Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gold production increased by 13% this quarter, reaching nearly 30,000 ounces.
- Galiano Gold Inc (GAU, Financial) maintains a strong liquidity position with approximately $121 million in cash and no debt.
- Significant progress was made on the life of mine optimization and planning to restart the Nkran pit.
- The company has expanded the Abore reserves by 45%, allowing for improved mining practices.
- Health and safety performance was strong, with no loss time injuries reported this quarter.
Negative Points
- Crushing limitations impacted mill throughput, resulting in a 13% decrease in total tons processed compared to Q2.
- All-in sustaining costs remain elevated due to high strip ratios at the Abore deposit.
- The company faces ongoing challenges with crusher constraints, impacting throughput.
- Exploration results were quieter this quarter, with drilling still in progress.
- Unrealized losses on gold hedge instruments were reported, reflecting exposure to fluctuating gold prices.
Q & A Highlights
Q: At what point in the gold price does something currently considered waste become ore, and do you have the capacity to take advantage if gold prices keep rising?
A: Matt Badylak, President & CEO, explained that the company is in a favorable position with gold prices at all-time highs. They are updating their life of mine plan, which will consider current gold prices. The team is closely examining potential improvements to mineral reserves and resources, with updates expected in early Q1 2025.
Q: What should we be modeling for transportation costs and throughput for Q4 and 2025?
A: Matt Freeman, CFO, noted that transportation costs have decreased due to a higher percentage of material from the Abore pit, which is closer than previous sources. He expects transportation costs to remain similar in the next 12 months, with potential marginal gains from operational improvements. Throughput is expected to improve slightly in Q4, with more significant gains anticipated once the secondary crusher is operational in 2025.
Q: Can you provide guidance on throughput improvements with the mobile crushers and the expected ore grade for the next 12 months?
A: Matt Badylak, President & CEO, indicated that Q3 marked a low point for throughput, with improvements expected in Q4 due to optimizations in blasting and crushing. For 2025, throughput is expected to be at the lower end of 5 million tons per annum. The ore grade will be biased lower in 2025, with higher grades expected in 2026 due to high-grade intercepts at the base of the Abore deposit.
Q: Could you elaborate on the unrealized losses on the gold hedge instrument and Galiano's exposure to future gold prices?
A: Matt Freeman, CFO, explained that the company has a modest hedging program through 2026 as a risk management exercise. The unrealized losses are due to the current high gold prices, but the exposure is limited to about $10 million if prices remain around $2,700 per ounce. The company benefits overall from the high gold prices.
Q: How is the reconciliation going with your model, and should we use the Abore reserve grade for modeling the next 12 months?
A: Matt Badylak, President & CEO, stated that reconciliation is satisfactory, with reliance on diamond drill holes for accuracy. The ore grade for 2025 will be lower than the average reserve grade due to high-grade zones expected in 2026.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
