Galiano Gold Inc. has provided its first quarter operating and financial results for the Company and the Asanko Gold Mine , located in Ghana, West Africa.
Galiano’s Asanko Gold Mine is a 50:50 joint venture with Gold Fields Limited which is managed and operated by Galiano.
The AGM produced 32,678 ounces of gold during Q1 2023, as the processing plant achieved milling throughput of 1.6 Mt of ore at a grade of 0.9 g/t with metallurgical recovery averaging 73%. Recovery was lower than prior periods due mainly to processing of lower grade stockpiles and was in line with expectations.
They sold 35,174 ounces of gold in Q1 2023 at an average realized gold price of $1,850/oz for total revenue of $65.2 million (including $0.1 million of by-product silver revenue), a decrease of $12.3 million from Q1 2022. The decrease in revenue quarter-on-quarter was primarily a function of a 16% reduction in sales volumes relative to Q1 2022.
Also, Total cost of sales (including depreciation and depletion and royalties) amounted to $40.5 million in Q1 2023, a decrease of $26.4 million from Q1 2022.
The decrease in cost of sales was primarily due to 16% fewer gold ounces sold, lower mining contractor costs and processing ore that had no carrying value for accounting purposes. Labour costs were also lower in Q1 2023 resulting from the restructuring of the AGM’s workforce completed at the end of Q1 2022 ($4.5 million decrease).
These factors were partly offset by inflationary pressures on key reagents and other consumables. Depreciation and depletion expense was also $7.6 million lower in Q1 2023 relative to Q1 2022, due mainly to fewer gold ounces sold, lower depreciation on mining related assets resulting from the temporary cessation of mining at the end of Q2 2022, processing existing stockpiles that had no carrying value for accounting purposes, and lower depreciation on capitalized leases.
These factors were partly offset by the impact on depreciation caused by the $63.2 million impairment reversal on MPP&E recorded at December 31, 2022.
On safety, the company on February 6, 2023, the Company reported that two contractors had been fatally injured following an incident near the tailings storage facility (“TSF”). The Company has taken actions to further reinforce the Company’s sustained commitment to Zero Harm and industry best practices in safety culture.
“The first quarter marked multiple milestones for Galiano,” stated Matt Badylak, Galiano’s President and Chief Executive Officer, “We reinstated Mineral Reserves with the updated 2023 AGM Technical Report, demonstrating an improved eight-year mine life, with annual production averaging 217,000 ounces of gold per year at all-in sustaining costs of $1,143 per ounce. Significant optimization opportunities have been identified and an aggressive exploration program is underway on the large, highly prospective land package. During the quarter, we continued to generate significant cash flows through stockpile processing, further strengthening the AGM’s balance sheet to move forward with the revised life of mine plan. At the corporate level, we closed the quarter with over $56 million in cash, no debt, and remain in an enviable position to further grow the Company.
Looking ahead, we have improved 2023 cost guidance, reducing all-in sustaining costs from over $1,900 per ounce to between $1,650 to $1,750 per ounce. We continue to focus on the plan to re-commence hard rock mining during the fourth quarter of 2023, while working to strengthen safety awareness across site to achieve our goal of Zero Harm at the Asanko Gold Mine.”
