News & Media

Galane Gold Ltd. Releases Financial and Operating Results for Second Quarter 2013

August 27, 2013

TORONTO, Aug. 27, 2013 /CNW/ - Galane Gold Ltd. ("Galane Gold" or the "Company") (TSX VENTURE:GG) is pleased to announce the release of its financial results for the three and six months ended June 30, 2013. All amounts are in United States dollars unless otherwise indicated.

A copy of the unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2013 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

Second Quarter Highlights


As at June 30, 2013, the carrying value of the net assets of the Company exceeded its market capitalisation and in addition, prior to the close of Q2 2013, the gold price declined significantly. Both were indictors of a potential impairment of the Company's net assets. Therefore the Company recalculated the fair value of its one cash generating unit using an estimated gold price of $1,400 per ounce, a discount rate of 6.25% and a market valuation of its in-situ ounces. The recalculation of the fair value indicated that the Company was required to make an impairment charge of $16,867,329 against the carrying value of the mining and exploration properties.


The mine and processing plan is constantly reviewed in relation to gold price to optimize pit design and plant feed. Given the recent declines and volatility in the gold price, the Company completed an exercise in Q2 2013 to identify optimum plans at different long term gold prices. The Company has determined that the reduction in gold price will require it to utilize the following resources for the remainder of 2013 and 2014:

This mine plan is subject to change according to the prevailing gold price whereby the Company will adopt the appropriate plan for that prevailing gold price environment.

The Company continues to focus on on-going stabilisation and optimisation of the processing operations consistent with the Operational Improvement (OI) program. In Q2 2013 the Company received the results on gravity concentration, flotation and cyanide optimization work on ore samples from Tholo, Golden Eagle and Kwena pits. The results are encouraging and indicate that small changes to the process will assist in increasing recovery in the processing plant.

The Company's exploration program for 2013 is ongoing and the field phase is effectively complete. The program is now moving to focus on identifying new high grade small deposits on the Company's existing mining licenses. In addition work has commenced to produce a collated database of all new and historic exploration data. This will assist the Company in generating new targets and also identifying further work required to report additional resources.

Galane Gold CEO, Philip Condon commented: "The Company managed to improve productivity in the quarter and has put itself in a stronger position for future periods. The new plan that the Company has put in place is expected to see the Company better positioned to generate positive cash flows in the remainder of 2013 and during 2014 at the current gold price levels.

We are also starting to see the benefit of some of the operational improvements we have put in place and we are expecting to see the improvements in the efficiency of the operation resulting in a reduced cost per ounce.

Similar to many other companies in the mining sector we have reviewed our cost base, a process that was proactively started before the decline in gold price, and have initiated projects that will result in long term cost savings for the Company. I therefore remain optimistic about Galane Gold at current gold prices and also about the future benefits we will accrue as the gold price increases."


(1) Total operating cash cost excluding royalties is a non-GAAP measure. Refer to "Supplemental Information to Management's Discussion and Analysis" in the Company's Management's Discussion and Analysis for the three and six months ended June 30, 2013 for a reconciliation to measures reported in the Company's financial statements.

About Galane Gold

Galane Gold is an un-hedged gold producer and explorer with mining operations and exploration tenements in BotswanaGalane Gold is a public company and its shares are quoted on the TSX Venture Exchange and the Botswana Stock Exchange under the symbol GG. Galane Gold's management team is comprised of senior mining professionals with extensive experience in managing mining and processing operations and large-scale exploration programmes. Galane Gold is committed to operating at world-class standards and is focused on the safety of its employees, respecting the environment, and contributing to the communities in which it operates.

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 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 a single mineral project; gold price volatility; risks associated with the conduct of the Company's mining activities in Botswana; regulatory, consent or permitting delays; risks relating to the Company's exploration, development and mining activities being situated in a single country; 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; 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; 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; 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; 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.

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.

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