Hello, and welcome to the Galiano Gold third quarter 2026 results conference call. At this time, all participants are in listen-only mode. Following the prepared remarks, we will open the call for questions. I will now turn the conference over to Matt Badylak, Galiano's President and Chief Executive Officer.
Thank you, operator, and good morning, everyone. We appreciate you taking time to join us on the call today to review Galiano Gold's third quarter 2026 financial and operating results, which we released yesterday after market close. During today's call, we will be making forward-looking statements and referring to non-IFRS performance measures. Please refer to the cautionary notes on slide two of the webcast presentation and to the risk disclosures in our most recent MD&A. Yesterday's news release should be read together with our third quarter financial statements and MD&A, which are available on our website and filed on SEDAR+ and EDGAR. Unless otherwise noted, all dollar amounts discussed on this call are in USD. Joining me today are Michael Cardinaels, our Chief Operating Officer, Matt Freeman, our Chief Financial Officer, and Chris Pettman, our Vice President, Exploration. I will begin with an overview of the quarter.
Michael will discuss mining and processing, Matt will review financial performance and costs, and Chris will update you on exploration. I will then return to discuss near-term priorities and outlook before we open the call for questions. Turning to slide four, Q3 demonstrated clear progress across the business. Production increased, cost performance improved, and operating cash flow strengthened. Most importantly, we achieved this performance with no recordable injuries. I want to recognize and thank our team and business partners for their discipline and commitment during that quarter. These results show that we are executing the plan and leave us well-positioned to deliver our full-year guidance. Our balance sheet remains healthy with no debt, providing the capacity to continue investing in the Asanko Gold Mine. We also continue advancing our long-term priorities. Subsequent to the quarter, we secured extensions to the Abirem and Miradani mining leases.
This important milestone provides greater operating certainty and supports the execution of our current life-of-mine plan. We appreciate the support of the Government of Ghana and the positive engagement of the Minerals Commission and the Ministry of Lands and Natural Resources throughout this process. During the quarter, we also advanced key initiatives at Nkran Cut 3, Esaase, and Abore. The key message from Q3 is that the operating performance is strengthening while our longer-term initiatives continue to advance. We enter the final quarter with confidence in our ability to deliver our 2026 plan. With that, I will turn the call over to Michael to review operating performance.
Thank you, Matt, and good morning, everyone. Q3 marked a step forward operationally. As Matt noted, we delivered these results while maintaining our strong safety record. At September 30, our team had worked approximately 13.4 million hours without a lost time injury and achieved 548 consecutive injury-free days. Following another safe production quarter, both our lost time injury frequency rate and total recordable injury frequency rate now stand at zero, which is an achievement worth celebrating. Here on slide five, mining activity advanced in line with our 2026 plan. We mined 1.7 million tons of ore at an average grade of one gram per ton, with a strip ratio of 4.4: 1. Abore remained our primary ore source, accounting for roughly 82% of the Q3 total mined ore, contributing 1.4 million tons at an average grade of 1.1 grams per ton.
Grades rose 9% from Q2 as mining moved into deeper elevations consistent with our mine plan. Esaase supplemented this supply with 0.3 million tons at an average grade of 0.8 grams per ton. Development at Nkran Cut 3 also accelerated. Additional equipment mobilized in Q3 helped lift development waste movement by a further 40% to 8.5 million tons. We invested $24.6 million in pre-stripping, bringing the year-to-date total to $60.2 million. We expect mining rates to remain steady in Q4 as the program progresses according to schedule. Turning to slide six, stronger plant performance was a key driver of production growth. Availability reached 93%, enabling us to mill 1.4 million tons, 11% more than in Q2. Mill feed grade rose 11% to an average of one gram per ton, reflecting the planned benefit of higher Abore grades in the second half of the year.
Recovery held steady at 90%, and the combination of greater throughput, higher feed grade, and stable recovery resulted in production of 40,922 ounces, up 19% from Q2. With just over 110,000 ounces produced through the first nine months of the year, we enter Q4 with solid operating momentum from an improved Q3 and remain confident in achieving our full-year production guidance. Our focus is to sustain safe, reliable execution across the mine and the processing plant, and close out the year strongly. I will now hand the call over to Matt Freeman to review financial results.
Thanks, Michael. Good morning, everyone. Turning to slide seven, stronger production and gold sales in the third quarter translated into a meaningful improvement in our financial performance and cash generation. Revenue for the quarter was $172 million on sales of just over 40,000 ounces of gold, an average realized price of $4,247 per ounce before the impact of hedges. This translated into strong financial results with adjusted EBITDA of $93.3 million, basic EPS of $0.15, and adjusted EPS of $0.09. The business also generated $57 million of operating cash flow during the quarter, compared with $40 million in Q3 of 2025. The increase is driven by high gold prices and more ounces sold, partly offset by higher royalties and the income taxes we have to pay. The most significant change from a year ago was net income.
We reported net income attributable to our shareholders of $40 million compared to the net loss last year of $39 million, representing a positive swing of $79 million. The improvement was mainly driven by higher revenues, again reflecting more ounces sold and the higher gold prices, offset, as I mentioned before, by royalties. Also, as we have discussed previously, we are now very close to the end of our hedge program. We settled 22,500 ounces during the quarter, leaving only 15,000 ounces to be settled in Q4. Once those remaining ounces are delivered, the hedge program will be complete, enabling our financial results to fully participate in the gold price beginning in 2027. Our financial position at September 30th remains very strong with $87 million of cash, with the $75 million revolving credit facility remaining undrawn.
The key point is that our balance sheet remains very healthy, maintaining substantial liquidity to fund Nkran Cut 3, our exploration programs, and other growth priorities. Turning to slide eight, we are also pleased to see all-in sustaining costs improve to $2,346 per ounce for the quarter, a 5% improvement from Q2. The primary driver of this improvement was the higher gold ounces sold, partly offset by increasing sustaining capital related to the expansion of the tailings storage facility. Year-to-date, AISC was $2,391 per ounce, within the bottom half of our annual guidance range, such that our 2026 AISC guidance remains unchanged at between $2,300 and $2,600 per ounce. This disciplined approach to cost management allows us to continue directing capital towards value-enhancing projects, including Nkran Cut 3 and our exploration programs at Esaase and Abore, which will support future production and the potential for mine life extension.
With that, I will now turn the call over to Chris to discuss the exploration progress.
Thanks, Matt. Turning to slide nine, our exploration work through Q3 remained focused on advancing Mineral Reserve conversion at Esaase and underground resource growth at Abore, with both programs supporting our planned Mineral Resource and Mineral Reserve update in the first quarter of 2027. At Esaase, we achieved an important milestone by completing the expanded infill drilling program during the quarter. We drilled 16,732 meters in Q3, bringing the total program to 32,982 meters completed. The program was designed to convert existing open-pit Mineral Resources from the inferred to the indicated category, and has the potential to significantly increase the Esaase Mineral Reserve and support planning for a potential future open-pit expansion. Data review and modeling are now underway. At Abore, drilling resumed in late Q3 after the program was paused to prioritize the completion of the Esaase campaign.
We drilled 4,445 meters during the quarter, bringing year-to-date drilling to approximately 20,600 meters of the planned 32,000-meter program. This work is designed to expand the underground Mineral Reserve through step-out drilling outside of the existing resource. We expect to complete this work and the remainder of the program in Q4. We also achieved a significant milestone by receiving all regulatory approvals required for construction of the planned Abore exploration adit. This is an exciting moment for us, as the adit will provide a more efficient platform for underground drilling and support further evaluation of Abore's longer-term underground potential. This is the culmination of three years of successful surface exploration programs at Abore, and marks what may be a defining moment for the Asanko Gold Mine and the deposits of the Asankrangwa Belt.
I'd like to personally thank and congratulate all of the members of the Asanko Gold Mine site exploration team for their hard work and technical excellence that has brought us to this point. Back to you, Matt, to discuss our priorities and outlook.
Thank you, Chris. Before we turn to questions, let me leave you with one clear takeaway. Q3 showed us that this team can deliver. We strengthened our operational and financial performance, advanced our long-term plan, and maintained a strong safety record. Through the first nine months, we've positioned the business to finish the year safely and deliver our full-year production and cost guidance. That is our immediate priority. Beyond the year-end, the opportunity is equally clear. The completion of the hedge book, together with higher production, should drive strong operating cash flow in 2027. We will remain disciplined in allocating capital, continuing to invest in the business and advancing growth opportunities that can create long-term value for shareholders. We have the team, the assets, and the financial strength to deliver our plan, and we remain confident in our path ahead. Operator, we are now ready to take questions.
Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Your first question today comes from the line of Jeremy Hoy from Canaccord Genuity. Your line is open.
Hi, Matt and team. Thanks for taking my question. My first question is on 2027. Any color you guys can provide on the various cost components heading into the new year might be helpful as we look at our estimates for the following year.
Yeah. Good morning, Jeremy. Thanks for your question. Yeah, we're working through all of those numbers at the moment internally, and we will be looking to provide the market with clarity on what 2027 looks like in normal cadence early in 2027. So, I'd just request some patience on that at the moment as the team works through that. But obviously, we have previously suggested that we are expecting slightly higher production in 2027 on the back of high grades, et cetera. And we're looking forward to, as we said, those Mineral Reserves and resource updates that the team's working through at the moment, which will help drive those numbers and solidify those numbers in due course.
Okay. And with costs and upward pressure on fuel prices being topical through the sector, could you remind us the hedging strategy for fuel and other inputs?
Hi, Jeremy. It's Matt Freeman here. Yeah, we're looking at those things. And obviously, at the moment, with diesel price being elevated because of the conflict in the Middle East, we're being careful on that. But we keep an eye on it quarter by quarter, and we'll react if we need to, if we feel the need. At the moment, I mean, although there's an increase in diesel price, we still feel comfortable with our cost structure. And as we said, we're coming at the lower end of our cost guidance range for the year. So, we're comfortable with where we are at the moment.
Okay, great. Much appreciated. Last one from me is, I guess, on the underground opportunity. Great to see you get the approvals for the adit, and it will be good to see drills get in there and attack that ground from a better vantage point. Could you run us through any updated thinking on timing of how that underground opportunity progresses? It is exciting because it is upside potential to what we are modeling on an open-pit basis only. Anything that you could provide would be very helpful. Thank you.
Yeah, Jeremy, that is a good question. I would like to just highlight Chris and the team's work on advancing that expeditiously in the last quarter. We have advanced quite healthily through the tender process during the quarter, and we are looking to finalize that process, which would include selection of a mining contractor within the quarter. That will then allow that selected contractor to get going with equipment mobilization, et cetera, and start to look to break ground as soon as possible. I think we have previously discussed that we are looking to try and do that by Q1 or late Q1, early Q2 next year in terms of the groundbreaking. That will obviously depend on the contractor selection, et cetera, which that process is currently underway.
The adit itself is, we are looking at about a 2 km adit as well, and drilling will obviously take place as we progress that adit forward. Chris, I am not sure if you want to add anything to that.
No, I think that is a pretty good overall overview, Matt. I think that in terms of when we can actually get drills underground, I guess the one thing I would add is that we are not going to wait until we get to the bottom to do all the drilling. We will be able to drill some of our areas as we progress the ramp. So, it will not be the full sort of year and a half of construction before we start to see some drill results come out of that.
No, that's great. Thanks. Any idea when you might look at an initial underground study, or is it just too early to say?
Yeah, I mean, I think obviously we're going to have to do a fair bit of drilling from underground and do some conversion. Obviously, we have last year, or sorry, earlier this year, we've updated the market with a maiden underground Mineral Reserve at both Abore and Nkran. There's a bit of drilling, obviously, that needs to be done before we can get going on a comprehensive study. So that's still some time away at this stage. But obviously, we've got the cash, Jeremy, to be able to advance this project as quickly as possible, and that's the intention. Then to define what it is that an underground ultimately looks like as soon as we possibly can.
Okay, understood. Well, thank you very much for the call, and great to see a steady quarter. I'll step back in the queue.
Thank you.
Again, if you would like to ask a question, press star one on your telephone keypad. Your next question comes from the line of Bereket Berhe from Beacon Securities. Your line is open.
Hey, thanks, guys, and congratulations. It looks like we have approached, or we are at the inflection point here, and hopefully this is only the beginning of the good stuff. One quick question from me, maybe two. What would a 2 km adit cost, and what would that entail, and how long will that cost be distributed in, like, basically what I am asking is, how much will it cost and how long will it take to finish building that adit? My second question is, I noticed that you guys mined 1.4 million tons from Abore at 1.1 gram per ton, and that looks like that you can fill the mill with those higher-grade material, and you may not need Esaase unless mining slows down for whatever reason. What would your thinking be around that?
Okay. I will start off with your first question, and then I will pass on to Mick for the second. Yeah, as I mentioned before, Bereket, we are close to finalizing the tender process at the moment, so I do not want to step ahead of that at the moment with regards to giving you guidance on cost. But, just suffice to say that once we do have that process behind us, we will be able to update the market on the costs around that adit, which is not too far away again, and provide you with clarity on that. So again, just requesting a slight amount of patience from your end on that side, but we will provide you with details as soon as we have finalized numbers available to us. Go ahead, Mick.
Hi, Bereket. In terms of the production and the mill feed strategy, as everyone is well aware, the material that we get from Abore is extremely hard. It is harder than the rest of our deposits. So, there is a fine line between throughput and grade that we manage on a daily basis and a shift-by-shift basis. So, the feed blend and strategy will continue around 80%-85% from Abore, based on available material and grade. So, we do throughout the month and the quarter adjust that accordingly based on what grades are available. So, I would imagine that we will continue our same strategy of optimizing throughput and grade to maximize ounce production in Q4 and then into 2027.
If I can add a question, what would the visible grade profile of Abore look from here to, say, Q1 and Q2?
The grades, as we indicated earlier in the year, we did expect the grades to improve in Abore in the back half of 2026, and we are seeing the result of that at the moment. We expect these grades to continue in Q4 and into 2027 as well.
So, just remain where it is right now and not improve any further?
No, there is definitely potential for us to be improving and see improving grades as we still go deeper in Abore yet and into 2027. That is part of what drives our production increase in 2027.
I think maybe if I could just add to that, Bereket. I think the Q4 grades would probably be similar to what we've seen in Q3 now. As I mentioned earlier, the full-year guidance is probably what you're really looking for, and that's going to come out in early February, in Q1 there. So, we'll be able to provide you with that color there for the full year in February.
Perfect. Thank you very much.
Your next question comes from the line of Heiko Ihle from H.C. Wainwright. Your line is open.
Hey, there. Thank you guys for taking my questions up.
No worries, Heiko.
Can you give a bit of color on what you see with labor costs for next year? Maybe even just a bit on headcount and cost per worker, obviously with the Nkran Cut 3?
Hey, Heiko. It's Matt. Matt Freeman here. As Matt said, we're still obviously working through the numbers is a consistent answer here. But what we're seeing in Ghana, there is naturally some pressure on labor costs and stuff as we go through. Nothing probably out of the ordinary, but we're still working through that. We'll see a slight probably increase there. With respect to headcount numbers, I don't think we're expecting to see a particular change at the site. We're fully equipped, fully staffed, and ready to go. The Nkran Cut 3 is, as you know, it's contract mine, so it's all on contract rates and contract volumes. Again, I don't think you should see any surprises there as we move into next year. It's really a volume-based exercise at Nkran Cut 3.
How many people are on the payroll right now at site?
Well, I think, as you know, we have a modest employee base. Then we have a large number of contractors on site. We have two main mining contractors, Rabotec and Rocksure. Rabotec at Esaase and Rocksure at Nkran, who actually make more. There's more of those employees, their employees than our own. We're around 450 of the Asanko employees. Then the rest of the cohort add up to more than a couple of thousand people in total.
Yep. Okay. Just one final one. With Nkran Cut 3, the mining costs obviously decreased. Can you give a bit of color on not even just short-term, but intermediate and longer-term factors that we should use to analyze our estimates for mining costs in the out years?
Yeah, I think the best way to look at that is, the good thing is we're locked into long-term mining contracts here, so we're not expecting any particular change to the cost structure. What you're seeing the benefit with Nkran Cut 3 is we start to increase the volumes. Our fixed management charges obviously come down on a unit basis. The more tons we can move each month, the lower cost per ton effectively comes in. From that perspective, that's why you start to see it drop in Q3. As Mick has alluded to, we're sort of increasing to add a bit more equipment to site. As we accelerate through the Nkran strip, we should see, hopefully, flat or positive trends in those costs.
Obviously, there's some underlying inflation of diesel and other things, but broadly, the contracts are fairly well set for the next number of years. I think you can be very confident modeling consistent run rates, what we've seen.
Perfect. That's helpful. Thank you guys so much. I'll get back in queue.
Thanks, Heiko.
As a final reminder, to ask a question, please press star, then the number one on your telephone keypad. We'll pause for just a moment. As there appears to be no further questions, I will now turn the call back over to Matt Badylak for closing remarks.
Thank you, operator, and thank you again for everyone who's joined today. We look forward to your continued interest and updating you further as we progress through our execution of our plan. Thank you, everyone. Cheers.
This concludes today's conference call. Thank you for your participation. You may now disconnect.