Galiano Gold Emerges As A Mid-Tier Producer, Buys Majority Stake In Asanko Mine

Galiano Gold GAU is set to own 90% of one of the largest gold mines in West Africa.

What Happened: The company committed to acquiring a 45% stake in the Asanko gold mine for $170 (C$225) million. The Government of Ghana holds the remaining 10% stake.

On the sell side is Galiano’s joint venture partner, Gold Fields GFI.

Most of the deal will be a cash transaction, paid in installments due Dec. 31, 2026, with the last $30 million paid after the production of 100,000 oz of gold from the mine's Nkaran deposit.

Galiano will issue $20 million worth of shares to Gold Fields, making it a 19.9% company shareholder.

The acquisition came after Galiano published an update on exploration activities highlighting the Asanko mine's potential.

The focus included resource and reserve upgrade drilling at Nkran, resource conversion drilling at Abore and Midras South, and exploration at the Gyagyatreso regional prospect.

Galiano is gearing up for continued exploration in 2024. The company aims to achieve an annual gold production of around 240,000 ounces by 2030.

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Why It Matters: This transaction turns Galiano into an emerging mid-tier gold producer with substantial growth potential.

The deal’s structure is expected to boost gold production, cash flow, mineral reserves and resources.

Galiano Gold President and CEO Matt Badylak emphasized the deal’s value: “The transaction structure results in a strongly accretive acquisition and galvanizes a significant rerate opportunity for our shareholders," he said.

The Asanko Gold Mine has been Galiano's flagship asset since 2016. Asanko is a multi-deposit complex with approximately 2,200 employees. It includes:

• Four main open-pit mining areas
• A 5.8Mtpa carbon-in-leach processing plant
• A total of 170,342 ounces produced in 2022
• An expected production of 120,000 to 130,000 ounces in 2023
• Sustained cost guidance between $1,500 and $1,600/oz.

The latest Galiano earnings report showed: 35,522 ounces sold at an average price of $1,902/oz, generating a net income of $21.3 million. The company ended third quarter (Q3) 2023 with $56.1 million in cash while remaining debt-free.

Expanding the Asanko operation will strengthen Ghana's position as a leading African gold mining nation. In 2022, Ghana contributed 3% to the global gold production, with a total output of 3.74 million ounces. Also read: Oil Prices Fall After Angola Says It Will Quit OPEC.

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