Golconda Gold Ltd. (“Golconda Gold” or the “Company”) (TSX-V: GG;
OTCQB: GGGOF) is pleased to announce the release of its financial
results for the year ended December 31, 2023. All amounts are in
United States dollars unless otherwise indicated.
A copy of the audited consolidated financial
statements for the year ended December 31, 2023 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.sedarplus.ca.
2023 Highlights, explanation and
subsequent events
- For the year
ended December 31, 2023, the Company:
- mined 63,386
tonnes of ore, from its Galaxy and Princeton ore bodies, with an
average grade of 3.30 grammes per tonne (g/t) compared to 91,744
tonnes at 3.22 g/t in the year ended December 31, 2022;
- mining
operations were impacted due to flooding of the Princeton
decline below 17 Level in the early part of 2023. In addition, at
both Galaxy and Princeton mining was constrained by low equipment
availabilities. In the last quarter of 2023, labour disruptions
severely impacted production and all aspects of the
operations;
- preventative
maintenance plans have been reviewed and enhanced and the existing
mining equipment is in the process of being overhauled, aided with
the stream financing received post year-end (see below), which is
also being used to purchase new, additional equipment;
- Galaxy’s labour
structure was overhauled during the first quarter of 2024, with the
mining, processing and maintenance subcontractors labour being
transferred to Galaxy’s own payroll. This is expected to enable
Galaxy to manage its total workforce more effectively and enforce a
standardised set of disciplinary procedures(1);
- produced 5,146
tonnes of concentrate at an average grade of 38.3 g/t containing
6,339 ounces of gold compared to 9,102 tonnes at 34.0 g/t
containing 9,961 ounces of gold in the year ended December 31,
2022;
- the operating
plant has an upgraded capacity of 50,000 tonnes per month but has
been constrained by mining production;
- generated
revenue of $9.4 million from the sale of 6,208 contained ounces
(4,925 payable ounces) of gold at an operating cash cost of $1,596
per payable ounce compared to $13.2 million revenue for the year
ended December 31, 2022 at an operating cash cost of $1,353 per
payable ounce(2); and
- subsequent to
the year-end completed and fully funded, a gold stream agreement
for the sale of future gold production with Empress Royalty Holding
Corp. (“Empress”) under which Empress provided $5 million to Galaxy
Gold to facilitate an increase in mining volumes to utilise spare
capacity in Galaxy’s new, larger milling circuit to increase gold
production.(1)
Golconda Gold CEO, Nick Brodie commented: “We
are very excited about unlocking the full potential of Galaxy
utilising the recent Empress financing to procure new mining
equipment (we have recently taken delivery of a new drill rig and
loader, with a new dump truck and various items of ancillary
equipment scheduled for delivery by the end of May 2024), refurbish
existing equipment and provide working capital to accelerate our
underground development to access a second Level at Galaxy(3) which
we expect to unlock the value in the current 1.0 million oz
Measured and Indicated(4) and 1.4 million oz Inferred Resource(5)
and the installed 50,000 tonnes per month processing plant that
only ran at 11% capacity during 2023.
We continue to work on a non-dilutive financing
for the restart of Summit, which aims to provide accretive
production, including a significant silver component, and
geographic diversification allowing us to capitalise on the current
strong gold and silver price environment.”(2)(3)
About Golconda Gold
Golconda Gold is an un-hedged gold producer and
explorer with mining operations and exploration tenements in South
Africa and New Mexico. Golconda Gold is a public company and its
shares are quoted on the TSX Venture Exchange (“TSXV”) under the
symbol “GG” and the OTCQB under the symbol “GGGOF”. Golconda Gold’s
management team is comprised of senior mining professionals with
extensive experience in managing mining and processing operations
and large-scale exploration programmes. It is committed to
operating at world-class standards, focused on the safety of its
employees, respecting the environment, and contributing to the
communities in which it operates.
Notes:
(1) This is forward-looking information and
is based on a number of assumption. See “Cautionary Notes”.
(2) Cash cost is a non-GAAP measure. Refer
to “Supplemental Information to the MD&A” for reconciliation to
measure reported in the Company’s financial statements.
|
FY 2023 |
Operating costs (US$) |
9,016,919 |
|
Adjust for: |
|
Depreciation and depletion |
(790,912 |
) |
Inventory movement |
(115,664 |
) |
Total operating cash cost |
8,110,343 |
|
Royalties |
(43,669 |
) |
Total operating cash cost excluding royalties |
8,066,674 |
|
Gold production (contained ozs) |
6,339 |
|
Gold production (payable ozs) |
5,053 |
|
Total operating cash cost excluding royalties per payable
oz |
1,596 |
|
(3) The deposits at the Galaxy mine are
supported by a technical report entitled “NI 43-101 Technical
Report on the Galaxy Gold Mine, South Africa” which was issued on
July 3, 2020 (the “Galaxy Technical Report”), with an effective
date of June 29, 2020, a copy of which is available under the
Company’s profile on www.sedarplus.ca. The Galaxy Technical Report
was prepared by Minxcon (Pty) Ltd and approved by Mr. Uwe
Engelmann, BSc (Zoo. & Bot.), BSc Hons (Geol.) Pr.Sci.Nat.,
MGSSA, and Mr. Daniel (Daan) van Heerden, B Eng (Min.), MCom (Bus.
Admin.), MMC, Pr.Eng., FSAIMM, AMMSA, both “qualified persons” as
defined by National Instrument 43-101 – Standards of Disclosure for
Mineral Projects (“NI 43-101”), and independent of the Company for
the purposes of NI 43-101. The preliminary economic assessment
(“PEA”) supported by the Galaxy Technical Report is preliminary in
nature as the resources included in the PEA are comprised 54% of
inferred mineral resources. Inferred mineral resources are
considered too speculative geologically to have the economic
considerations applied to them that would enable them to be
categorized as mineral reserves. There is no certainty that the PEA
will be realized.(4) As per the NI 43-101 Technical Report on
the Galaxy Gold Mine, South Africa (referenced above) the measured
resource is 3,208,575 tonnes at 2.97 grams per tonne and the
indicated resource is 7,694,349 tonnes at 2.69 grams per
tonne.(5) As per the NI 43-101 Technical Report on the Galaxy
Gold Mine, South Africa (referenced above) the inferred resource is
16,734,418 tonnes at 2.62 grams per tonne.
Cautionary Notes
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 anticipated improvements in workforce management at
Galaxy, the Company’s plan to accelerate underground development at
Galaxy and the anticipated resulting increase in production, the
Company’s plan to obtain non-dilutive financing for the re-start of
operations at Summit, and 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 two mineral
projects; gold price volatility; risks associated with the conduct
of the Company’s mining activities in South Africa and New Mexico;
regulatory, consent or permitting delays; risks relating to the
Company’s exploration, development and mining activities being
situated in South Africa and New Mexico; 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; risks arising
from the Company’s fair value estimates with respect to the
carrying amount of mineral interests; 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; the
ability of the communities in which the Company operates to manage
and cope with the implications of COVID-19; the economic and
financial implications of COVID-19 to the Company; 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; risks
related to restarting production; 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; risks
related to the market perception of junior gold companies; 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.
Information of a technical and scientific nature
that forms the basis of the disclosure in the press release has
been prepared and approved by Kevin Crossling Pr. Sci. Nat.,
MAusIMM. and former Business Development Manager for Golconda Gold,
and a “qualified person” as defined by NI 43-101. Mr. Crossling has
verified the technical and scientific data disclosed herein and has
conducted appropriate verification on the underlying data.
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.
For further information please
contact:Nick BrodieCEO, Golconda Gold Ltd.+ 44 7905
089878Nick.Brodie@GolcondaGold.comwww.GolcondaGold.com
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