Golconda Gold Ltd. Releases Financial and Operating Results for 2022 – Golconda Gold (OTC:GGGOF)

Golconda Gold Ltd. Releases Financial and Operating Results for 2022 – Golconda Gold (OTC:GGGOF)

TORONTO, May 01, 2023 (GLOBE NEWSWIRE) — Golconda Gold Ltd. (“Golconda Gold” or the “Company”) (TSXV:GG, OTCQB:GGGOF) is pleased to announce the release of its financial results for the year ended December 31, 2022. All amounts are in United States dollars unless otherwise indicated.

A copy of the audited consolidated financial statements for the year ended December 31, 2022 prepared in accordance with International Financial Reporting Standards and the corresponding Management’s Discussion and Analysis (the “MD&A”) will be available under the Company’s profile on www.sedar.com.


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2022 Highlights

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  • For the year ended December 31, 2022, at its Galaxy property (“Galaxy”), the Company:
    • mined 91,744 tonnes of ore, from its Galaxy and Princeton ore bodies, with an average grade of 3.22 grammes per tonne (g/t) compared to 62,086 tonnes at 4.75 g/t in the year ended December 31, 2021;
    • reclaimed 38,197 tonnes of historic tailings with an average grade of 0.80 g/t compared to 54,162 tonnes at 0.85 g/t in the year ended December 31, 2021;
    • produced 9,102 tonnes of concentrate at an average grade of 34.0 g/t containing 9,961 ounces of gold compared to 8,349 tonnes at 31.0 g/t containing 8,319 ounces of gold in the year ended December 31, 2021; and
    • generated revenue of $13.2 million from the sale of 9,770 contained ounces (7,367 payable ounces) of gold at an operating cash cost of $1,353 per payable ounce compared to $9.2 million revenue for the year ended December 31, 2021 at an operating cash cost of $1,677 per payable ounce.(1)
  • In addition, as previously reported, the Company also achieved the following significant milestones during the year ended December 31, 2022:
    • completed the sale of Mupane Gold Mining Proprietary Limited (“Mupane”) to Hawks Mining Company Proprietary Limited;
    • signed and commenced deliveries under a new offtake agreement for the Galaxy operation with Ocean Partners UK Limited and an associated unsecured $3 million revolving finance facility;
    • fully repaid the Barak $5 million secured facility;
    • produced an updated Preliminary Economic Assessment (the “PEA”) of the Summit Mine and Banner Mill in New Mexico(2); and
    • mining of the total footprint of the Galaxy Ore Body(3) at 22 level generated 29% more ounces than forecasted.

Golconda Gold CEO, Nick Brodie commented: “2022 was another positive year for Golconda Gold, notably achieving a 20% increase in production at Galaxy and a 19% reduction in cash costs, significantly improving the Company’s balance sheet through the removal of $17 million of liabilities associated with Mupane and the full repayment of the $5 million senior secured loan facility and demonstrating the robust economics of the Summit project through the release of an updated preliminary economic assessment.

We have moved into 2023 with clear goals in mind, specifically to continue to materially increase production at Galaxy and reduce unit costs and progress with funding the restart of the Summit project as soon as possible.”(4)

About Golconda Gold

Golconda Gold is an un-hedged gold producer and explorer with mining operations and exploration tenements in South Africa and New Mexico. Golconda Gold is a public company and its shares are quoted on the TSX Venture Exchange under the symbol “GG” and the OTCQB under the symbol “GGGOF”. Golconda Gold’s management team is comprised of senior mining professionals with extensive experience in managing mining and processing operations and large-scale exploration programmes. Golconda 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.


(1)      Cash cost is a non-GAAP measure. Refer to below and “Supplemental Information to the MD&A” for reconciliation to measure reported in the Company’s financial statements. 

  FY 2022 Q4 2021
Operating costs (US$) 11,506,339   3,286,000  
Adjust for:    
Depreciation and depletion (1,085,629 ) (650,998 )
Inventory movement 48,659   163,994  
Total operating cash cost 10,469,369   2,798,996  
Royalties (272,809 ) (82,360 )
Total operating cash cost excluding royalties 10,196,560   2,716,636  
Gold production (payable ozs) 7,536   1,620  
Total operating cash cost excluding royalties per payable oz 1,353   1,677  

(2)      The PEA is an update of the economic model provided by Waterton Precious Metals Fund II Cayman, the previous owner of Summit, to the Company with an effective date of September 17, 2014, which was included in the “Technical Report, Preliminary Economic Assessment, Summit Gold-Silver Project, Grant and Hidalgo Counties, New Mexico”, prepared by Douglas F. Irving, P.E., Susan C. Bird, P.Eng., and Tracey D. Meintjes, P. Eng. of Chapman, Wood and Griswold, Inc. in Albuquerque, New Mexico. The PEA has been updated by the creation of a new mine plan, updated costings, revised off-take terms and updated metal prices. The updated PEA is preliminary in nature, and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the updated PEA will be realized. Please see the Company’s press release dated June 27, 2022 for further details.
(3)      The deposits at the Galaxy mine are supported by a technical report entitled “NI 43-101 Technical Report on the Galaxy Gold Mine, South Africa” which was issued on July 3, 2020 (the “Galaxy Technical Report”), with an effective date of June 29, 2020, a copy of which is available under the Company’s profile on www.sedar.com. The Galaxy Technical Report was prepared by Minxcon (Pty) Ltd and approved by Mr. Uwe Engelmann, BSc (Zoo. & Bot.), BSc Hons (Geol.) Pr.Sci.Nat., MGSSA, and Mr. Daniel (Daan) van Heerden, B Eng (Min.), MCom (Bus. Admin.), MMC, Pr.Eng., FSAIMM, AMMSA, both “qualified persons” as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”), and independent of the Company for the purposes of NI 43-101. The preliminary economic assessment (“PEA”) supported by the Galaxy Technical Report is preliminary in nature as the resources included in the PEA are comprised 54% of inferred mineral resources. Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA will be realized.
(4)      This is forward-looking information and is based on a number of assumption. See “Cautionary Notes”.

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 goals to materially increase production at Galaxy, to reduce unit costs and progress with funding the restart of the Summit project, and 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 two mineral projects; gold price volatility; risks associated with the conduct of the Company’s mining activities in South Africa and New Mexico; regulatory, consent or permitting delays; risks relating to the Company’s exploration, development and mining activities being situated in South Africa and New Mexico; 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; risks arising from the Company’s fair value estimates with respect to the carrying amount of mineral interests; 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; the ability of the communities in which the Company operates to manage and cope with the implications of COVID-19; the economic and financial implications of COVID-19 to the Company; 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; risks related to restarting production; 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; risks related to the market perception of junior gold companies; 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.

Information of a technical and scientific nature that forms the basis of the disclosure in the press release has been prepared and approved by Kevin Crossling Pr. Sci. Nat., MAusIMM. and former Business Development Manager for Golconda Gold, and a “qualified person” as defined by NI 43-101. Mr. Crossling has verified the technical and scientific data disclosed herein and has conducted appropriate verification on the underlying data.

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.

For further information please contact:
Nick Brodie
CEO, Golconda Gold Ltd.
+ 44 7905 089878
[email protected]

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