking my questions.
Speaker 9: Hey, thanks for taking my questions.
Speaker #3: Thanks, Haikal. I appreciate you joining the call.
Matt Badylak: Thanks, Heiko. Appreciate you joining the call.
Speaker #7: Always and gladly. Hey, so your capitalized development pre-stripping costs at Encran were $6.9 million during Q2, just over $10 million year-to-date. Any idea what we should expect to model out for just pre-stripping for the remainder of the year?
Speaker 9: Always and gladly. Your capitalized development pre-stripping costs at Enkran were $6.9 million during Q2, just over $10 million year to date. Any idea what we should expect to model out for pre-stripping for the remainder of the year?
Speaker #7: Just in general?
Speaker #3: Hi, Haikal. It's Matt here. Yeah, I think assuming, like Mick and I have said, we're going to be accelerating Encran through the second half of the year. It's...
Matt Badylak: Hi, Heiko. It's Matt here. I think, as Mick and I have said, we are going to be accelerating Enkran through the second half of the year. It's not going to be too dramatic. Obviously, we have to mobilize equipment strategically and stage through the balance of the year. So a modest increase in Q3 and then a little bit more gain in Q4 would be the way I would look at it. So stepping up a bit from the 6.9 we had this quarter into next quarter and then a little bit more gain in the following quarter. But we are not talking like stripping or anything like that.
Speaker #3: not going to be too dramatic. Obviously, we have to get mobilized equipment sort of strategically and staged through the balance of the year. So a modest increase in Q3 and then a little bit more gain in Should you wish to cancel your Q4 would be the way I'd look at it.
Speaker #3: So, stepping up a bit from the 6.9 we had this quarter into next quarter, and then a little bit more gain in the following quarter.
Speaker #3: But you're not, we're not talking like that or anything like that.
Speaker #7: Got it. But a trend line would be too conservative, so do take it up a notch.
Speaker 9: The trend line would be too conservative, so do take it up a notch.
Speaker #3: Yeah.
Matt Badylak: Yeah.
Speaker #7: Okay, perfect. Yeah, because we didn't have it like that before. Okay, awesome. And then, just conceptually, I mean, your balance sheet keeps improving. You're at almost $150 million, $115 million of cash, gold at $3,340.
Speaker 9: Okay, perfect. Yeah, because we didn't have it like that before. Okay, awesome. Just conceptually, your balance sheet keeps improving. You are at almost $150 million, $115 million of cash. Gold is at $3,340. I get that mining has things go wrong all the time. You need a cushion. At what point is, for lack of a better word, it enough? When can you start distributing some money to your shareholders? Once that comes, what is your preferred way to do it?
Speaker #7: I mean, I get that mining has things go wrong all the time and needs a cushion, but I mean, at what point is— for lack of a better word— is it enough?
Speaker #7: And when can you start distributing some money to your shareholders? And once that comes, what's your preferred way to do it?
Speaker #3: Yeah, Haikal, thanks for that question. I mean, listen, I think we're very cognizant of the fact that we're building cash at the moment, but I'll also highlight that we're in a quite intensive capital allocation period towards Encran, right?
Matt Badylak: Yeah, Heiko, thanks for that question. I mean, listen, I think we are very cognizant of the fact that we are building cash at the moment, but we are also, I will highlight that we are also in a quite intensive capital allocation period towards Enkran, right? As we mentioned, we do want to, and we see significant value in accelerating that program, cash committing. I think that that in itself is going to yield significant value for our shareholders as we start to release material improvements in gray once we get into the ore from Enkran. So that is really our priority at the moment. Certainly, as we do that and as cash becomes more accessible, we will have a look at other options in terms of returning value to shareholders.
Speaker #3: And, as we mentioned, we do want to, and we see a significant value in accelerating that program, cash permitting. I think that, in itself, is going to yield significant value for our shareholders as we start to release material improvements in grade once we get into the ore from Encran.
Speaker #3: So that's really our priority at the moment. Certainly, as we do that and as cash becomes more accessible, we'll have a look at other options in terms of returning value to shareholders.
Speaker #3: But our primary focus still remains on the reinvestment of capital into the asset itself, particularly while we're still stripping Encran.
Matt Badylak: Our primary focus still remains reinvestment of capital into the asset itself, particularly while we are still stripping Enkran.
Speaker #7: Right. No, I fully agree that it should be your primary use of cash. I mean, you know how we feel about growth at a company.
Speaker 9: Right. No, I fully agree that it should be your primary use of cash. I mean, you know how we feel about growth of the company. All right, I will get back in queue. Thanks so much for taking my questions, and good job in the quarter.
Speaker #7: I'll get back in queue. Thanks so much for taking my questions, and good job in the quarter.
Speaker #3: Thank you, Haikal.
Matt Badylak: Thank you, Heiko.
Speaker #2: Thank you. Once again, that is star one. Should you wish to ask a question? And your next question is from Raj Ray from BMO Capital Markets.
Jenny: Thank you. Once again, that is star one should you wish to ask a question. Your next question is from Rajwei from BMO Capital Markets. Your line is now open.
Speaker #2: Your line is now open.
Speaker #8: Thank you, operator. Good morning, Matt and team. I've got a couple of questions. First one, from Michael. Michael, I don't know if you already spoke; my apologies if you did. But you did say that in the presentation I was looking at, with respect to the commissioning of the secondary crusher and the modifications required for the downstream equipment, can you highlight what kind of modifications and when?
Speaker 9: Thank you, operator. Good morning, Matt and team. I have a couple of questions. The first one is for Michael. Michael, I do not know if you already spoke to this. My apologies if you did, but you did say in the presentation that I was looking at with respect to the commissioning of the secondary crusher, there are some modifications required for the downstream equipment. Can you highlight what kind of modifications and when? I know you said you are going to get to the steady state, but can we have some idea about timing? Is it towards the end of Q3 that you expect to be at steady state around that 5.8 MTPA? My second question is more for Matt. Matt, are we still expecting the non-sustaining CapEx of $60 million to $65 million for the year?
Speaker #8: I know you said you're going to get to the steady state, but can we have some idea about timing? Is it towards the end of Q3 that you expect to be at steady state?
Speaker #8: Around that time point in Q2, 8 MTPA? And then I have a second question for Matt. Matt, are we still expecting the non-sustaining CapEx to be $60 million to $65 million for the year?
Speaker #8: And the second part to that is, how should we look at modeling the sustaining part of the, call it the deferred strip, for the second half?
Speaker 9: The second part of that is, how should we look at modeling the sustaining part of the, call it the deferred strip for the second half? That is it. Thank you.
Speaker #8: That's it. Thank you.
Speaker #4: Thanks, Raj. Oh, I'll start here. Some of the upgrade projects that we're looking at involve primarily the drives for our conveyors. We are increasing the speeds of the overland conveyor to now be able to accelerate the throughput off the back of better production out of the secondary crusher.
Speaker 10: Thanks, Raj. I will start here. Some of the upgrade projects that we are looking at are involving primarily the drives for our conveyors. So we are increasing speeds of the overland conveyor to now be able to accelerate the throughput off the back of better production out of the secondary crusher. We are also looking at optimizing the settings on our primary crusher, and we have got a number of options to look at for our vibrating screen, which feeds the secondary crusher. So we are looking at screen aperture sizing to optimize the feed to the secondary as well as total throughput. We expect that to yield some benefits. We also have to do some modifications to the discharge grate size in the sag mill. We expect to have a lot of these modifications completed by the end of Q3.
Speaker #4: We're also looking at optimizing the settings on our primary crusher, and we've got a number of options to look at for our vibrating screen, which feeds the secondary crusher.
Speaker #4: So we're looking at screen aperture sizing to optimize the feed to the secondary as well as total throughput. We expect that to yield some benefits.
Speaker #4: We also have to do some modifications to the discharge grate size in the SAG mill, so we expect to have a lot of these modifications completed by the end of Q3.
Speaker #8: Okay, that's good. Thank you.
Speaker 9: Okay, that is good. Thank you.
Speaker #3: Hi, Raj. It's Matt here. On the other questions you've got, from a development capital standpoint, I think the main components of that this year were the Encran strip and then the secondary crushing upgrades.
Matt Badylak: Hi, Raj. It's Matt here on the other questions you've got. From a development capital standpoint, I think the main components of that this year was the Enkran strip and then the secondary crusher upgrades. Obviously, the majority of secondary crusher upgrades, the costs were incurred in H1. There will be some of those that will be lagging through into the first part of Q3. We have commissioned that now in July, so the lion's share of costs have been spent then. You can extrapolate a little bit more on the crushing circuit in H2. Enkran, as we mentioned to Heiko on the last question, we are going to see that increase through the balance of the year over and above what we the 7 million roughly that we did in Q3.
Speaker #3: So obviously, the majority of the secondary crushing upgrades costs were incurred in H1. Obviously, there will be some of those that will be lagging through into the first part of Q3, sorry.
Speaker #3: Obviously, we've commissioned that now in July, so the lion's share of costs have been spent then. So you can extrapolate a little bit more on the crushing circuit in H2.
Speaker #3: Encran, as we mentioned to Haikal on the last question, we're going to see that increase through the balance of the year, over and above the roughly $7 million that we did in Q3.
Speaker #3: So you'll kind of need to extrapolate that through. They're the main pieces. There's some other work on some of the project development costs that we haven't, in terms of looking at sort of village relocations and things, some of the early works on that that get picked up.
Matt Badylak: You will kind of need to extrapolate that through. They are the main pieces. There is some other work on some of the project development costs that we have in terms of looking at village relocations and things, some of the early works on that that will get picked up, but they are not particularly material in this year. I am not sure we will quite get to the fully guided amount this year. We will probably be a little bit shy of that, but we are kind of maintaining that guidance as we see. A lot of it is going to depend on how quickly we can mobilize equipment in Enkran and how comfortable we are with the acceleration there. It is a little bit of a soft answer, I know, but they are the main buckets, and we should not expect anything else material.
Speaker #3: But they're not particularly material in this year. So I'm not sure we'll I'm not sure we'll quite get to the fully the fully guided amount this year.
Speaker #3: We'll probably be a little bit shy of that, but we're kind of maintaining that guidance as we see a lot of it's going to depend on how quickly we can mobilize equipment at Encran and how comfortable we are with the acceleration there.
Speaker #3: So it's a little bit of a soft answer, I know, but they're the main buckets, and we shouldn't expect anything else material.
Speaker #8: Okay, that's helpful, Matt. And then on the sustaining part of the deferred strip?
Speaker 9: Okay, that is helpful, Matt. Then on the sustaining part of the deferred strip?
Speaker #3: Yeah, again, that's always a tricky one to guide to, as you know, because we're looking at different phases of different pits, and the way they're counting works on that.
Matt Badylak: Yeah, again, that is always a tricky one to guide to, as you know, because we are looking at different phases of different pits and the way the county works on that. But ostensibly, I would say that we are getting towards a more steady state mine plan with respect to Abore. So I think you can probably extrapolate what we have seen in Q2 moving forward from the next level while the strip rate is starting to come to be more consistent at both Abore and Asanko, although Abore is going to be the focus of the second half of the year. So I think you can kind of intimate that fairly well from what we have seen in the last quarter, if that helps.
Speaker #3: But ostensibly, I'd say that we're getting towards a more steady-state mine plan with respect to a bull rate. So I think you can probably extrapolate what we've seen in Q2 moving forward for the next little while.
Speaker #3: The strip rate is starting to become more consistent at both a bull rate and a SARSI, although a bull rate is going to be the focus of the second half of the year.
Speaker #3: So I think you can kind of intimate that fairly well from what we've seen in the last quarter. If that helps.
Speaker #8: Okay, that's great. Okay, that's helpful. Okay, thank you. That's it from me.
Speaker 9: Okay, that's great. Okay, that's helpful. Okay, thank you. That's it from me.
Speaker #2: Thank you. There are no further questions at this time. Please proceed with the closing remarks.
Jenny: Thank you. There are no further questions at this time. Please proceed with the closing remarks.
Speaker #3: Thank you, Jenny. I appreciate you moderating the call today, and I appreciate everyone dialing in and asking your questions. I wish you all a good day.
Matt Badylak: Thank you, Jenny. I appreciate you moderating the call today, and I appreciate everyone dialing in and asking your questions. I wish you all a good day. Thank you.
Speaker #3: Thank you.
Jenny: Thank you, ladies and gentlemen. The conference has now ended. Thank you all for joining. You may all disconnect your lines.