Galiano Gold's Q3 2025: Contradictions Emerge on Mine Production, Costs, Community Relations, and Mill Throughput Capacity

Date of Call: November 7, 2025

Financials Results

• Revenue: $114 million, up 17% quarter-over-quarter from $97 million

Guidance:

• Revised 2025 production guidance: 120,000–125,000 ounces.
• All-in sustaining cost guidance increased to $2,200–$2,300/oz for the year.
• Expect AISC to decrease in Q4 as throughput increases following secondary crusher optimization.
• Target nameplate throughput of 5.8 million tons per annum with secondary crusher fully optimized.
• Encran steady-state ore production targeted in early 2029; accelerated stripping through 2026.
• Mineral reserves/resources update expected early 2026 (likely with full-year results).

Business Commentary:

• Production and Financial Performance:
• Galiano Gold reported production of over 32,000 ounces of gold in Q3, up 7% from Q2, with revenue increased by 17% to $114 million.

• This growth was driven by higher grades, increased throughput, and improved gold prices.

• Operational Changes and Incident Impact:

• The incident at Asasi led to a temporary pause in mining, impacting the production plan for 2025.

• Despite the incident, the company revised its production guidance for the year to between 120,000 and 125,000 ounces.

• Exploration Success and Expansion:

• Exploration at Abora resulted in significant high-grade discoveries, with drill hole intercepts reaching grades of up to 3 grams per ton.

• The company increased its exploration budget, planning an additional 10,000 meters of drilling by year-end, focusing on infill and step-out drilling.

• Cost Management and Cash Position:

• Galiano Gold maintained a strong cash balance of $116 million despite increased capital expenditures.
• Cost management efforts, including optimizing the secondary crushing circuit, are expected to improve processing costs and cash flows.

Sentiment Analysis:

Overall Tone: Positive

• Management: "quarter-over-quarter improvements across key operation metrics... all moving in the right direction." Q3 production increased to 32,533 ounces and revenue rose to $114M; exploration: "exceptional results" at Abora and expanded drilling; balance sheet: $116M cash and no debt.

Q&A:

• Question from Heiko Felix Ihle (HC Wainwright & Co.): Walk us through what you see as the longer-term impacts of the circuit improvements and how we should model the improved recoveries and throughput?
  Response: Secondary crusher and further circuit optimizations should drive sustained higher recoveries and throughput, trending toward the 5.8 Mtpa target and raising production going forward.

• Question from Heiko Felix Ihle (HC Wainwright & Co.): On the potential transition to underground mining at Abora, what would be needed regarding costs, permitting and timing to start underground development?
  Response: First step is to define and quantify an underground resource (view expected early next year); only after that will costs, permitting and timelines be assessed, with delivery of ounces likely one to two+ years out.

• Question from Raj Ray (PI Financial Corp. Markets Group): Clarification — at Abora you’re mining more tonnage at lower grade but producing about the same ounces; is that correct and why?
  Response: Yes — deeper pit access allowed mining full width with less selectivity to keep mill fed, increasing tonnage and dilution but yielding similar ounces.

• Question from Raj Ray (PI Financial Corp. Markets Group): With Asasi paused for ~two months, any impact into early 2026 and what were stockpile tonnage/grade at end-Q3?
  Response: Do not expect the disruption to extend into 2026 as Asasi remobilized; stockpiles were kept small (~<500,000 tons) with grades broadly consistent with mill feed; specifics to be provided after close.

• Question from Raj Ray (PI Financial Corp. Markets Group): Regarding the Ghana (Mincom) audit, what specifically are they asking from companies?
  Response: Audit is industry-wide and scheduled to occur for Galiano in January 2026; no specific requests or pre-documentation provided yet.

• Question from Alfredo Schmützer (Equinox Partners): How have community relations evolved since the Asasi incident?
  Response: Relationships were restored soon after the incident, haulage from Asasi stockpiles resumed, and the situation has remained calm with no current concerns.

• Question from Alfredo Schmützer (Equinox Partners): How should we model reductions in unit processing and mining costs per ton as volumes increase?
  Response: Model processing unit costs declining as fixed processing costs are spread over higher throughput toward 5.8 Mtpa; mining unit-cost reductions are modest since many mining costs are variable, with limited additional benefit from fixed management-cost dilution.

• Question from Alfredo Schmützer (Equinox Partners): You’ve paid $12M in tax installments — what range should we expect for tax this year and the forward effective rate?
  Response: Estimate for the year is roughly $20–$30M of tax (with ~half paid in installments so far); use a 35% Ghana statutory tax rate for forward modeling on current income tax.

• Question from Alfredo Schmützer (Equinox Partners): Why pursue the $75M revolving credit facility now?
  Response: Prudent balance-sheet management to enhance liquidity and provide flexibility for working capital and execution of plans.

• Question from Vitaly Konovalov (Freedom Research): What measures have you taken to prevent further disruptions like the Asasi attack?
  Response: Strengthened community engagement and relationships, plus on-site 24/7 military presence to deter illegal mining and reduce recurrence risk.

• Question from Vitaly Konovalov (Freedom Research): With the secondary crusher installed, what is the nameplate capacity and will you raise full-year throughput guidance above 5.8 Mtpa?
  Response: Nameplate target is 5.8 Mtpa; that remains the target and does not trigger an increase to full-year guidance at this time.

• Question from Vitaly Konovalov (Freedom Research): Should we expect a mineral resource update with year-end results?
  Response: Yes — updated mineral reserves/resources are expected to be provided early 2026, likely alongside full-year financial and operating results.

Contradiction Point 1

Mine Production and Costs

It involves changes in production and cost expectations, which are critical for investor understanding of the company's operational and financial performance.

What were the key factors driving the strong performance in the quarter despite the guidance? How do recent recovery improvements impact long-term performance in the current pricing environment? What are the longer-term implications of these circuit enhancements? How should we model these developments, given the record recoveries over the past four quarters? - Heiko Felix Ihle (HC Wainwright & Co.)

2025Q3: Our secondary crushing circuit has been completed and is now up and running, and in fact, we've been giving it quite a workout over the last month or so. - Michael Cardinaels(COO)

What modifications are needed for downstream equipment due to the secondary crusher commissioning? - Raj Udayan Ray (BMO Capital Markets)

2025Q2: Modifications involve increasing conveyors' speeds, optimizing primary crusher settings, and optimizing vibrating screen settings. These upgrades should boost throughput. Expect completion by the end of Q3. - Michael Cardinaels(COO)

Contradiction Point 2

Community Relations and Operations

It highlights the impact of community relations on operations, which is crucial for the company's ability to maintain productivity and stability in its mining operations.

Can you provide an update on community relations since the incident? - Alfredo Schmützer (Equinox Partners)

2025Q3: We worked hard, Alfredo, to ensure that the community relations across all of our tenements, which are quite large, are maintained. I'm pleased to report that shortly after that incident, the relationships there were brought back into check. - Matt Badylak(CEO)

Do we still expect nonsustaining CapEx of $60 million to $65 million this year? - Raj Udayan Ray (BMO Capital Markets)

2025Q2: The first thing that we need to do is make sure that the communities and the key community leaders that we have good relationships with, that those relationships are maintained. - Matt Badylak(CEO)

Contradiction Point 3

Expectations for Underground Mining

It involves differing expectations and timing for the possible transition to underground mining, which could impact future production costs and strategies.

What is needed to start underground mining, including costs, permits, and time required to develop a decline, given the high-grade ore (3 g/t) and current economic viability? - Heiko Felix Ihle (HC Wainwright & Co.)

2025Q3: We're really, really excited about the grades that we're seeing just below our current reserve pit, right, as highlighted in the slide that you mentioned. I think the first step that we need to tick off, and this is quite imminent for us at the moment too, is to define what the underground resource looks like there at Abora. As I said, I mean, that's not too far away, and there'll be some work internally and also with external consultants that is currently going on. We do expect to have a view on that in early next year, Heiko. That's the first stage. On the back of that resource or the main resource, we'll be able to provide a little bit more color in terms of what we're seeing with regards to cost, timelines, permitting, etc., on that front as well. I will highlight that the upside for underground at the Asanko Gold Mine is not within the next 12 months, right? It’s probably a year or two away. - Matt Badylak(CEO)

Can you outline your mid- to long-term expectations for Abore drilling and compare actual results to expectations? - Heiko Ihle (H.C. Wainwright)

2025Q1: The discovery of the high-grade material below the current known resource model, there is some good exploration work going on, we're going to be looking at stepped-out drilling on the strike, as well as testing the down-dip extensions of the high-grade zones that we have discovered. We are looking for the possibility of future open-pit operations. We are also thinking about the possibility of future underground operations. - Matt Badylak(CEO)

Contradiction Point 4

Mill Throughput Capacity

It involves differing expectations regarding the mill throughput capacity and when it will reach the target of 5.8 million tons per annum.

What is the nameplate capacity with the newly installed secondary crushing unit? Do you expect to increase full year guidance based on the current 5.8 million ton guidance? - Vitaly Konovalov (Freedom Research)

2025Q3: No. I mean listen, we've stated before that the purpose of the installation of that secondary crusher is to get us back up to the 5.8 million tons per annum. We were obviously a little bit shy of that because of the hardness of the ore that we were processing during the course of this year and will continue to process into 2026. That is the target. The nameplate target will be 5.8 million tons per annum. - Matt Badylak(CEO)

Could you elaborate on the timing, implications, and expected timeframe for increasing mill throughput capacity to 5.8 million tons per year? - Jim Lauderback (Graubard)}

2025Q1: We are planning for a throughput rate of the facility to be 5.8 million tons per year. We are confident that we can achieve that throughput rate based on current designs and operating scenarios. - Matt Freeman(CFO)