Good morning. My name is Liudy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Galiano Gold Inc. 2025 Guidance, Mineral Resource/Mineral Reserve Update, and 5-Year Outlook 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 followed by the number one on your telephone keypad. If you would like to withdraw your question, you may press Star followed by the number two. Thank you. 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 2025 guidance, updated mineral reserve and resources, and 5-year outlook for the Asanko Gold Mine that we released last night. Here on slide 2, 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 2025 guidance and 5-year outlook, which should be read in conjunction with our 2022 technical report for the Asanko Gold Mine, available on our website and filed on SEDAR+ and EDGAR. Also, please bear in mind that all dollar amounts mentioned on the conference call are in U.S. dollars unless otherwise stated.
Please note that I'm discussing Galiano's outlook for the Asanko Gold Mine on a 100% basis. Moving to slide 4. With me on the call today, I have Michael Cardinaels, our Chief Operating Officer, and Chris Pettman, our Vice President, Exploration. I also have Matt Freeman, our Chief Financial Officer, available for the Q&A portion of the call. For this presentation, I'll initially go through a few introductory slides. Michael will review the operational guidance, Chris will discuss the exploration program for 2025, and I'll provide some closing remarks and open the call for Q&A. Here on slide 5, this is not to remind you that we are located in Ghana, but rather to highlight that the country recently went through its democratic election process.
His Excellency, President John Mahama, took office in early January in another peaceful transition of power and is currently in the process of making his ministerial appointments. At its core, Mahama's mining policy emphasizes responsible resource management, community engagement, and protection of ecosystems. We are confident that Ghana will continue to remain a leading pro-mining and premier investment country in West Africa, and our team looks forward to continuing our partnership in supporting Ghana's mining sector. Here on slide 6, I'd like to remind you that we have a fully established and fully permitted operating mine. The Asanko Gold Mine has been in operation since 2016, and all infrastructure is in place to deliver on our plans. The news released last night provides clarity on how we view our mining sequence, ramp-up of production, and corresponding reduction in all- in sustaining cash costs over the next five years.
It includes the commencement of the strip at Nkran, scheduled to begin mid-year. As you know, Nkran is a key component of our life of mine, and multiple options were considered on how best to schedule and mine this deposit. Following his appointment in September, Michael was intimately involved in this process, and I will now allow him to walk you through this in the coming slides. Over to you, Michael.
Thank you, Matt, and good morning, everyone. I'd like to provide some information around our updated optimized mine plan. After significant review and work, the team has developed a plan that will allow us to mine three pits: Abore, Esaase, and Nkran over the next five years, providing stability to the operation. Our mining contract in place for Abore also includes Esaase mining rates and will enable us to move fleet from Abore to Esaase and begin the next phase of mining for that pit with relative ease. Esaase is one of our lowest strip ratio pits, and the cutback will allow us to access ore quickly. Operating across Abore and Esaase gives us flexibility with our ore supply for the mill, and the softer Esaase ore will provide increased throughput performance, especially in the first half of the year until the secondary crusher is commissioned.
The pit design for Nkran has been developed to mitigate geotechnical and operational risks while maximizing the recovery of the resource. The schedule has been timed to fit in the LOM such that we generate cash, gives us stability, flexibility, and ties in with the strategy around stockpile generation, ore supply management, and satellite deposit development. The current strong gold price means that we generate sufficient free cash flow to support the Nkran strip, which we envisage will be started by mid-year 2025, as we're in the final stages of discussions with the preferred contractor, and we expect a contract to be executed in the near future. On slide eight, 2025 guidance and five-year outlook for the AGM.
As previously mentioned, the secondary crusher is due for commissioning in Q3 this year, and while we are crusher constrained, we are looking at ways to increase our throughput to maximize our production, including optimizing the feed blend between Abore and Esaase materials. As mining progresses in both pits, we see slightly higher grade at depth towards the end of the year. We are providing guidance for 2025 production ounces between 130,000 and 150,000. Once throughput increases to an annual rate of 5.8 million tons per annum, production will increase to north of 200,000 ounces per year starting from 2026. Processing costs average $11.30 per ton milled over the five-year period, and as higher grade ore becomes available from Nkran towards the five-year mark, we see another increase in annual production to between 230,000 and 260,000 ounces. Sustaining capital for 2025 is approximately $15 million.
The bulk of this spend is attributed to the TSF Stage 8 construction slated to begin in 2025, as we have access to significant waste material in close proximity to the TSF to support the build coming from the Nkran pit. Mining costs averaged over the five-year period equate to $3.34 a ton mined, with an average ore haulage cost of $4.44 a ton hauled. All-in sustaining costs for 2025 will be in the range of $1,750-$1,950, and as we increase production over the next five years, we expect to see a significant reduction in the AISC on the back of the additional ounces. Development capital for 2025 is approximately $60-$65 million, which includes the half-year of Nkran stripping and then subsequently increases from 2026 as Nkran mining ramps up and is in production for the full year.
Now I'll pass over to Chris to discuss the exploration plan. Chris.
Great. Thanks, Michael. And good morning, everyone. So for the next two slides, 9 and 10, I'll give some brief highlights of the 2025 exploration plan that's going to build on the successes we saw in 2024 in both the near mine and the regional greenfield spaces. So in 2024, we saw an increase in the mineral reserves at Abore of approximately 151,000 ounces, which is a great outcome for us, but we still see opportunities for further growth at Abore. In 2025, drilling there is designed to test for further open pit resource and reserve growth, with a focus primarily on the southern end of the deposit in and around the high-grade zone that we saw discovered in 2023, where we see opportunities for more growth inside that economic shell.
So now, importantly, Abore remains open at depth along the entirety of its 1.3 kilometers of strike, making it an important target for us from an underground potential perspective. As part of the 2025 drilling program, we'll be testing for continuity of mineralization below the known resource across the entirety of the deposits. We're very excited to see what comes of that. Along with the Abore drilling, the teams also developed several high-priority drill targets that are located on the immediate Nkran Shear that sit between the known deposits that are high priority for us, and we'll test them this year as well. Now, in the greenfield space, we have several really exciting targets that we'll be following up on this year.
Firstly, at Skye Gold, which we've talked a lot about in the past, 2024 saw our first pass drilling identify a new regional-scale shear zone, which trends in the same orientation as all of those other shear zones that host all of the AGM deposits. So the drilling we did was conducted on wide 400-meter space fences, and we intercepted shear quartz vein-hosted gold mineralization across approximately 4 kilometers of strike length. Now, given the scale of this target area, we're really encouraged by these first results, and a follow-up geophysics program is planned for early 2025 to aid us in the potential next round of drill targeting. On the next slide here, on slide 10, I'd like to highlight our Koma target. Koma is located approximately 5 kilometers southeast of the processing facility and sits on the northern end of the Miradani Shear.
So in 2024, we also saw our first drill test here, and we got really encouraging results that had the team excited. The drilling has identified a series of gold mineralized shears that sit on the northeastern extent of the Miradani Shear, as I said, and it's robust and shows good continuity across a footprint that is currently approximately 200 meters wide and 400 meters long. So mineralization here is beginning at shallow depths and drill holes, but we can also see it extending to surface. So the system remains open to the northeast, and this will be a focus of our early drilling this year. Now, on the slide, you can see some of our best intercepts at Koma.
I won't go through them all, but some of the highlights here you can see there are multiple drill holes with high grade that's very encouraging, but also good widths, as seen as hole eight, where we saw 16 meters at almost four grams a ton and another 18 meters at about a gram a ton. This is obviously very encouraging from a first-pass perspective. We also have several other regional targets that have been prioritized for initial drill testing in 2025. We'll be focusing on the area directly along the fertile Nkran and the Tano Shear Zone to the southwest of the processing plant.
Now, we're lucky to have a healthy budget of approximately $10 million again in 2025, and we're excited to continue to advance our portfolio of exploration targets towards discovery as it remains healthy, full, and I say the team on site is extremely excited to get going. All right, back over to you, Matt.
Thank you, Chris. Here on slide 11, it is important to reiterate that our strong cash balance, which is shown here, will allow us to move forward and support our mine plan. Throughout 2024, following significant investments into the Abore startup and the $13 million payment to buy out the Red Kite offtake agreement, we ended the year with an enviable cash position of $105 million and no debt. We are pleased that this cash allows us to invest in our operations and ramp up to over 200,000 ounces of gold annually from 2026. This brings us to our last slide, looking at how we are building our future. Drilling efforts through 2023 and 2024 replaced our depletion, and we remain confident in both our near mine and greenfield exploration programs going forward.
Our production growth is ramping up, and we expect to see a 75% increase in gold ounces produced by 2026 to over 200,000 ounces of gold per year. We have defined a path forward, and our investment in Nkran is about to kick off mid-year. Gold prices are now running at over $2,700 per ounce, and we continue to maintain a strong balance sheet with no debt, and dare I say, one of the strongest balance sheets within our peer group. We are executing on our organic growth profile, positioning us to become one of the largest single mine producers operating a cash-generating asset in Ghana, West Africa. Galiano's value proposition remains compelling, and we are confident in our vision for long-term value creation and growth as a company. With that, I'd like to turn it back to the operator and open it up for any questions. Thank you.
Thank you. And ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press star followed by the number one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, you may press star followed by the number two. Once again, please press star one to ask a question. And our first question comes from the line of Heiko Ihle with H.C. Wainwright. Please go ahead.
Hey, everyone. Thanks so much for taking my questions.
Hi, Heiko. Good morning.
Hey, with your 2025 guidance of 130,000-150,000 ounces, can you maybe quantify some factors besides the origin of ore that you see yourself coming in either at the higher or the lower end of this range? And more importantly, can you answer the same question for 2026, where even the lower end of the range is obviously well above the high end of 2025? I guess what I'm saying is, are there any bottlenecks besides mining grades at site?
Yeah, Heiko, I think the main bottleneck that we've been quite open speaking about is the crusher throughput, which obviously affects our mill throughput, which has hindered us both in 2024 and will continue to do so for half the year into 2025. So that will be addressed through the commissioning of the secondary crusher, and we expect that to happen mid-year in 2025. As Michael mentioned, we are looking at trying to blend some softer material out of the Esaase prior to that crusher being commissioned in the first half of 2025, which may help with our throughputs. And then subsequently from that, once we have that secondary crusher online, we expect to be producing or milling around the 5.8 million ton per annum mark, which is going to weigh production to the tail end of 2025. That will continue into 2026 with regards to the throughput.
And then we do also expect to see the grades slightly increase both at Abore and at Esaase as we mine into the guts of the deposit, so to speak, with deeper areas of the deposits, both in the latter part of 2025 and 2026.
John.
And then just a quick clarification. Sustaining capital expenditures for 2025 obviously are including the tailings facility expansion. So that's $9 million right there, another $9 million in 2026. That's it, right? There is nothing left in calendar 2027. And then just remind me, how many years of capacity does this add, please?
Yeah, so in terms of your first question, the TSF, you're correct. That spans the two years, so 2025 and 2026. It doesn't continue into 2028. And if you could just repeat the last part of the question, I didn't catch that.
How many years of capacity does that add, the facility expansion?
Just shy of an additional four years of capacity.
Four years. Okay. So we got to worry about this again then in fall of 2030?
2030, 2031, approximately, taking into consideration the current capacity that we have from stage seven.
Got it. And then sorry to hog up the question to you like that. And then presumably, it should be a more or less similar number to this, maybe inflation-adjusted in 2030, 2031?
Yeah, I think, listen, it's a long way out, isn't it, Heiko? 2030, 2031. I mean, ultimately, it'll probably be a similar scale. And obviously, that would be dependent also on exploration success, etc., between now and then. So it's probably too early to guide to a 2030 subsequent lift at this stage.
Very fair. I'll get back in queue. Thank you all.
Thanks, Heiko. Appreciate it.
Your next question comes from the line of Alfredo Semeraro with Equinox Partners. Please go ahead.
Okay. Hi, Matt. Thank you for taking my question.
Alfredo.
So very quick one. Just to confirm that the AISC that you provided, that excludes 100% of the development CapEx, right?
Correct. I'm trying to say Matt Freeman here. Yes, that's correct.
Okay. And then so the development CapEx between 2025 and 2029, that amounts to, if I take the midpoint, around $400 million. Can you maybe break down that development CapEx? I'm very interested about how much corresponds to Nkran's streaming cost.
Hi, Alfredo. I think the best thing to do is kind of refer to previous tech report in terms of the disclosures that we have. And you'll see in the reserve statement, you can see the mining rates, the strip ratios, and the cost of mining associated with Nkran, and that should give you a good guide.
Okay. Yeah, yeah. Yeah, the reason I ask is because, yeah, if I see the technical report, I mean, for Nkran, the total CapEx, let's say, was around $260 million, and obviously, the guidance you're providing now is very much in line in terms of mining cost per ton as well as strip ratio. So basically, there is a difference of, let's say, $140 million in development CapEx that I don't know where exactly it comes from. I don't know if that makes sense, what I'm saying.
I can help you there as well. So one of the other things, the technical report shows some development capital in 2023 and 2024 that wasn't incurred for some of the site establishment costs. So you can see that what was incurred for our disclosures through those few years. So it's just a timing difference that some of those costs were now getting incurred during that period. We had about $53 million of development costs in 2023 and 2024, and the lion's share of those were not incurred. So those will be a timing difference into this period. A smaller component that we have talked about, I think, over the last year or so was the secondary crusher and the CIL tanks. Now, those costs were in addition to the tech report that we have.
So there's some incremental spend, as Matt's talked about, with the secondary crusher this year and finishing up those other plant upgrades. So there's another sort of in the quantum of sort of that sort of sub-$10 million number. So it's not as material, but there's an element of that as well.
Perfect. But streaming cost is more or less in line with the technical report, the stripping cost. I mean, the stripping cost.
I think you can see with Nkran stripping costs, we've got the strip ratio is the same, but the number of ore tons we're accessing is greater. So there is more mining tons at the mining rates that are in the footnote disclosure. So you can work out there where the Nkran stripping is trending.
Okay. Perfect. And then very quickly, the NOLs balance, do you have the number or maybe even better, if you kind of can give an idea of when should you start paying corporate taxes at, let's say, current spot prices?
So from a high level, we are expecting to become taxable in the very near future, whether that's 2025 or 2026, we would expect. In terms of NOLs, I'm still in a bit of a year-end kind of position. We're pulling the numbers together for our year-end taxes. So we're going to be putting our year-end numbers out in the middle of March. So that disclosure should be in our financials, and you'll be able to look out for it then. So I apologize if you've got to wait a few weeks for that, but it'll be coming up then.
Okay. So I guess for intercompany loan, that's the same answer. I mean, when do you expect that to be 100% repaid?
Same.
Okay. Clarified there. Okay. Thank you. That's all. Thank you very much.
Thanks, Alfredo.
And your next question comes from the line of Jonathan Guy with H&P. Please go ahead.
Hi, guys. I realize you've just put out the five-year plan, so this is probably a tedious question to ask. But based on the work you've done, what are you thinking about the longer term and production into the sort of 2030s? I mean, obviously, you've had some decent exploration, and that's pointing to a longer mine life. What are you thinking about that at this point?
Yeah, obviously quite bullish on exploration, as you would have heard from Chris's presentation today. And I'll point out that this depletion was replaced quite easily over the last two years as well in terms of what was mined. So certainly looking to extend the mine life between now and when the five-year period that we're showing here expires. And just to give you some guidance post that period, you can see that there's still a significant amount of reserve remaining on our table. And what we've tried to do here, Jonathan, is really clarify to the market what the ramp-up looks like to steady state, which is achieved over the next five-year period.
And so, you can take those reserves remaining on the reserve table and average them out once we've hit that steady state over the next few years, and you can work out what we're expecting post this five-year period as well with the current reserves, obviously, pending any updates and expansion of reserves through exploration.
Okay. Thank you.
And once again, if you would like to ask a question, simply press star followed by the number one on your telephone keypad. And our next question comes from the line of Bereket Berhe with Beacon Securities. Please go ahead.
Hey, Matt. If I could follow on Jonathan's question, and I'm guessing the guys have already asked similar questions. So far, your five-year mine plan is basically assuming that you'll be producing somewhere between 940 and 1,080 kilo ounces. That is out of the 2 million ounces that you have, sorry, 900,000 to about 1.1 million ounces to be produced in the next five years out of the 2 million that you have in the reserve. But your resource globally is also about 4.5 million. And past 2029, right now, the mine plan remains opaque. I also appreciate that a lot of these ounces are in different sort of pits. But if you were to arm wave, what do you think your conversion rate will be going forward from resource to reserves? And what sort of life of mine do you envision as Asanko having going forward?
Yeah, that's a good question. Obviously, the current gold price environment certainly helps with regards to conversion of resources to reserves as well and provides some additional opportunity within all of our deposits at the moment. That's for the existing resources that we're aware of and we're quoting at the moment, and the other one, you could have a look at how we managed our conversion between resources and reserves from 2022 through till now, and then you can see that there's probably a pretty good conversion rate in that period of time, so you can apply probably a similar logic to what we currently have in resources, but I think the most important thing is all of these deposits that we're quoting in our resource table are ones that are quite mature and require a fair bit of strip to expand.
Where we're really looking to focus on at the moment with Chris is trying to find that next near-surface, lower strip ratio, close to the mill deposit. And Koma is one of those ones that fits that criteria. So I don't have a specific number for you, but obviously, there's expectations that resources and reserves will continue to grow on what is a very prospective land package.
So no specific number, but you expect to maintain the level of conversion rate that you already have demonstrated. Did I get your answer correct?
Correct. That's a good summary. Very good. Yes.
Perfect. That's all I got in terms of questions. All the guys have answered it. In terms of detail, do you think that you'll be able to provide a bit more granularity to the five-year outlook that you provided? And I'm trying to be a bit specific here. Would you be able to give us recovery numbers that are assumed and grades?
Within the five-year plan?
Yeah. Or is that asking too much right now?
I don't have the numbers directly in front of me in terms of recovery and grade for that period on an average, but we can certainly jump on a call and have a chat about that, Bereket.
Perfect. Thanks a lot, and thanks for providing this level of clarity as well for now.
You're welcome. Thanks for your question. Thanks, Bereket.
Your next question comes from the line of Frederick Bolton with BMO Capital Markets. Please go ahead.
Hi. Thanks for taking my call. So to sum up on the previous questions, in the last technical report, in the next five years, Miradani, Dynamite, Abore and Adubiaso—to say my pronunciation—but especially mined in the next five years, but it seems that these have been taken out of the mine plan. Is it my understanding that these have been deferred to later on after the next five years?
That's correct, Frederick. Yeah. As Mick said, we focus on the larger deposits for simplicity of mining and to focus a mining contractor on less area and less deposits to be mined at the same time. So those deposits, those smaller ones, will be tail-end loaded post the five-year period. That's correct.
Okay. Great. And just moving into exploration, so Miradani seems to be quite some distance away from the processing plant, although it still represents about 15% of the total reserve inventory. Can I make the assumption that the distance away from the processing plant is a factor in your mine planning discussions?
It's not the primary driver, Frederick. I mean, we're currently mining Esaase, or we will be mining Esaase in this plan, which is further away from the processing facility than Miradani is. Esaase is a 28-kilometer haul, and Miradani is in the range of 10-15 kilometers as such. So it's not the driving factor distance. Again, it's just overall simplicity of making sure that the contractor is embedded into a large deposit and has the ability to deliver the tons and grades that we have confidence they can over the next period. So I wouldn't say it's the driving factor at all.
Okay. Great. Thank you. That's all the questions I had. Thanks for your time.
Thank you, Frederick. Appreciate it.
Thank you. I'm showing no further questions at this time. I would like to turn it back to our President and CEO, Mr. Matt Badylak, for closing remarks.
Okay. Thank you, operator. And listen, just want to thank everyone for dialing in and participating on the call today. We really appreciate your questions and your interest in the story. And I'd like to wish you all a good day, and we'll speak later. Thank you.