TORONTO, ONTARIO -- (Marketwired) -- 05/14/13 -- Galane Gold Ltd. ("Galane Gold" or the "Company") (TSX VENTURE: GG) is pleased to announce the release of its financial results for the first quarter ended March 31, 2013. All amounts are in United States dollars unless otherwise indicated.
A copy of the unaudited condensed consolidated interim financial statements for the three months ended March 31, 2013 prepared in accordance with International Financial Reporting Standards and the corresponding Management's Discussion and Analysis will be available under the Company's profile on www.sedar.com.
First Quarter Highlights and Subsequent Events
-- Produced 7,430 ounces of gold and sold 7,466 ounces of gold plus incidental silver at an average combined selling price of $1,630 per ounce.-- Total ore mined of 131,702 tonnes and total ore milled of 213,126 tonnes at an average head grade of 1.36 grams per tonne.-- Recovery rate at the processing plant of 79.7%.-- Net loss after tax of $4,186,104.-- Total operating cash cost of $1,643 per ounce (excluding royalties)(1)-- In the quarter, 84,435 tonnes of ore were mined at Tholo with an average grade of 2.30 grams per tonne. As anticipated the grade has continued to improve with depth and has increased from 1.36 grams per tonne in Q1 2012.-- Due to the poor availability of the Company's own mining fleet the total tonnes mined at the Tholo pit were lower than planned. As a result, the Company decided to outsource all mining at Tholo and this process was completed in March 2013.-- In the quarter, 47,267 tonnes of ore were mined at Golden Eagle with an average grade of 1.58 grams per tonne.-- Processing and gold production in Q1 2013 was, as anticipated, adversely affected by the following issues: -- The head grade of 1.36 grams per tonne was lower than the average mined grade of 2.04 grams per tonne as ore stockpiles were used to supplement feed to the plant. -- Recovery increased from the previous quarter to 79.7% but was still affected by the low grade and the processing of predominantly sulphide ore.-- A mineral resource update in respect of the Company's Mupane Property was released in March 2013. As at December 31, 2012, the measured and indicated mineral resource was 508,400 ounces of gold and a total inferred mineral resource of 261,100 ounces of gold.
Total production for the quarter at Golden Eagle was affected by mining contractor availability. The mining contractor who was undertaking mining operations on our behalf was terminated in December for poor performance. This impacted negatively on production and mining stopped in the latter part of December and continued again in late January. The Company completed a tender process in Q1 2013 to install a new contractor for the remaining two year mine life of the Golden Eagle open cast pit. The Company has relied on various smaller providers to assist its mining operations in February and March whilst the replacement contractor was mobilised.
Processing and gold production in the quarter was also adversely affected by the less than anticipated ore milled of 213,126 tonnes. This was due to poor mining performance coupled with lower than expected milling rates. The lower than expected milling rates are a result of the ore processed having a higher grinding index than expected due to the lack of ore from Golden Eagle (which has a lower grinding index than Tholo) and the increased use of ore stockpiles, which also have a high grinding index, to supplement mining. Towards the end of the quarter the issues with mining were resolved and as a result milling rates, grades and recoveries all improved.
Exploration continued as planned with progress at existing exploration sites to further define potential resources, exploration on existing mines to define existing resources at depth and soil sampling at new sites to follow up on previously identified exploration targets.
Galane Gold CEO, Philip Condon commented: "The Company was expecting in the quarter to see a reduction in gold production as we continue to carry out stripping at Golden Eagle and at Tholo. As we have seen at our other open pit mines, for example Signal Hill, we expect to see the fruits of our labour as the stripping is concluded (during the second half of 2013 at Tholo and towards the end of 2014 at Golden Eagle) with expected increases in grade and volumes of ore improving gold production in future quarters.
The Company has faced challenges within the quarter and I have been impressed with how we have reacted to them and implemented solutions that have maintained production. The solutions that we have implemented, for example the outsourcing of mining at Tholo, are also expected to improve productivity and profitability going forward.
In light of the recent movements in gold price the Company has reviewed its operations and revised its plans going forward to ensure it remains cash positive at the current gold price levels."
(1) Total operating cash cost excluding royalties is a non-GAAP measure. Refer to "Supplemental Information to Management's Discussion and Analysis" in the Company's Management's Discussion and Analysis for the three months ended March 31, 2013 for a reconciliation to measures reported in the Company's financial statements.
About Galane Gold
Galane Gold is an un-hedged gold producer and explorer with mining operations and exploration tenements in Botswana. Galane Gold is a public company and its shares are quoted on the TSX Venture Exchange and the BSE under the symbol GG. Galane Gold's management team is comprised of senior mining professionals with extensive experience in managing mining and processing operations and large-scale exploration programmes. Galane Gold is committed to operating at world-class standards and is focused on the safety of its employees, respecting the environment, and contributing to the communities in which it operates.
Certain statements contained in this press release constitute "forward-looking statements". All statements other than statements of historical fact contained in this press release, including, without limitation, those regarding the Company's future financial position and results of operations, strategy, proposed acquisitions, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words "believe", "expect", "aim", "intend", "plan", "continue", "will", "may", "would", "anticipate", "estimate", "forecast", "predict", "project", "seek", "should" or similar expressions or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Company's expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements.
Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to: the Company's dependence on a single mineral project; gold price volatility; risks associated with the conduct of the Company's mining activities in Botswana; regulatory, consent or permitting delays; risks relating to the Company's exploration, development and mining activities being situated in a single country; risks relating to reliance on the Company's management team and outside contractors; risks regarding mineral resources and reserves; the Company's inability to obtain insurance to cover all risks, on a commercially reasonable basis or at all; currency fluctuations; risks regarding the failure to generate sufficient cash flow from operations; risks relating to project financing and equity issuances; mining tax regimes; risks arising from holding derivative instruments; the Company's need to replace reserves depleted by production; risks and unknowns inherent in all mining projects, including the inaccuracy of reserves and resources, metallurgical recoveries and capital and operating costs of such projects; contests over title to properties, particularly title to undeveloped properties; laws and regulations governing the environment, health and safety; operating or technical difficulties in connection with mining or development activities; lack of infrastructure; employee relations, labour unrest or unavailability; health risks in Africa; the Company's interactions with surrounding communities and artisanal miners; the Company's ability to successfully integrate acquired assets; the speculative nature of exploration and development, including the risks of diminishing quantities or grades of reserves; development of the Company's exploration properties into commercially viable mines; stock market volatility; conflicts of interest among certain directors and officers; lack of liquidity for shareholders of the Company; and litigation risk. Management provides forward-looking statements because it believes they provide useful information to investors when considering their investment objectives and cautions investors not to place undue reliance on forward-looking information. Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forward-looking statements are made as of the date of this press release and the Company assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by law.
Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no guarantee that any of the mineral resources disclosed in the press release will be converted to mineral reserves. There is also no guarantee that any of the inferred mineral resources will be upgraded to measured or indicated mineral resources. Information of a technical and scientific nature that forms the basis of the disclosure in this press release has been approved by Charles Byron Pr. Sci. Nat., MAusIMM., MGSSA and Chief Geologist for Galane Gold, and a "qualified person" as defined by National Instrument 43-101. Details regarding the Company's mineral resource update are disclosed in the press release dated March 18, 2013 entitled "Galane Gold Ltd. Announces a Mineral Resource Update For its Botswana Properties".
Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Galane Gold Ltd.