Galiano Gold Q2 2025 presentation: production jumps 46%, free cash flow surges 700%

Galiano Gold Inc (NYSE:GAU) reported substantial operational and financial improvements in its Q2 2025 results presentation on August 14, 2025, highlighted by a 46% increase in gold production and a 700% surge in free cash flow compared to the previous quarter.

Quarterly Performance Highlights

The company’s Q2 2025 performance showed significant improvement across key metrics compared to Q1, with gold production reaching 30,350 ounces, up 46% from 20,734 ounces in the previous quarter. Revenue increased 27% to $97.3 million, supported by a 17% higher average realized gold price of $3,317 per ounce.

Galiano also reported strong safety performance with zero lost-time injuries or recordable injuries during the quarter, a notable improvement from Q1 which had recorded two lost-time injuries.

As shown in the following comprehensive performance table:

The company’s cash flow from operations rose 38% to $35.8 million, while free cash flow surged 700% to $5.6 million from $0.7 million in Q1. All-in sustaining costs (AISC) decreased 10% to $2,251 per ounce sold, reflecting improved operational efficiency.

This performance represents a significant turnaround from Q1 2025, when the company reported earnings per share of just $0.01, missing analyst expectations of $0.02, according to the previous earnings report.

Operational Developments

Galiano’s operational improvements were driven by increased mining activity across multiple sites. At Abore, ore mining increased 18% to 0.8 million tonnes at an average grade of 0.9 g/t, while the strip ratio decreased 17% to 6.2:1. At Nkran, waste stripping of Cut 3 saw volumes increase 113% to 1.7 million tonnes as the contractor mobilized more equipment.

The following chart illustrates the quarterly mining volume improvements:

Processing performance also contributed to the improved results, with tonnes treated increasing to 1.2 million tonnes in Q2 from 1.1 million tonnes in Q1. Recovery rates improved to 89% from 87%, helping drive the 46% increase in gold production.

A significant operational milestone was the completion of the secondary crusher project, designed to maintain plant throughput at the design capacity of 5.8 million tonnes per annum when processing harder ore. The company reported that construction was completed on budget with commissioning in late July.

"The secondary crusher installation represents an important step in maintaining our processing capacity as we access different ore types," said Matt Badylak, President and CEO. "This project, completed on budget, will help support our production growth targets."

Exploration Success

Galiano reported promising exploration results from its Abore drilling program, with significant grades and widths identified at depth. The company has expanded its Phase 2 infill drilling program to 8,900 meters to test for extensions of mineralization below the current mineral resource.

The exploration program, backed by a $10 million 2025 budget, has yielded impressive results as shown in the following deep drilling section:

Notably, hole ABDD25-350 intersected 36 meters at 2.5 g/t gold, including 22 meters at 3.75 g/t, while ABPC25-356 returned 16.1 meters at 3.1 g/t gold. These results suggest potential for underground bulk mining operations below the current pit design.

The company’s exploration efforts have confirmed that the granite and mineralizing system continues 200 meters below the current pit shell and remains open in all directions, as illustrated in this cross-section:

"These wide intercepts of host granite demonstrate the upside growth potential at depth at Abore," noted Chris Pettman, Vice President Exploration. "The grades and widths we’re seeing could support a potential underground bulk mining operation."

Financial Position

Galiano maintained a strong financial position with cash and cash equivalents of $114.7 million at the end of Q2, an 8% increase from $106.4 million in Q1. The company remains debt-free, providing financial flexibility for future growth initiatives.

The following chart illustrates the company’s consistent cash balance over recent quarters:

Cost control remained a focus area, with mining costs at Abore and Esaase averaging $3.59 per tonne, in line with plan. Processing costs decreased 10% from Q1 to $12.89 per tonne due to higher throughput. Capital expenditures included $2.2 million in sustaining capex for tailings storage facility expansion, $4.9 million in development capex primarily for the secondary crusher, and $6.9 million for Nkran Cut 3 stripping and site establishment.

This financial performance represents a significant improvement from Q1 2025, when the company reported a net loss of $29 million primarily due to hedge book fair value adjustments, according to the previous earnings report.

Strategic Outlook

Galiano outlined several strategic strengths and opportunities in its presentation, highlighting its robust 5-year outlook with near-term production growth and expected AISC reduction. The company’s aggressive exploration program continues to target resource expansion at Abore and multiple greenfield targets across its 476 km² land package.

The company’s strategic positioning is summarized in the following slide:

Management emphasized Ghana’s status as a premier African mining jurisdiction with mature mining regulations as a competitive advantage. The company also noted that it is currently trading at less than 0.40 times P/NAV, suggesting potential for valuation improvement.

Galiano’s stock closed at $1.58 on August 13, 2025, up 1.28% for the day, according to market data. The stock has traded between $1.00 and $1.85 over the past 52 weeks.

With its improved operational performance, strong cash position, and promising exploration results, Galiano appears well-positioned to continue its growth trajectory through the remainder of 2025 and beyond.

Full presentation:

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