Unhedged gold producer and explorer Galane Gold completed the sale of its Mupane property, in Botswana, during the second quarter, removing $17.3-million of liabilities from its balance sheet, the company notes in an update for the three and six months ended June 30.

During the quarter, Galane also released its preliminary economic assessment on the Summit mine and Banner mill in New Mexico, demonstrating a robust financial model and a short-term path to production.

For the second quarter, the Galaxy operation, in Mpumalanga, South Africa, produced 2 179 t of concentrate containing 2 346 oz of gold. Earnings from operations were $500 000.

Positive cash flows from operating activities were $300 000 for the second quarter.

The company sold 1 760 payable ounces of gold in the second quarter at an operating cash cost before royalties of $1 416 /oz.

Post quarter-end, Galane entered a new offtake agreement for its Galaxy operation, providing a higher payable percentage for gold content in its concentrate and an unsecured $3-million revolving finance facility.

YEAR TO DATE

Galaxy produced 4 465 t of concentrate containing 5 489 oz of gold.

Earnings from operations were $2.3-million.

The company sold 4 117 payable ounces of gold at an operating cash cost before royalties of $1 216 /oz.

Positive cash flows from operating activities were $1.3-million.

Galane repaid $1.2-million of debt.

“[The second quarter] commenced with disruption to the company’s revenue cycle caused by the severe flooding in Durban, despite the Galaxy operation having continued to generate positive operating cash flow during the quarter.

“Post quarter-end, shipments of the flood-affected gold concentrate have recommenced from Durban and it is expected that all the flood-affected gold concentrate will be fully paid during quarter four 2022,” CEO Nick Brodie outlines.

“The sale of Mupane has recharged our balance sheet with the removal of over $17-million in liabilities and, as a result at the end of quarter two 2022, the company had net debt of less than $1-million.

“Consequently, post quarter-end, the company was able to finalise a new revolving finance facility for Galaxy to enable continued investment to support the ramp-up of production,” he comments.